The Sceptics thread.

JohnnyFlash

https://mobile.nytimes.com/2018/06/13/technology/bitcoin-price-manipulation.html

New academic research about how the price of Bitcoin was artificially manipulated last year. Yet again, our good friends in Tether/Bitfinex get most of the attention. Surely only a matter of time before the feds get them closed down.

sexmag

JohnnyFlash wrote: »

https://mobile.nytimes.com/2018/06/13/technology/bitcoin-price-manipulation.html

New academic research about how the price of Bitcoin was artificially manipulated last year. Yet again, our good friends in Tether/Bitfinex get most of the attention. Surely only a matter of time before the feds get them closed down.

They have sent cease and desist letters to plenty of icos.

If this is so obvious why haven't they gone for them yet?

JohnnyFlash

sexmag wrote: »

They have sent cease and desist letters to plenty of icos.

If this is so obvious why haven't they gone for them yet?

Don’t work for the SEC or the Feds, Sexmag. Don’t know why they haven’t. Especially with Tether and Bitfinex. That’s the real elephant in the room. It’s a multi billion dollar fraud taking place in plain sight.

makeorbrake

JohnnyFlash wrote: »

Don’t work for the SEC or the Feds, Sexmag. Don’t know why they haven’t. Especially with Tether and Bitfinex. That’s the real elephant in the room. It’s a multi billion dollar fraud taking place in plain sight.

Yes, and there are several other 'stable coins' being brought to the fore over the next few weeks. I trust you will add them to your watchlist.

On a serious note, there is a need for one stable coin - but some sort of mechanism is required to keep it honest. Not sure how that will be achieved..

JohnnyFlash

makeorbrake wrote: »

Yes, and there are several other 'stable coins' being brought to the fore over the next few weeks. I trust you will add them to your watchlist.

On a serious note, there is a need for one stable coin - but some sort of mechanism is required to keep it honest. Not sure how that will be achieved..

I’ve heard about the other ones. Can’t be keeping an eye on everything so Tether is the one that holds most interest. There’s an increasing amount of attention being focused on it, when the tethers were printed, which exchanges use it, how it’s used to provide fake liquidity to the market and so on. Perhaps they do have 2.2 billion in escrow, but you’d ask why someone would do that and earn so little, if any, return on investment. It’s excellent for money laundering though. I’ll give it that.

grindle

makeorbrake wrote: »

On a serious note, there is a need for one stable coin - but some sort of mechanism is required to keep it honest. Not sure how that will be achieved..

TrueUSD have a large auditing firm verifying that they have the correct amount of USD in escrow every fortnight.

DAI is backed up by collateralised ETH (PETH is their name for it) which is being longed and shorted against DAI as it ticks up and down. It's the kind of system quants would be a fan of and will be backed up by much more than ETH in future updates - much more than cryptos, even. They aim to let anybody tokenise whatever asset they want and people can hedge against that asset's appreciation or depreciation in price. Much more complex but more in line with Wall Street's fetish for collateralised securities or assets and all the arbitraging that can be done between assets and markets relative to eachother.
There's opportunity within Maker to collateralise total crap if somebody chooses to but somebody else is going to have to want to use that as their hedge which would place the fault on them.

makeorbrake

@Grindle : thanks for the feedback. What's to stop true USD from changing their policy down the road? It would still be better if there was a more transparent way to determine that funds are there at all times. Clearly a trustworthy stable coin is essential. In hindsight, such a thing would have saved me thousands.

makeorbrake

A couple more queries - if TrueUSD and DAI appear on the face of it to be more credible, surely those who had been using Tether would no longer be going near it?

Secondly, this investigation and the recent academics report into tether - news that's been around for months - but in any case sent prices south. Is that it? Is it priced in now?

grindle

makeorbrake wrote: »

What's to stop true USD from changing their policy down the road? It would still be better if there was a more transparent way to determine that funds are there at all times. Clearly a trustworthy stable coin is essential. In hindsight, such a thing would have saved me thousands.

That's the problem with any centralised solution, and why they have auditors confirming their stash so frequently.
Maker/DAI is the more transparent thing we all want, but also has more scope for dummies buying tokens for tokenised assets which are just as opaque as Tether.

makeorbrake wrote: »

A couple more queries - if TrueUSD and DAI appear on the face of it to be more credible, surely those who had been using Tether would no longer be going near it?

Traders? In this market? There are plenty that think it isn't a scam and others who don't care what's a scam as long as they can scalp a profit from it.

makeorbrake wrote: »

Secondly, this investigation and the recent academics report into tether - news that's been around for months - but in any case sent prices south. Is that it? Is it priced in now?

I don't think it's priced in until Tether drops to 0 or they have a 3rd-party audit proving the funds are there. Market movements recently have all had their characteristic Bart Simpson lines, - if Tether drops to nothing I'd expect a surge in ETH and BTC prices as USDT is sold to the ground, then a collapse of their prices as people sell to their fiat gateways and wait on the sidelines to see where it settles (hopefully @ $10 ETH again! ).

makeorbrake

grindle wrote: »

Traders? In this market? There are plenty that think it isn't a scam and others who don't care what's a scam as long as they can scalp a profit from it.

That's a truly irrational feature of this market though. There is a slim possibility that the funds are there (and as an aside, we had Mike Novogratz saying they probably are there...which made me think of that guy in the same terms as John McAfee!). Even if you think that the funds are there - if there's an alternative that is opening its books to regular audit, wouldn't you take that option instead!? Why take unnecessary risk?

grindle wrote: »

I don't think it's priced in until Tether drops to 0 or they have a 3rd-party audit proving the funds are there. Market movements recently have all had their characteristic Bart Simpson lines, - if Tether drops to nothing I'd expect a surge in ETH and BTC prices as USDT is sold to the ground, then a collapse of their prices as people sell to their fiat gateways and wait on the sidelines to see where it settles (hopefully @ $10 ETH again! ).

I find that very frustrating though. I have an interest in something and want to go back in - but how can that be done intelligently with this nonsense hanging over crypto? I know you say that it would probably result in a surge in ETH/BTC initially but I'd be concerned that I wouldn't pick up on this in time ...and to get that late would be fatal.

I really hope there's some substance to these 'investigations' - as I'd like to see Tethers door being kicked in and the mystery to be resolved once and for all.

grindle

Novogratz's rationale is an Occam's Razor type of thinking.

"They might be defrauding us in this extremely public way, but that would be imbecilic." - Mike Novogratz probably.

The past two decades have taught me there's no limit to the shamelessness in business or politics so it's a coinflip in my head. And the coin being flipped only exists in code and probably isn't backed by anything.

sabat

This is probably the best summation of the bitcoin/blockchain scam I've read:

https://thebaffler.com/salvos/zealots-of-the-blockchain-golumbia?utm_campaign=enjoy&utm_source=shark-tankification-riederer

makeorbrake

sabat wrote: »

This is probably the best summation of the bitcoin/blockchain scam I've read:

https://thebaffler.com/salvos/zealots-of-the-blockchain-golumbia?utm_campaign=enjoy&utm_source=shark-tankification-riederer

I don't think it is.

Bottom line...

- Bitcoin is NOT crypto.
- Crypto is the first financial event where institutions didn't have their head in the trough from the get-go. You can be sure that some of them are sore over this.
- Is there enthusiasm for crypto as a new tech? Sure. When was there not enthusiasm for new technology?
- Can that enthusiasm be over-cooked? Absolutely.

The article speaks to religious psycho-babble. That's not the reality. There are a very broad spectrum of people involved in crypto. Sure, some of them may be blind in their views but that is not representative of all stakeholders. Many others take a much more pragmatic view.

As regards 'scam', explain to us how bitcoin or crypto is a 'scam'? I don't agree with the slant to that article but at no point does it identify btc or crypto generally as a scam.

Wanderer78

makeorbrake wrote:

As regards 'scam', explain to us how bitcoin or crypto is a 'scam'? I don't agree with the slant to that article but at no point does it identify btc or crypto generally as a scam.

I think Jim Rickards said bitcoin, is a Ponzi scheme, bubble and scam all at the same time, but with no one in charge, he's probably right

makeorbrake

Wanderer78 wrote: »

I think Jim Rickards said bitcoin, is a Ponzi scheme, bubble and scam all at the same time, but with no one in charge, he's probably right

A guy who earns a crust pimping gold? Ok, I guess he would have a neutral unbiased opinion....(!).

Otherwise, a 'scam' where no-one is in charge? Really? He's just trying to label it with a term that in no way fits it. A scam is defined as a dishonest scheme or a fraud. Frauds are perpetrated by people.

Wanderer78

makeorbrake wrote:

Otherwise, a 'scam' where no-one is in charge? Really? He's just trying to label it with a term that in no way fits it.

Come on now, he's not the only monetary expert out there explaining the current failures of bitcoin and cryptos, it's clearly obvious the speculators are in town, cleaning up. I suspect Steve keen is right, it may take until the second or third generation of cryptos for this idea to be truly workable in reality, but at the moment, I'd approach with caution, and be prepared to lose some money.

makeorbrake

Wanderer78 wrote: »

Come on now, he's not the only monetary expert out there explaining the current failures of bitcoin and cryptos,

Yup, but that's completely different from the point you made. Bitcoin in and of itself is not a scam - it's impossible for it to be so. People perpetrate fraud - not things.
Secondly, you need to be mindful of whom you quote - as clearly the guy has a vested interest to talk it down in the same way as Jamie Dimon (coming out with essentially the same thing).

Are there 'failure's' and issues surrounding the speculative aspect of crypto? Absolutely - without a shadow of a doubt. It's a two track thing. You've got the speculation end - and then you have the actual tech that's being worked on every day and improved.

Wanderer78 wrote: »

I suspect Steve keen is right, it may take until the second or third generation of cryptos for this idea to be truly workable in reality

Agree completely. BTC may still maintain some relevance and may work out a lasting use case. However, we already have the 3rd gen. of crypto's emerging and it's easy to identify some iterative improvement upon what went before.

Wanderer78 wrote: »

but at the moment, I'd approach with caution, and be prepared to lose some money.

Absolutely - with no doubt, crypto is as risky as hell as an investment. I don't think there's anyone here who denies that.

Kenny Logins

Tether transparency...

https://tether.to/fss-report-transparency-update/

rapul

Wheeerreesss Johnny?!

Whelo79

Kenny Logins wrote: »

Tether transparency...

https://tether.to/fss-report-transparency-update/

Apparently they have shown a snapshot of two bank accounts over several days which account for all the funds but it is still way short of a full audit.

Kenny Logins

Whelo79 wrote: »

Apparently they have shown a snapshot of two bank accounts over several days which account for all the funds but it is still way short of a full audit.

Maybe they should get Roger Ver in to read a script to camera.

kaymin

I'd have thought the FSS review could be much more thorough. What's to stop someone transferring the money in temporarily once FSS was engaged and withdrawing it once the review is over....The review should have covered more than just one recent day.

"FSS has not performed any procedures or made any conclusions for activity prior to or subsequent to June 1st, 2018, Close of Business."

Tether should produce a full GAAP balance sheet which shows the source of the 2.5b and have this balance sheet audited.

makeorbrake

rapul wrote: »

Wheeerreesss Johnny?!

JF is in no way interested in hearing anything that might be in some way encouraging about the crypto space.

Tether was the one item that I did agree with him on (and probably still do....have not even looked at that link above...will do later when I have a bit of quiet time). However, someone brought this to my attention a couple of days ago ->.
https://bitcoinmagazine.com/articles/clearing-misconceptions-how-tether-should-and-does-work/

Sent it on to him seeing as he was on point re. Posting when Tether was being pushed onto the market....but not a word in response.

Still not convinced but will sit down later on and look at this new info and see. Would be good though if they could just get the auditors in and get things cleared up beyond doubt. Someone suggesting to me recently that they couldn't because of client privacy....(???)

JohnnyFlash

makeorbrake wrote: »

JF is in no way interested in hearing anything that might be in some way encouraging about the crypto space.

Tether was the one item that I did agree with him on (and probably still do....have not even looked at that link above...will do later when I have a bit of quiet time). However, someone brought this to my attention a couple of days ago ->. https://bitcoinmagazine.com/articles/clearing-misconceptions-how-tether-should-and-does-work/

Sent it on to him seeing as he was on point re. Posting when Tether was being pushed onto the market....but not a word in response.

Still not convinced but will sit down later on and look at this new info and see. Would be good though if they could just get the auditors in and get things cleared up beyond doubt. Someone suggesting to me recently that they couldn't because of client privacy....(???)

I don’t get into debates with strangers via personal messages. I’m sure people will understand.

When I hear something positively about the space then I’ll acknowledge it. All I see now is huge valuations, exchange hacks, broken code, monsterous energy usage, criminality, pump and dumps, no usage apart from speculation. And thousands of bag holders desperately hoping for something (even legally dubious) to kickstart the bubble again. A cesspit of an ‘industry’. As pure an example as you’d ever see for the need for strong regulation, and what happens when a stupid libertarian wet dream becomes reality.

makeorbrake

JohnnyFlash wrote: »

I don’t get into debates with strangers via personal messages. I’m sure people will understand.

BS! Firstly, you're posting in a discussion to 'strangers' right here right now. As regards 'debates', you're right on that - you just dump a load of nonsense here and when you are called out on it, you don't respond...you just come back with the same argument possibly accompanied by another dubious link.

You spend an eternity posting material on Tether - I send you a link to something that tackles the subject from the counter point and you make no comment on it. I wasn't looking for a private audience by the way, I would have thought you would cover it here..whether it's that you agree with it for X reason or disagree with it for X reason..but you are not interested in anything that doesn't meet your bias. I've said it before and I'll say it again..you don't want dlt/crypto to succeed!

JohnnyFlash wrote: »

When I hear something positively about the space then I’ll acknowledge it.

Total and utter BS! See above.

JohnnyFlash wrote:

All I see now is huge valuations, exchange hacks, broken code, monsterous energy usage, criminality, pump and dumps, no usage apart from speculation. And thousands of bag holders desperately hoping for something (even legally dubious) to kickstart the bubble again. A cesspit of an ‘industry’. As pure an example as you’d ever see for the need for strong regulation, and what happens when a stupid libertarian wet dream becomes reality.

Yes, and you waste how many hours a week on it and it's all of these things? Doesn't add up for one second.

You can squeal all ye like but here's the deal...

- A shed load of crypto's will disappear, speculators will come and go and many will get burnt, good projects will continue to be developed, the eco systems to deal with crypto and to facilitate crypto will continue to be built out. Some excellent tech will be improved iteratively, use cases will be found and crypto will have it's real world impact.
THAT is how this is going to pan out whether you like it or not (and clearly you don't whatever your problem is - and I simply don't give a damn what that problem is).

Pintman Paddy Losty

makeorbrake wrote: »

- A shed load of crypto's will disappear, speculators will come and go and many will get burnt, good projects will continue to be developed, the eco systems to deal with crypto and to facilitate crypto will continue to be built out. Some excellent tech will be improved iteratively, use cases will be found and crypto will have it's real world impact.
THAT is how this is going to pan out whether you like it or not (and clearly you don't whatever your problem is - and I simply don't give a damn what that problem is).

Waiting 10 years now and the only use people seem to have found is as a speculative asset. Not too hopeful at this stage we're gonna see much more lad.

Bob24

Whelo79 wrote: »

Apparently they have shown a snapshot of two bank accounts over several days which account for all the funds but it is still way short of a full audit.

+1

What this proves is that they had the corresponding cash amount on bank accounts at a point in time, which is a start. But half of that cash could for example be loans which they need to repay. Only a proper audit with full traceability of the funds would prove they actually own assets matching the total tether amount, and these assets are secure and insulated from any financial commitment their holder might have. IMO the report they published doesn't guarantee in *any* way that if every tether holder wanted to redeem their money in USD they could be paid.

Whelo79

Agreed. But it is some security that they actually have/had $2.5B in their accounts very recently anyway.

makeorbrake

Pintman Paddy Losty wrote: »

Waiting 10 years now and the only use people seem to have found is as a speculative asset. Not too hopeful at this stage we're gonna see much more lad.

Rubbish. Bitcoin started as an idea shared between a few enthusiasts. There was little in the way of resources for it to bootstrap itself up the way. In the conventional environment where you would be talking about a start-up, there would be venture capital money injected to move things along.

Bitcoin is a grass roots development as it's people that have brought it up the way - not institutions or institutional money.

Furthermore, bitcoin is NOT programmable money OR a DLT technology that can support smart contracts for other utility uses. That started with Ethereum which is 3 years old.

Switching back to Bitcoin, it took a couple of hundred years to switch from coin to paper. It took 40 years to switch from paper to plastic. Secondly, have a look at this post here - scroll down to the bottom. They said that the web was a waste of time, that you couldn't find anything, that it was too slow, that it was only used by paedophiles, etc. That timeline spans over 60 years. Would you have come along after 10 and said you've achieved nothing - pack up your stuff and abandon any further development? GTF!

grindle

They're never going to listen to reason, they're too distracted wafting eachother's farts into their faces.