r00lish67
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Post by r00lish67 on Jun 6, 2021 18:57:37 GMT
Interesting points but yeah, big surprise, I have to agree with registerme and mfaxford I completely agree that inflation is higher than is officially presented. I also agree that the USA is printing money like crazy. As well as possibly generating high ongoing inflation, it also possibly risks their long term status as the World's reserve currency. Where we diverge is on the corruption/equivalence aspect. I'm afraid I don't feel it's hypocritical in the slightest to entrust the democratically elected Government of the USA (and pals) to print money out of thin air more than I do a bunch of bandidos (of whatever number) in the Bahamas doing the same for their own benefit. I also have to strongly disagree with the idea of presenting Bitcoin and cryptocurrency in general as some sort of saviour to the World's troubles. It couldn't be further from the truth in my opinion. If anyone wants to look, what you'll find is substantive and very real stories that show crypto is enabling ransomware (Biden on that one recently), is environmentally damaging (esp. Bitcoin) and is enabling a cesspool of fraud through unregulated exchanges. The only reasons anyone touches the stuff in real life is either because they'll think it'll make them rich in fiat currency or because they want to hide/transfer/extort ill-gotten gains. If anything, it's becoming a cult (see below for the recent Bitcoin conference):
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r00lish67
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Post by r00lish67 on Jun 6, 2021 9:15:27 GMT
Re: "Regarding the FUD... it's just that. I've been hearing about Tether supposedly imploding for ... checks notes... 5 years now. Funnily enough, a USDT is still worth a USD and nothing has happened. Who knew?!" You say 5 years, ribs , but look at the market cap in the graph below. As you can see, it goes loopy only from about Spring 2020. This graph isn't even the half of it as it only goes up to February 2021. 5 years ago when you started hearing rumours, the market cap was $2,900,000. So, indeed, who cares.At the end of this graph, in February 2021, market cap was about $30,000,000,000. Thirty billion.How many USDT's are floating about now, just 4 months later? $64,000,000,000. This organisation, with 11 employees, a Bahamian bank, an invisible CEO, and no headquarters is now printing $1bn 'worth' of USDT literally every few days. This is the company that used to insist their reserves were 100% backed by US dollars, but then were forced to admit that actually they only hold 3% in USD and 97% in 'other stuff' which isn't audited. If we were to take their word for it, much of that 97% is in commercial paper, making them nearly as big as Vanguard in that respect. 11 employees. Where I totally agree with you is that USDT is " a bit useful for traders" but "basically just another shitcoin". So why on earth is it approaching the market cap of very very large financial institutions? I'm not going to be brave/stupid enough to say this is all going to blow up very shortly, as we all know crazy things in markets can persist far longer than anything rational would suggest. I also couldn't say for sure what the wider impact will be to other cryptocoins if it does go. But surely you can't blow a $60bn+ size hole in an ecosystem that uses Tether without it being a very rocky road indeed I'd posit. Attachments:PNG (41.29 KB)
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r00lish67
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Post by r00lish67 on Jun 4, 2021 20:25:34 GMT
Never thought I'd raise an eyebrow in interest at a 1.00% 1 year fix, but here we are.
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r00lish67
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Post by r00lish67 on May 26, 2021 11:24:25 GMT
It's going to be interesting to see the ramifications of this, and how it's taken up by the press and the government etc. Heads should roll, and judging by the past 7,362 episodes over the last 5 years when this was the case, then nothing will happen. Ultimately the person in theoretical charge of being responsible is utterly irresponsible, and anyone in that party with a shred of decency has long since left. Not that any of this is news to you, I know. Hmm, that was meant to be a jokily high number, but I don't know - 7362? Could be.
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r00lish67
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Post by r00lish67 on May 25, 2021 15:43:50 GMT
Seems a bit of a live event, this. The cryptosphere have been aware of the Tether situation for ages. I only really learned about it last night. 2 hours ago, you see a US finance TV show host with 1.6M Twitter followers start to smell a rat. Also, just learned that 80% of Bitcoin is bought with Tether magic-money versus cash. Don't know if he's hanging about, but ribs, what's your learned take on all of this?
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r00lish67
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Post by r00lish67 on May 25, 2021 15:02:38 GMT
Am I missing something? If you put money into a "crypto" that's promised to be 1:1 with US$... why not just put your money into US$? If there was a sustainable 13% return on investing those 1:1 US$ crypto, then why isn't/wouldn't that be available from US$ as well...? Others who have actually dabbled can probably comment more authoritatively, but as I understand it, it's a way of 'going to cash' and without the pain/hassle/cost of actually selling and buying crypto for real money. Putting crypto you wish to actually spend into a stable form otherwise is not quick, cost-free and without hassle. I wouldn't be surprised if there's some element of tax avoidance attempts going on there too, but that's me speculating. Appreciate the above sounds like total garbled nonsense for an asset class which claims to be a currency. But, hey ho, there it is. Re: The 'interest' you can earn, well quite. I was told by someone with a virtual straight face that he didn't understand why people didn't just keep their fiat in a stablecoin instead of a savings account because the interest rate is much higher. I explained the relationship between risk and reward and suggested to him that the risk he was running with stablecoins might be higher than he appreciated given that. Quite a bit higher by the look of all of this.
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r00lish67
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Post by r00lish67 on May 25, 2021 14:40:34 GMT
lotus_eater ref: "I still can't believe people are putting huge sums of money in to it, yet still they do. Billions of dollars. There are people much more crypto-literate than me doing it though, so perhaps there's something I'm missing?" I don't think you are. Judging by this sort of reddit thread most participants seem quite aware of the Tether situation, yet they either think they're ok because they're using it sparingly or that as you suggest, they use an alternative. The other interesting trend from that thread that some highlight is that it's difficult to avoid using it even if you don't ideally want to in some cases. It seems beyond doubt that Tether is a time-bomb. They can't forever just generate cash from nothing and get away with it. As one observer suggested, it wouldn't be surprising to see them close up shop claiming to have been hacked in the near future, disappearing off with a very large suitcase of cash* The question is whether the risk to crypto is as systemic as the blog I linked to suggests it is. It's difficult to tell exactly, but having their informal equivalent of the FED money magic machine disappear in a puff of smoke is going to make for very interesting viewing. This story makes the P2P industry look as wholesome as the Hovis ad by comparison. *Well, probably Dogecoin actually
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r00lish67
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Post by r00lish67 on May 25, 2021 9:04:15 GMT
Last night I went down a real Crypto rabbit hole, and found some rather startling stuff. I'm now rather more convinced that Crypto is going to explode at some point. The reason why is due to what's going on at Tether. Tether is a firm that offers a 'stablecoin' called USDT. It's a significant part of the crypto eco-system, with a $58bn market cap. USDT is theoretically pegged to the dollar and meant to act as the place crypto enthusiasts switch their funds into when they want to sell out of bitcoin/ethereum et al to somewhere, well, stable. 1 USDT = 1 US$ is the idea, and Tether keeps dollar reserves equivalent to the number of USDT's in circulation to keep it stable. The trouble is that these reserves don't really exist, certainly not in dollar form. What they claim exists as collateral has not been verified by anyone as they sit unregulated. They initially claimed to be 100% backed by US$, but now claim to have 3% dollars and much of the rest as commercial paper (mostly) as reserve, but the amount they would have to have to make this true would put them near par with Vanguard. They have no known physical offices in the World, no normal bank will handle their funds (they currently use a Bahamian bank), and they are have had and indeed do have numerous legal problems. The scary thing is that they almost act like a central bank in the crypto space. They have the ability to magic USDT out of thin air to be used to buy crypto and inflate prices. Everyone has to trust them that there really is something there to guarantee those tokens if everyone wants to sell at once. What is interesting is that 3 days ago, despite the huge sell-off of crypto, Tether issued 1 billion $ worth of USDT due to 'institutional demand', which is 'fortunate' as otherwise the whole thing could have collapsed. I'll stop there, as this blog post covers it excellently, but suffice to say this is a very murky looking operation indeed. I would expect to hear an awful lot more in the mainstream about Tether in the fairly near future. The amazing thing is, this is all mostly known and understood by the bitcoin community. An open secret, you can google it and check all of this stuff. It's just that no-one cares whilst money is being made as everyone is gaining from all of this "coin printer go brrr" activity (oh, the irony). edit: As it was written so succinctly here, I'll repeat it be more explicit about what is alleged here. Deltec is the aforementioned Bahamian bank. "So, we always knew that Tethers were conjured ex nihilo, used to purchase Bitcoins, and used to run up the price of Bitcoin. What we did not know for sure was how they were profiting from it: dumping Bitcoin into the market and getting real USD was one possible answer. Well, thanks to Deltec, we now know how this scam operates, soup to nuts. Here we go...
Tether creates Tethers backed by absolutely nothing
Tether (and other conspirators) use Tethers to buy Bitcoin via exchanges
This leaves Tether with Bitcoins which it has acquired at no cost, and it also pushes the price of Bitcoin ever higher
Meanwhile, the not at all shady folks at Deltec, seem to be doing a line in wealth management, including offering Bitcoin as an investment vehicle. Deltec exchanges inflowing real USD capital from investors, for Bitcoins which Tether bought for no cost, with Tether vending machine tokens.
The real money Tether receives for their Bitcoins, bought with unbacked worthless Tethers, will be pointed to in their document filings as constituting part of the USD backing for Tether.
The more Tether pumps up the price of Bitcoin, the more demand Deltec has to hold it, and the more real money Tether can extract for their Bitcoins. If you think about it, by liquidating their Bitcoins this way, Tether avoids the problem of selling into a market, they are working to inflate"
edit2: To their credit, the FT have covered some of this in an article that had escaped my attention.
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r00lish67
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Post by r00lish67 on May 20, 2021 12:21:22 GMT
Just to drop in a good piece I've just read on BitcoinIncluding one argument I haven't heard before: "China, Iran and Russia are playing the dominant role in the world of cryptocurrency. In the last week of April, mining pools based in China accounted for roughly 90% of the processing power (“hash rate”) in the Bitcoin network. Roughly three weeks ago, a power outage in the Xinjiang region of China resulted in a plunge in global Bitcoin processing. Bitcoin mining — the process of record keeping for the “immutable” chain of record on which the Bitcoin network depends — is dominated by entities in countries with the stated objective to harm the interests of the United States. Bitcoin proponents continuously assure us that this is “just about to change,” but the data has not shifted in a meaningful manner in the last five years. This is not a decentralized system. It is centralized in the countries that seek our destruction"Personally, partially due to my belief that Crypto is a sack of old balls, I've just bought some gold as a bit of a diversifier. Suspect this is where the crypto fans will end up in their endless quest to escape fiat currency. <Where's a rolling eye emoji when you need one?>
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r00lish67
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Post by r00lish67 on May 3, 2021 9:36:08 GMT
For me, it was the first Wind Turbine, and/or The Jock Boatyard, can't remember which "manifested" first, but whichever came first it made me stop and think out loud to myself, "Hang on, this isn't right?", and the second was enoughto convince me to immediately start pulling out. Unfortunately for me/us, by then ( years ago) FS Zombie Loans was already establishing as a virtual Sister Company. For me, I think it was when a certain "Egyptian Deity" appeared, spouting his utter drivel about how fantastic the platform was and how much he was making when clearly all the evidence was showing that he was at best a complete lunatic or else a malevolent spirit. By the way, I wonder where he is now? Probably out somewhere telling people that as long as you put no more than 1% of your money in each crapcoin then no-one has ever lost money that way.
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r00lish67
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Post by r00lish67 on May 2, 2021 10:02:35 GMT
Times article"EY stepped down as the auditor of Kuflink after it highlighted what it called “significant” deficiencies in internal controls at the business, a sponsor of Southampton FC. “We believe the controls present; the level of governance evidence; the level of record-keeping and the general oversight of the business are currently inadequate.” It said that “significant work” was required to improve them." "In Kuflink’s most recent annual accounts, for the year ending June 30, 2019, EY highlighted “significant doubt” over the company’s ability to continue as a going concern." Not brand new news, but this had somehow passed me by. Doesn't sound very good, does it?
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r00lish67
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Post by r00lish67 on Apr 27, 2021 12:29:11 GMT
Thanks for some further explanation mfaxford, but I still can't get at the nub of this. You've explained the purpose of proof-of-stake / staking, but more fundamentally what is the value being generated from this that means we retail investors deserve 8-12% interest? Who pays the interest, and why is it worth it? We don't have to pay anything directly to transact in fiat cash and Mastercard/Visa etc take a very small % of card transactions. With crypto dividends, your explanation makes it sound a bit like P2P/crowdfunding except at a level of abstraction higher, with the value being added that earns these dividends being basically that it's being lent out. But if so, that's not really a dividend is it? That's a risk premium for lending people money. It seems dangerous to have that marketed as a dividend. Re: the ASDA example, yes exactly it does sound more akin to P2P lending than supporting simple transactions as I had originally suggested, but again if that's the case are we not in danger of abstracting away risk and pretending it's easy interest? I'm actually genuinely going to look more into it (very unlikely to invest, but who knows). However, at the moment all I can envisage is at some stage the tide going out and an awful lot of murky parts of this infrastructure being exposed. If, for example, there are a bunch of questionable loans masquerading as pseudo-dividends, then that's fairly obviously not going to turn out well when the economic conditions are less bubbly/benign. Finally, yes I agree there's definitely some overlap in risks between P2P/Crypto, though to me Crypto appears laden with a whole order of magnitude more risk at the moment, and I'm no great advocate of P2P.
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r00lish67
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Post by r00lish67 on Apr 27, 2021 11:26:57 GMT
Chatting pretty amicably elsewhere to Crypto enthusiasts, some of the stuff they come up with is quite something.
Sorry if I'm just behind the curve with what everyone knows, but these ideas are new to me:
1) Crypto staking - You basically seem to be paid 8%-12% p.a in order to support transaction validations of weird and wonderful types of crypto by allowing them to use your 'resting' crypto.
2) Crypto dividends - There are a whole raft of types of crypto that claim to pay you dividends simply by holding the coins.
What I find interesting is how complex and wide the Crypto sphere in becoming. I try to keep an open mind about it, but I frankly really struggle. It still to me looks like an awful lot of mostly young people trying to convince themselves that the more complex they make the environment, the more real it becomes and the less risk there must be because just look how much of it there is.
I haven't attempted to explain above how a theoretical currency can pay dividends, or even if we treat it as a speculative investment, off what earnings are dividends being generated. Nor have I explained how there can be a risk-adjusted basis to earn 12% simply by allowing your coins to be used for transaction validation.
I haven't because I can't. It makes me feel like a luddite, but it frankly still seems like utter horseshit to me.
I mean, I'm trying to relate this to the old world. Imagine being paid 12% interest for your £'s being used to support other people spending their £'s to buy stuff at ASDA.
I have no doubt, because I already have been, that I would be told I simply don't 'get' all of this, if I repeated the above to these chaps. That I "need to do some more research". When I do this research, I come up with lots of websites with names like "coinlover.com" with adverts of scantily clad ladies and meme gifs of coins and sports cars. In between all of that, there are pictures of rocketships, which I think is the main thesis here as far as I can see.
Definitely more research required though, I feel.
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r00lish67
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Post by r00lish67 on Apr 19, 2021 14:00:54 GMT
I think the reason for my post today is actually summed up by this timely post (I really recommend Nick Maggiulli's blog in general btw). It's more than just a dig at crypto, it's the general unhinging of investing from any sort of fundamentals in the market at the moment. I mean, investing is never strictly only about that of course, but this is something else. As he points out " Currently, we have an antiquated video game retailer (GME) being valued at $10 billion (nearly 10 times what it was worth at the start of the year). We have a literal joke internet coin (Dogecoin) that has a market cap of over $50 billion. And I just recently heard about a single deli in New Jersey (HWIN) that was recently valued at over $100 million. The deli had $35,000 in sales over the previous two years"
We are living in a world where the best joke makes the best investment. It's just so bizarre. The consolation I take for not being one of those able to take such risks with any meaningful amount of money, is that if you have the *diamond hands* to hold onto a doggy joke investment all the way until you're a millionaire, then you're probably also insane enough to hold it all the way down too, or mistakenly diversify into the less successful catty coin edit: oh and, this:
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r00lish67
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Post by r00lish67 on Apr 19, 2021 10:05:30 GMT
What do people think about crypto at the moment? I've just been watching as an interested observer. I see now that Dogecoin has a market cap of $50bn.
I think at this point, partially because of the Doge situation, I'm leaning towards thinking that this is all going to collapse (again). The thin veneer of respectability/purpose that Bitcoin enthusiasts try to engender is totally undermined by Doge, the coin started as a joke, rapidly catching it up. The bigger joke is that Bitcoin has about the same level of utility as Doge, or at least will when countries that have problematic currencies like Turkey ban it from usage.
It also may follow Turkey's lead in banning crypto transactions, supplanting it with their own respective digital currencies. In a way, its rise is its own downfall. What sensible Government would sit by and allow an unregulated currency to take root?
Aside from those reasons, even if I'm totally wrong about crypto's direction, I sincerely hope the surrounding culture changes. Whatever it's actual merits, what can be said for sure is that crypto currently is a magnet for shills, fraudsters, scams, anti-establishment weirdos and gambling rather than investing. It's like Vegas for investors. You can barely mention money on social media without a bitcoin bro weighing in to diss the fiat currency that is the only useful reference point for how much Bitcoin is 'worth'.
Appreciate the above sounds like sour grapes to some, but I should say well done to those who have either cynically or fanatically made big bucks in the scene. There's certainly money to be made whilst there is so much funny money floating around, which I believe is the only reason why some major institutions are taking note or taking positions in it.
I suspect much of the exuberance is indeed down to all of the stimulus floating about looking for home in a zero yield world - heck, even P2P is seeing renewed interest because of it. I suspect at some point we'll see a dose of inflation, some interest rate rises, and then large inflows back into evil fiat, exposing those who have been for quite some time, swimming naked.
Either that, or perhaps the institutions playing around with crypto themselves will eventually cause some 2008-style leveraged implosion. Wouldn't surprise me. Whilst Bitcoin et al are a cesspit of behaviour, it's not as if major financial institutions don't regularly get their hands dirty when there's money to be made (e.g. Gamestop episode!).
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