[Cryptography] The Bit Short: Inside Crypto’s Doomsday Machine

jrzx jrzx at protonmail.ch
Sat Jan 16 03:09:27 EST 2021


> https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3
>
> TL;DR: Bitcoin prices are being propped up by Tether, which is a blatant fraud. The house of cards should come tumbling down real soon now.

Tether will vanish very soon. And a lot of bitcoin trades are conducted using tether, because a lot of crypto exchanges are disconnected from the US banking system. The collapse of Tether will cut the connection of those exchanges to the US dollar, and cause a lot of crypto speculators to become suddenly poorer, and thus less inclined, and less able, to invest in bitcoin.

Which is likely to be very bad for the price of bitcoin.

On the other hand, tether provides an efficient way to route around an increasingly dysfunctional US banking system. When it vanishes, we will be left with bitcoin and the Kuwaiti Dinar as the major bypass roads, which will be good for bitcoin (and the Kuwaiti Dinar)

If demand for bitcoin is driven by speculative madness, the collapse of Tether is likely to be devastating. If demand for bitcoin is driven by the rapidly increasing dysfunction of the government system of accounting and moving value, the collapse of Tether is going to be not too bad in the short run, and pretty good in the long run.

The collapse of Tether will provide an illuminating test of the real value of crypto currency.
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