RE: RED ALERT - Mt. Gox 2.0 Brewing - Bitfinex May Be Issuing Unbacked Tether To Paper Over Banking Service Loss - What We Think We Know (Part 1)
" total amount of tether"
I'm afraid if you don't understand why this point could potentially not be relevant in such an event, you don't understand how market cap is fake and how order books can be cleared.
"This post starts off calling bitcoin "shitcoin", so there's heavy bias off the bat and at the end."
I just calls em like I sees em. If you knew my propensity to devil's advocate, you wouldn't accuse me of "FUD". If Bitcoin is not a shitcoin, why do (almost? not even sure I need the qualifier...) all the other top coins have faster transactions AND lower fees? Why is Bitcoin worth 8x what it was a year ago, despite performing all of its functions more poorly (other than speculation?) Did the whitepaper say "Casino Shitcoin" in it somewhere that I missed?
I was BTC's biggest proponent for most of its life, while it had fast transactions and almost no fees. Now, I can't throw a dart at CoinMarketCap without hitting a crypto that has BOTH faster transactions and lower fees. We're typing across the platform of one right now.
FWIW, I think there are many options better than Bitcoin Cash on fundamentals, but the market is not always huge on fundamentals. Monero is one. If you're ok with higher risk, there are many more worth considering.
What you call bias, I correctly call telling it like it is. The fact that Bitcoin Cash is the best current alternative to fulfill the market's fickle need for name recognition and network effect, and the fact I have put my money there, does not detract from the obvious points of fees and transaction times.
You'll note this line:
"although nowhere will be safe in this type of event but maybe fiat."
I didn't have time to write a longer, more even-handed post. If people are looking for a crypto safe-haven, then Ethereum is also possibly an option that would be "harmed less" if Bitcoin went to sub-$1000 in a Gox-like event again.
FIAT IS PROBABLY ALL THAT IS "SAFE" IN SUCH A CRASH.
PS - I liked your original comment better, before you edited it to sound like I am some sort of FUD spreading pumper, instead of the wise font of Crypto knowledge I actually am:
PS - Yes, for anyone who hasn't read my other posts, I hold a lot of Bitcoin Cash - the rest is in Steem, EOS, NEO, OMG, (edit: forgot I have some Monero too) and some small holds that don't really merit mentioning. Had this post been intended as serious financial advice, rather than merely a big warning sign, I'd have mentioned that.
NO CRYPTO IS SAFE.
Hey @lexiconical, just reached out to you on discord. Would love to chat more about this with you. Definitely see how the total amount of tether could potentially not matter, but the potential part is key for me. The other options outside tether would come into play in my opinion.
I'll check in with you there. Happy to offer my thoughts. I'm trying to find the post I saw that did the math on it, but that $30m? Tether caused a drop of...like $13 billion. I calculated that if you extrapolated that to 100% of Tether going bad, BTC would see a price drop of -154% with the numbers I had at that time (but, again, I can't find that post). Obviously, that's more than could even happen so really the point is simply...Tether have an out-sized effect on the market, since they are mostly parked at the largest price-setting exchange.
Going to repaste this here, just in case anyone hasn't seen it. This is my real main point, Bitcoin Cash is just a suggested escape hatch for diversification:
"See the link dump at the bottom to do your own due diligence, but leaving your coins at exchanges throughout this holiday weekend may be poor judgement."
You’ve got me thinking I’ll be spending my holiday weekend doing even more research...and I thought it was going to be a relaxing holiday....thanks a lot for ruining that lex ;P lol
@lexiconical as you said
"I'm trying to find the post I saw that did the math on it, but that $30m? Tether caused a drop of...like $13 billion. I calculated that if you extrapolated that to 100% of Tether going bad, BTC would see a price drop of -154% with the numbers I had at that time (but, again, I can't find that post). Obviously, that's more than could even happen so really the point is simply..."
In the interest of due diligence, if the post you made reference to can be found it will help alot
I can see both sides to this argument.
I see USDT as a quick and easy way to get out of a crypto, and store the value in (effectively) dollars, backed by the company behind the currency, Tether.
Say you sell 1BTC @ $10k and have it in USDT.
The bitcoin price crashes to $5k, and you decide you want to cash out real dollars.
Surely you can then buy BTC again (this time owning 2BTC) which you could then transfer to Coinbase (or the alike) for selling?
The only problem I see with this is the company, Tether. I may be missing the point, but having them create more USDT i don't necessarily see as a problem? As long as they have it backed up in real $ what's the problem? I haven't seen any solid evidence of them not being able to honour that.
Care to clarify your point on how market caps can be faked?
Monero is also my preferred coin of choice in the long run.
Hopefully this article on how the order book creates a "fake" price will cover your questions:
https://steemit.com/taxes/@lexiconical/valuing-steem-rewards-as-taxable-income-is-a-vast-overstatement-of-tax-liability-part-2-the-thin-order-book-and-flash-crashes
Great article, but very outdated - using a BTC price of $1,500 ??
Oh wait, that was 5 months ago :-/