Bitcoin is a novel innovation that is actually useful to some people - it is artificial digital scarcity and a decentralized payment network that is separate from government or any centralized entity. It is totally voluntary.
Ethereum is also an absolutely fascinating technology.
Some people become “experts” and refuse to see innovation when it is staring themselves in the face. The world can’t change to these people.
Also regulation has been in the crypto space for years, dunno why these guys think it is some sudden new thing.
1. Engaging in human trafficking, which is really unfortunate for the poor and often non-white females who are being trafficked
2. Sponsoring terrorism, which sucks for the again young and often non-white females in schools that are being blown up, the women in markets getting shrapnel wounds, and the children losing parents
3. Funneling arms to terrorists, which allows them to resist police forces and continue forcing young people to be unwilling participants in the drug trade, prostitution and other pretty subpar life outcomes
So yes, it's really inconvient to have to deal with KYC and miss out on that sweet stock growth on foreign markets - I encourage your example to work with his local government to pass the appropriate laws to join the world economy.
1 and 2. If you read that post, and still think warrantless mass-surveillance via KYC mandates is good, then you must view the author as necessary collateral damage, "for the greater good". This is a cold, inhumane way to treat matters of justice. Anyway, to address your utiliarian logic: poverty is the biggest predictor of being trafficked, and KYC controls, as well as the various punitive and indiscriminate government measures they help enforce, contribute massively to poverty. They do relatively little meanwhile to stop crime, stopping less than 1% of it: https://www.ledgerinsights.com/anti-money-laundering-has-les...
3. That is also the argument the Chinese Communist Party makes for its various totalitarian surveillance/control measures in Xinxiang. Anyone with a basic respect for liberal democratic principles like privacy and presumption-of-innocence/due-process will reject warrantless mass-surveillance of financial transactions and the presumption of guilt inherent to disallowing individuals who haven't proven their innocence, by disclosing private information, from conducting certain classes of financial transactions.
>>So yes, it's really inconvient to have to deal with KYC and miss out on that sweet stock growth on foreign markets
That is incredibly daft. Individuals being able to generate/accumulate wealth has massive knock-on effects for the people around them and the countries they live in.
But here is a story about poor women of color who you seem more concerned about:
>>At a 2015 blockchain event, Nairobi-based bitcoin pioneer Elizabeth Rossiello answered an audience question about the impact on Somalians of a recent shutdown in remittance inflows after the U.S. government had labeled the country a “high-risk jurisdiction.” The AZA Group CEO’s answer was blunt: “They starve.”
I guess just more collateral damage according to the insiders in the AML/KYC compliance sector.
>>I encourage your example to work with his local government to pass the appropriate laws to join the world economy.
Uzbekistan is an authoritarian state.
And until he can transform Uzbekistan into, first, a democratic state, and second, a compliant organ of the global AML mass-surveillance regime, it's okay for insiders like you that he is a global third class citizen. All of the poverty alleviation that being presumed innocent, instead treated like a suspect/criminal by your discriminatory policies, would bring about, will be conveniently dismissed by you.
> and KYC controls, as well as the various punitive and indiscriminate government measures they help enforce, contribute massively to poverty
Poverty existed literal millennia before KYC. Sure, it'd be great to just end poverty, and when you do that we can talk about ending KYC. Before you end poverty, it turns out it's pretty easy to implement KYC and stop a bunch of harms.
> That is also the argument the Chinese Communist Party makes for its various totalitarian surveillance...
There's a difference between putting a Muslim ethnic minority in concentration camps, and telling people they're supposed to identify themselves before wiring around tens of thousands of dollars internationally or opening foreign bank accounts. If that difference is lost on you, your issues run deeper than KYC.
> the impact on Somalians of a recent shutdown in remittance inflows...
The ideal fix here is for Somalia to stop funneling money to terrorist organizations.
> The report titled "Following the Money", authored by former UN Expert panellist for Somalia, Jay Bahadur, said illegal payments were as high as $3.7 million between 2014 and 2020... Amal was particularly accused of handling cash sent to Abdulrab Salem al-Hayashi, who was in October 2017 sanctioned by the US Treasury for "assisting in, sponsoring, or providing financial, material or technological support for, or financial or other services to or in support of" Al-Qaeda-linked terror groups in the Arabian Peninsula.
And yeah, that sucks for the people who were just trying to survive, but that failure is entirely on Somalia and Amal who should of followed the required measures. Either follow the measures or you get expelled from the cooperative system.
It sucks to live in places like Somalia and Uzbekistan. I recommend leaving if you can, we have an international asylum process for a reason. It's not the duty of the US to help their citizens, nor is the US in a place to do so.
>>Poverty existed literal millennia before KYC. Sure, it'd be great to just end poverty, and when you do that we can talk about ending KYC.
Maybe you're not understanding what I'm saying, because the above has absolutely no relevance to the point I made.
Another attempt:
Poverty declines faster when economies grow faster. The financial exclusion created by the crude AML/KYC surveillance/risk-management measures you're advocating harms economic development and thereby slows poverty eradication. This in turn slows the eradication of vices like human trafficking, which are largely an outgrowth of poverty.
>>There's a difference between putting a Muslim ethnic minority in concentration camps
Strawman. The Communist authorities who you are emulating do more than just put a Muslim ethnic minority in concentration camps. They also impose a mass-surveillance system on them.
They justify these invasions of privacy with the same kind of anti-terrorist rhetoric you're using. You're in the same ideological boat as them, and display the same callousness, which is characterized by comments like this:
>>And yeah, that sucks for the people who were just trying to survive, but that failure is entirely on Somalia and Amal
KYC goes against liberal democratic principles like privacy and due process, and should be opposed if you believe in these principles. It stands to reason that it does far more harm, in all respects, than good.
> This in turn slows the eradication of vices like human trafficking, which are largely an outgrowth of poverty.
Human trafficking is not just a symptom of poverty, it's typically a symptom of a lack of law and order with strong systems that can deter human trafficking through a penal system. Giving human traffickers a bunch of cash isn't going to stop human trafficking.
> KYC goes against liberal democratic principles like privacy and due process
People in Somalia and Uzbekistan do not in any legal sense have privacy and due process. They do not live in Democratic regimes. Full stop. They have a moral right to those things, but it's on them to obtain it.
The US is not responsible for making sure non-citizens/non-residents have those rights. The US is not the gatekeeper of the world. The US is responsible for guarding it's citizens and residents - and there are KYC controls in the US that enable due process and privacy. Yes, if you're outside the US you don't get those protections but you never had them to begin with. You are welcome to come to the US or our allies and gain those things.
You can't force other people to transact with you. If we're freezing you out of an economic system because you keep giving money to extremists to kill women and children with, well, that just sucks to be you - you don't get to force us to trade with you. Take it up with your government.
>Human trafficking is not just a symptom of poverty,
It's obviously a result of multiple factors, but poverty is one of the major ones.
And law-and-order generally improves as economies develop. A law that excludes countless people from the mainstream financial system inhibits economic development.
>People in Somalia and Uzbekistan do not in any legal sense have privacy and due process.
They have some degree of privacy and due process, and the industry you are championing reduces that for them, using the US's dominant role in the global financial system as a pressure lever.
>You can't force other people to transact with you.
You're forcing people in the US to not transact with people in Somalia. You're not a libertarian here.
And AML/KYC laws violate privacy and due process rights domestically as well. It's not just international transactions that are affected by these laws. They are fundamentally laws that institute warrantless mass-surveillance.
>If we're freezing you out of an economic system because you keep giving money to extremists to kill women and children with, well, that just sucks to be yo
Once again, condemning people who have done no wrong, based something as crude as national association, and moreover, pretending you care about "women and children", while callously dismissing the devastating effect of financial exclusion caused by the policies that you are advocating remain-in/be-put-into effect, on millions of women children.
Tether has a very powerful place in the crypto ecosystem - it is the most widely used stablecoin. It was revealed in a court filing that it was not fully backed, it was like 70%, because governments seized some of the funds (according to Tether). This broke a fundamental promise Tether made - that all USDT was fully backed 1 for 1 with USD in bank accounts.
To remedy this, Tether now states USDT is backed 1 for 1 with cash and cash equivalents. For example, Tether released an "IOU" coin called UNUS SED LEO (LEO)[0] that trades at the amount of USD missing. Therefore Tether states it is now fully backed.
The veneer of sketchiness is actually preferable to a lot of crypto traders, who live in fear of various governments. This is why USDC is not as popular as USDT - many traders prefer a "vaguely sketchy" coin that is less likely to have their funds frozen by court order.
All that said, I worked at a company (Circle) that redeemed and minted billions of dollars of Tether back in 2017 / 2018. Tether serves big trade desks and is extremely popular in Asia, while USDC has become more popular in DeFi and is bigger in the west. Tether is not a giant ponzi scheme - it really has assets, and huge desks regularly mint and redeem billions of dollars.
Tether’s total supply didn’t exceed 2B at any point in 2017 or 2018 and it certainly didn’t fluctuate by anywhere close to that, particularly on the down side, during that period. I think either your dates are wrong or you’ve vastly overstated how much Tether Circle “redeemed” (please explain exactly the redemption process you used) over that period.
Yes, I recognized the language from that article/interview. It did not explain how Tether was redeemed by Circle. That interview did not cover in any detail how much Tether was redeemed or how Tether was wiring millions or billions of USD to Circle. I want to be very clear here that selling USDT is not the same as redeeming it directly with Tether themselves.
You are asking for the actual nuts and bolts? Everything is accomplished over telegram in the crypto space, including OTC trades. Circle had entities throughout the world and offshore bank accounts with those entities. You would ping Tether on telegram and say you want to swap USD for USDT or vice versa and wire transfer details would happen. It isn’t rocket science. I don’t know the exact amount but we had pretty transparent internal disclosure of the business and what each unit made in profit / loss, and what he said rang true for me. Circle Trade did something like $25 billion in OTC trades in 2018.
Hard to say exactly what the effect of regulators cracking down on Tether will actually be. If Tether gets delisted from exchanges and isn't redeemable for USD, then obviously Tether holders will get burned. But what effect exactly will this have on Bitcoin and other cryptocurrencies? I would expect that before Tether gets delisted, insiders will trade their Tethers for Bitcoin, pushing up the Bitcoin price, and then probably immediately sell that Bitcoin for USD (or USDC), as they will expect the cryptocurrency market to crash once the Tether news becomes public. While these buyers of Bitcoin will immediately sell for USD, they will create a lot of volume in Bitcoin trading, which could push the price up. So maybe we see a quick, sharp run up in Bitcoin price and volume along with a lot of Tether selling before news about Tether breaks publicly followed by a crash of the entire cryptocurreny market.
I do agree that it is really hard to take Rubini seriously.
Much of that has to do with the way he expresses itself: he's really obnoxious to listen to and one has to make a great effort to get past that 100-foot wall of aggression to try and understand if there's any value in his arguments.
I have honestly tried, and once you peel off the tone and posturing, I must confess there isn't much to be found.
Weaver's claim about Tether being a vehicle to inflate the price of Bitcoin is odd. The main Tether-BTC transacting I'm aware of is in high frequency trading. Any longterm position in Tether is effectively against BTC (electing to instead hold a tokenized USD). Furthermore, Tether has a market cap only 1/16 of BTC. You can say either are flawed individually, but their valuations are independent.
China also has a geopolitical incentive to promote crypto and counter the USD's current status as the reserve currency. The capability for the US to inject USD into itself while retaining a worldwide demand is undoubtedly at the forefront of China's mind.
one theory I've seen on tether inflation involves loaning tether via margin to people to buy bitcoin, which then pushes up the price of bitcoin, which then allows the tether loaner (that also holds bitcoin) to loan more tether as it's now backed by more valuable assets
The key complaint is that they are, in fact, NOT independent. You can use one to manipulate the other under the guise of being backed by USD when in reality its backed by loans backed by BTC (or some other permutation).
No, what they are all saying is that issuers of Tether tokens are buying bitcoins with their proceeds.
They so know because of bitcoin's stupendous price rise. And as the reasoning behind it they are pointing to Tether issuers' imminent facing of regulatory and criminal scrutiny.
>Tether being a vehicle to inflate the price of Bitcoin is odd
I'm not so sure.
I'm a great supporter of Bitcoin, but:
a) Tether worries me a great deal, especially if you dig into the background of the folks behind it. Unless tether lets itself be properly audited and proves cash reserves, it can indeed, in a rater straightforward manner, be used to manipulate BTCUSD
b) The current price action also worries me a great deal: it's IMO likely going to go through more 2018-like volatility events (i.e. a x5 haircut to shed speculators) through 2021 thereby lending temporary credibility to the nocoiners arguments.
I'd much prefer to see Bitcoin price be either stable in value or growing slowly.
But the nature of the beast makes that proposition a difficult one until it reaches its "natural" capitalization (whatever that may be - some say that of gold).
This is the CEO of MicroStrategy who mainstreamed Bitcoin investment, saying stuff like:
"Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy”
Background from Wikipedia:
On MicroStrategy's quarterly earnings conference call in July 2020, Saylor announced his intention for MicroStrategy to explore purchasing Bitcoin, gold, or other alternative assets instead of holding cash. The following month, MicroStrategy used $250 million from its cash stockpile to purchase 21,454 Bitcoin.
MicroStrategy later added $175 million of Bitcoin to its holdings in September 2020 and another $50 million in early December 2020. On December 11, 2020, MicroStrategy announced that it had sold $650 million in convertible senior notes, taking on debt to increase its Bitcoin holdings to over $1 billion worth. On December 21, 2020 MicroStrategy announced their total holdings include 70,470 bitcoins purchased for $1.125 billion at an average price of $15,964 per bitcoin. Saylor, who controls 70% of MicroStrategy's shares, dismissed concerns by observers that the move is turning MicroStrategy into a Bitcoin investment firm or exchange-traded fund (ETF).
He does seem like a bit of a lunatic but I'm not sure that it says much about Bitcoin. If you ever watch YouTube, you'll find there are similar characters in real estate, stocks, forex, etc.
Michael Saylor is the guy who "legitimized" Bitcoin
He is frequently mentioned in Bitcoin discussions as evidence that Bitcoin is mainstream: a rational, safe investment, good enough for MicroStrategy to invest hundreds of millions
When you actually watch him talk, the credibility vanishes
If you're going to write an article like this, it would be more honest to admit that you thought the same things were going to happen last year, and the year before that, but they didn't.
I mean you can't technically guarantee the scarcity of bitcoin. Even though it is the source code that there should be 21 million, you can just fork the repo and start again from scratch and call the first bitcoins mined epoch-1 and subsequent coins as bitcoin epoch-n. The public will come to understand any coins mined using the bitcoin protocol as bitcoins if this comes to pass.
Forks of Bitcoin have already happened multiple times. Bitcoin Cash and Bitcoin SV also claim to be the original Bitcoin, but the mainstream view is that the chain with the highest hashpower, highest trading volume and highest price is the real Bitcoin. Which chain is the real Bitcoin is entirely determined by the community and I don't see a plausible future where a sizeable chunk of the community agrees to increase the max supply.
I'm not too deep into this world, and you can correct me if I'm wrong but weren't those forks of the ledger due to technological disagreements and not folks starting over from scratch? Has anyone said, we are literally copying the exact same protocol and tech from bitcoin and just say this is another parallel version? As an end user why would you care if coins were in epoch-1 or epoch-2 if they perform the same exact function with the exact same underlying technology?
Every time it's been done, it's clearly an attempt by the developers to profit. Why else would one duplicate something, hardly change it, but attempt to pass it off as the original thing?
I mean technically in this case it's just another copy of the original thing no need/want to try and deceive people. In the long run all bitcoin will be lost. You could also parallelize transactions which I believe is still a problem in the cryptocurrency community.
As someone who casually bought a bunch of BTC in late 2013 just for fun and never really did anything with it since then, I think the salt mine of btc hater blog posts that come out every time there is a new spike in value are the comedy gold.
Did the same with some extra cash I had around but a bit later than you. I think one can trace some of the hate to simple sour grapes and jealousy. I’m also confused why one would wish an economic crash on anyone.
Network effects' power law nature, desire for a-political money, capital flowing into areas of least constraint & friction etc. seem to be just beginning.
People like Amy Castor, Peter Schiff, Nouriel Roubini, etc don't seem to fundamentally understand that intrinsic value is completely subjective and that bitcoin being a borderless, trustless, and scarce resource is what makes it valuable to many. Focusing on the negative aspects and neglecting the upsides of what cryptocurrencies have unlocked for millions of people worldwide is short-sighted.
I think the key things for Bitcoin are that it’s not forgeable and it’s transferable. Anything that satisfies those two conditions will eventually be used as a reliable store of value.
Have I stepped into an alternate dimension where any Bitcoin thread on hacker news is not dominated by discussion of whether or not bitcoin is a fraud or even needed?
Is this satire? The very first comment: "He believes the bitcoin ecosystem is running low on cash", is provably false since it is not just Tether that is increasing in MarketCap. USDC + PAX dollars have also increased in MarketCap to ~5 billion total now.
USDC and PAX are both regulated by US financial regulators, including NY.
There are plenty of ways to be skeptical of Bitcoin or Ethereum or rest of the Crypto, but this article is not it.
I do find it odd that Bitcoiners who tend to be incredibly, incredibly outspoken about Ending the Fed, and QE money printing, call any criticism of Tether as FUD in a cult manner, or shrug it off as non-issue. It was/is effectively a fractional reserve, where they admitted in court in the past that Tether wasn't completely backed by cash. It does seem a little convenient that they aren't ideologically consistent, and against Tether because it just so happens to help prop up the price of Bitcoin.
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[ 0.22 ms ] story [ 1576 ms ] threadhttps://www.youtube.com/watch?v=XbZ8zDpX2Mg
Related! A nice list of all the articles claiming bitcoin is dead and why. https://99bitcoins.com/bitcoin-obituaries/
Ethereum is also an absolutely fascinating technology.
Some people become “experts” and refuse to see innovation when it is staring themselves in the face. The world can’t change to these people.
Also regulation has been in the crypto space for years, dunno why these guys think it is some sudden new thing.
This is what life is like for the less privileged under the anti-money laundering regime:
https://www.reddit.com/r/MakerDAO/comments/de0sys/kyc_is_abs...
1. Engaging in human trafficking, which is really unfortunate for the poor and often non-white females who are being trafficked
2. Sponsoring terrorism, which sucks for the again young and often non-white females in schools that are being blown up, the women in markets getting shrapnel wounds, and the children losing parents
3. Funneling arms to terrorists, which allows them to resist police forces and continue forcing young people to be unwilling participants in the drug trade, prostitution and other pretty subpar life outcomes
So yes, it's really inconvient to have to deal with KYC and miss out on that sweet stock growth on foreign markets - I encourage your example to work with his local government to pass the appropriate laws to join the world economy.
3. That is also the argument the Chinese Communist Party makes for its various totalitarian surveillance/control measures in Xinxiang. Anyone with a basic respect for liberal democratic principles like privacy and presumption-of-innocence/due-process will reject warrantless mass-surveillance of financial transactions and the presumption of guilt inherent to disallowing individuals who haven't proven their innocence, by disclosing private information, from conducting certain classes of financial transactions.
>>So yes, it's really inconvient to have to deal with KYC and miss out on that sweet stock growth on foreign markets
That is incredibly daft. Individuals being able to generate/accumulate wealth has massive knock-on effects for the people around them and the countries they live in.
But here is a story about poor women of color who you seem more concerned about:
https://www.coindesk.com/money-reimagined-ugly-side-kyc-aml-...
>>At a 2015 blockchain event, Nairobi-based bitcoin pioneer Elizabeth Rossiello answered an audience question about the impact on Somalians of a recent shutdown in remittance inflows after the U.S. government had labeled the country a “high-risk jurisdiction.” The AZA Group CEO’s answer was blunt: “They starve.”
I guess just more collateral damage according to the insiders in the AML/KYC compliance sector.
>>I encourage your example to work with his local government to pass the appropriate laws to join the world economy.
Uzbekistan is an authoritarian state.
And until he can transform Uzbekistan into, first, a democratic state, and second, a compliant organ of the global AML mass-surveillance regime, it's okay for insiders like you that he is a global third class citizen. All of the poverty alleviation that being presumed innocent, instead treated like a suspect/criminal by your discriminatory policies, would bring about, will be conveniently dismissed by you.
Poverty existed literal millennia before KYC. Sure, it'd be great to just end poverty, and when you do that we can talk about ending KYC. Before you end poverty, it turns out it's pretty easy to implement KYC and stop a bunch of harms.
> That is also the argument the Chinese Communist Party makes for its various totalitarian surveillance...
There's a difference between putting a Muslim ethnic minority in concentration camps, and telling people they're supposed to identify themselves before wiring around tens of thousands of dollars internationally or opening foreign bank accounts. If that difference is lost on you, your issues run deeper than KYC.
> the impact on Somalians of a recent shutdown in remittance inflows...
The ideal fix here is for Somalia to stop funneling money to terrorist organizations.
> The report titled "Following the Money", authored by former UN Expert panellist for Somalia, Jay Bahadur, said illegal payments were as high as $3.7 million between 2014 and 2020... Amal was particularly accused of handling cash sent to Abdulrab Salem al-Hayashi, who was in October 2017 sanctioned by the US Treasury for "assisting in, sponsoring, or providing financial, material or technological support for, or financial or other services to or in support of" Al-Qaeda-linked terror groups in the Arabian Peninsula.
https://allafrica.com/stories/202010110025.html
And yeah, that sucks for the people who were just trying to survive, but that failure is entirely on Somalia and Amal who should of followed the required measures. Either follow the measures or you get expelled from the cooperative system.
It sucks to live in places like Somalia and Uzbekistan. I recommend leaving if you can, we have an international asylum process for a reason. It's not the duty of the US to help their citizens, nor is the US in a place to do so.
Maybe you're not understanding what I'm saying, because the above has absolutely no relevance to the point I made.
Another attempt:
Poverty declines faster when economies grow faster. The financial exclusion created by the crude AML/KYC surveillance/risk-management measures you're advocating harms economic development and thereby slows poverty eradication. This in turn slows the eradication of vices like human trafficking, which are largely an outgrowth of poverty.
>>There's a difference between putting a Muslim ethnic minority in concentration camps
Strawman. The Communist authorities who you are emulating do more than just put a Muslim ethnic minority in concentration camps. They also impose a mass-surveillance system on them.
https://www.hrw.org/video-photos/interactive/2019/05/02/chin...
They justify these invasions of privacy with the same kind of anti-terrorist rhetoric you're using. You're in the same ideological boat as them, and display the same callousness, which is characterized by comments like this:
>>And yeah, that sucks for the people who were just trying to survive, but that failure is entirely on Somalia and Amal
KYC goes against liberal democratic principles like privacy and due process, and should be opposed if you believe in these principles. It stands to reason that it does far more harm, in all respects, than good.
Human trafficking is not just a symptom of poverty, it's typically a symptom of a lack of law and order with strong systems that can deter human trafficking through a penal system. Giving human traffickers a bunch of cash isn't going to stop human trafficking.
> KYC goes against liberal democratic principles like privacy and due process
People in Somalia and Uzbekistan do not in any legal sense have privacy and due process. They do not live in Democratic regimes. Full stop. They have a moral right to those things, but it's on them to obtain it.
The US is not responsible for making sure non-citizens/non-residents have those rights. The US is not the gatekeeper of the world. The US is responsible for guarding it's citizens and residents - and there are KYC controls in the US that enable due process and privacy. Yes, if you're outside the US you don't get those protections but you never had them to begin with. You are welcome to come to the US or our allies and gain those things.
You can't force other people to transact with you. If we're freezing you out of an economic system because you keep giving money to extremists to kill women and children with, well, that just sucks to be you - you don't get to force us to trade with you. Take it up with your government.
It's obviously a result of multiple factors, but poverty is one of the major ones.
And law-and-order generally improves as economies develop. A law that excludes countless people from the mainstream financial system inhibits economic development.
>People in Somalia and Uzbekistan do not in any legal sense have privacy and due process.
They have some degree of privacy and due process, and the industry you are championing reduces that for them, using the US's dominant role in the global financial system as a pressure lever.
>You can't force other people to transact with you.
You're forcing people in the US to not transact with people in Somalia. You're not a libertarian here.
And AML/KYC laws violate privacy and due process rights domestically as well. It's not just international transactions that are affected by these laws. They are fundamentally laws that institute warrantless mass-surveillance.
>If we're freezing you out of an economic system because you keep giving money to extremists to kill women and children with, well, that just sucks to be yo
Once again, condemning people who have done no wrong, based something as crude as national association, and moreover, pretending you care about "women and children", while callously dismissing the devastating effect of financial exclusion caused by the policies that you are advocating remain-in/be-put-into effect, on millions of women children.
True or not, this argument is essentially orthogonal to Bitcoin's usefulness and success.
As others have pointed out, there are many financial institutions / instruments that also fit the bill and that does not diminish their utility.
To make the point maybe more salient: a moving vehicle can be used to kill a person, that doesn't mean cars should be eliminated.
However, I don’t really understand the distinction between Tether minting coins and people buying gold ETFs.
To remedy this, Tether now states USDT is backed 1 for 1 with cash and cash equivalents. For example, Tether released an "IOU" coin called UNUS SED LEO (LEO)[0] that trades at the amount of USD missing. Therefore Tether states it is now fully backed.
The veneer of sketchiness is actually preferable to a lot of crypto traders, who live in fear of various governments. This is why USDC is not as popular as USDT - many traders prefer a "vaguely sketchy" coin that is less likely to have their funds frozen by court order.
All that said, I worked at a company (Circle) that redeemed and minted billions of dollars of Tether back in 2017 / 2018. Tether serves big trade desks and is extremely popular in Asia, while USDC has become more popular in DeFi and is bigger in the west. Tether is not a giant ponzi scheme - it really has assets, and huge desks regularly mint and redeem billions of dollars.
[0] https://coinmarketcap.com/currencies/unus-sed-leo/
You don’t do all billions at once, that was in total.
http://www.tetherreport.com/
https://tonyarcieri.com/the-tether-conundrum
Much of that has to do with the way he expresses itself: he's really obnoxious to listen to and one has to make a great effort to get past that 100-foot wall of aggression to try and understand if there's any value in his arguments.
I have honestly tried, and once you peel off the tone and posturing, I must confess there isn't much to be found.
China also has a geopolitical incentive to promote crypto and counter the USD's current status as the reserve currency. The capability for the US to inject USD into itself while retaining a worldwide demand is undoubtedly at the forefront of China's mind.
The key complaint is that they are, in fact, NOT independent. You can use one to manipulate the other under the guise of being backed by USD when in reality its backed by loans backed by BTC (or some other permutation).
They so know because of bitcoin's stupendous price rise. And as the reasoning behind it they are pointing to Tether issuers' imminent facing of regulatory and criminal scrutiny.
I'm not so sure.
I'm a great supporter of Bitcoin, but:
I'd much prefer to see Bitcoin price be either stable in value or growing slowly.But the nature of the beast makes that proposition a difficult one until it reaches its "natural" capitalization (whatever that may be - some say that of gold).
https://youtu.be/Cg10yYZjK94?t=1h10m0s
This is the CEO of MicroStrategy who mainstreamed Bitcoin investment, saying stuff like:
Background from Wikipedia:He is frequently mentioned in Bitcoin discussions as evidence that Bitcoin is mainstream: a rational, safe investment, good enough for MicroStrategy to invest hundreds of millions
When you actually watch him talk, the credibility vanishes
This is greatly overstating his role and impact.
I'll go one step further and argue that some of the scenarios described in the article are not unreasonable.
What they fail to see is that if these actually come to pass (e.g. Tether collapse), it will actually good for Bitcoin in the long run.
Money badger don't care.
That's their PR message, not their goal. They were pretty clearly social attacks trying to coopt the name.
USDC and PAX are both regulated by US financial regulators, including NY.
There are plenty of ways to be skeptical of Bitcoin or Ethereum or rest of the Crypto, but this article is not it.