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Bitcoin

The World's Most-Used Cryptocurrency Isn't Bitcoin (bloomberg.com) 61

Posted by msmash from the closer-look dept.
What's the world's most widely used cryptocurrency? If you think it's Bitcoin, which accounts for about 70% of all the digital-asset world's market value, you're probably wrong. From a report: While concrete figures on trading volumes are hard to come by in this often murky corner of finance, data from CoinMarketCap.com show that the token with the highest daily and monthly trading volume is Tether, whose market capitalization is more than 30 times smaller. Tether's volume surpassed that of Bitcoin's for the first time in April and has consistently exceeded it since early August at about $21 billion per day, the data provider says.

With Tether's monthly trading volume about 18% higher than that of Bitcoin, it's arguably the most important coin in the crypto ecosystem. Tether's also one of the main reasons why regulators regard cryptocurrencies with a wary eye, and have put the breaks on crypto exchange-traded funds amid concern of market manipulation. "If there is no Tether, we lose a massive amount of daily volume -- around $1 billion or more depending on the data source," said Lex Sokolin, global financial technology co-head at ConsenSys, which offers blockchain technology. "Some of the concerning potential patters of trading in the market may start to fall away."
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The World's Most-Used Cryptocurrency Isn't Bitcoin More

The World's Most-Used Cryptocurrency Isn't Bitcoin

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  • Of course it's Tether (Score:1)

    by Anonymous Coward

    There's probably half of the crypto-currencies that run on the Tether network itself. So people aren't trading Tether, they're trading those other cryptos and it just increases the number of transactions on the Tether network. So it's not amazing or surprising that Tether is "used" more than Bitcoin.

    That's like saying HTTP is used more than the U.S. dollar.

    • There is no Tether network, Tether runs on other networks.

      First it was OMNI-powered on Bitcoin, then they issued an ERC20 token, there's also a Tether-Liquid issuance.

  • bitcoin architecture is too bottlenecked and illiquid to be used as "money", sometimes more than a day for transaction to clear under high load. Even the average of somewhat less than ten minutes is too damn long

    • You're thinking of Blockstream's Core fork of Bitcoin using a technology called Segwit that makes it not Bitcoin (see: https://youtu.be/VoFb3mcxluY [youtu.be] )

      They've convinced centralized exchanges to have Bitcoin's old ticker but the chain-of-signatures crypto that goes back to Satoshi's genesis block is now known as Bitcoin Cash (peer-to-peer digital) and trades under BCH. The old cypherpunk community continues to evolve it there and it has plenty of capacity and now token support with atomic swaps, so it could e

    • You are confusing Bitcoin with a payment system. BCASH is the definitive proof that forking Bitcoin in a pure paypal like system produces a worthless token, and a worthless network. The Bitcoin (BTC) value proposition lies at the stock to flow ratio level. This is the same property used to define the scarcity of Gold. Bitcoin is a protocol, nobody can undermine any of its properties. And running a Bitcoin full validating node is the ultimate way to protect the network. Lightning is the payment layer of Bi

      • Bitcoin is a protocol, nobody can undermine any of its properties.

        I assume by this statement you are ignoring 51% attacks, which are baked into the very nature of the protocol, and therefore anyone who pulls off a 51% attack has not technically "undermined" the protocol, merely taken advantage of one of its gaping flaws?

        • Indeed, a 51% against Bitcoin is very easy, you just have to rent the power capacity of a country like Switzerland for a few weeks, and at the same time buy, or manufacture the hardware. You may hope that your hardware will be as efficient as the hardware already available on the market. Easy! A country trying to disrupt Bitcoin can already end broke!

      • The very algorithms bitcoin specifically uses and its structure are its bottlenecks, it has design flaws. That's what harms its value, makes it illiquid, makes it unsuitable as money

  • Reserve (Score:3)

    by jythie ( 914043 ) on Friday October 04, 2019 @12:27PM (#59270076)
    So, if I am understanding this correctly, Tether is heavily traded because a bunch of exchanges are using it as their reserve currency instead of USD in order to get around regulations, and Tether itself is backed in USD by a single private company? It is like we have gone back 400 years, but I guess with the massive success of central banks I could see people hoping to duplicate their success, or at least their profits.

    • Re:Reserve (Score:5, Informative)

      by h4ck7h3p14n37 ( 926070 ) on Friday October 04, 2019 @12:45PM (#59270110) Homepage

      This article [coindesk.com] explains what's going on with Tether.

      Chinese importers in Russia are buying up to $30 million a day of tether (USDT) from Moscow’s over-the-counter trading desks.

      They use the cryptocurrency to send large sums back to their home country, which has strict capital controls. Previously the merchants used bitcoin for this, but when the market crashed in 2018 they switched to tether, which is designed to maintain parity with the U.S. dollar.

      Despite longstanding questions about USDT’s collateral, in this market “nobody actually cares if tether is backed or not,” says one Moscow trader.

    • Thanks for doing Slashdot Editor's job for them.

    • Well, Tether says they have a reserve of dollars, but they've never submitted to a public audit, and earlier this year, they admitted that some $850 million of their reserve has gone missing (https://www.theblockcrypto.com/post/20978/ny-attorney-general-sues-bitfinex-and-tether) and that their reserve is not just dollars but "may include other assets and receivables from loans made by Tether to third parties" (https://www.marketwatch.com/story/tether-reverses-claim-of-100-dollar-backing-sparking-criticism-2

    • tether has a fixed value so it's a better reserve currency and a better transfer currency. If bitcoin is trending down (or trending up) then one party is always losing a small fraction before they can convert it to a stable currency.

      I note that while it's normal to think about market cap it is an illusion both for Bitcoin and for Real US dollars.

      that is in principle, it's possible to make a cryto currency whose entire market cap is $1. If you can make the exchange velocity trend towards 1 trillion trades

  • Trading volume? (Score:3)

    by ardmhacha ( 192482 ) on Friday October 04, 2019 @12:35PM (#59270088)

    Is that real use or just speculators trading it back and forth?

    • That isn't actually relevant. In economic theory the trading volume itself is what provides price stability as ultimately it is nothing more than changing currency hands for what someone thinks it is worth regardless of if that worth is derived from something tangible or something linked to a service.

      And yes it's speculative trading back and forth between exchanges.

      • ...what a perfectly spherical horse on a sinusoidal path is to a galopping horse.

        Actually, it's worse. It is a hyperbolic paraboloid made of antimatter plasma going backwards in time inside a black hole where time and space are reversed.

        In other words: More the opposite of reality than anything.

        • That would be true if you wrote the exact opposite of what you wrote. Economic theory pretty much perfectly models the real world since it is directly reverse engineered to explain what is going on.

          The fact you think otherwise points to your understanding of it than the theory itself.

    • Re:Trading volume? (Score:4, Interesting)

      by theskipper ( 461997 ) on Friday October 04, 2019 @01:00PM (#59270164)

      No and kind of. The deeper story is what matters. It's a "stable coin" which means that it's supposed to have a 1:1 backing of fiat currency. The problem is that the foundation is not willing to be officially audited to see if the cash is actually there for full backing, lots of smoke and mirrors. The concept is that as each tether is printed, that supposedly means that someone has actually handed over the equivalent amount of fiat to their irl bank account. But anyone who thinks that folks are handing over $50m in cash for every $50m in equivalent tethers to some unaudited offshore operation needs to have their head examined imo.

      This has been going on for years, follow @bitfinexed if you're curious, he's one of the original guys who caught onto this, and has been unraveling the story for quite a while.

      Btw, if you want to make money trading btc simply watch when the tethers are printed. Within 24 hours they'll be used on the exchanges to pump up the price of btc. Then dump before the effect fades, or hold on if they print more.

      • They have a 3 Billion dollar market cap and at least 1 Billion of that is real, because market cap dropped by that much last year and the price didn't crash.

        It's perfectly possible they gambled with reserves or had them stolen ... but it's frankly silly to believe they sell Tether below cost, you couldn't do that for Billions of dollars and keep it a secret.

    • Re: (Score:2)

      by jrumney ( 197329 )

      There doesn't appear to be much point in speculation with Tether, as the point of it is that its value is tethered to the USD. So most likely real use; as someone else said in the comments above, Chinese import/export companies using it to get around their country's currency controls to get their money quicker and avoid a bunch of paperwork.

  • Does anybody else have a hard time parsing "30 times smaller?" When I read that, I think, "What is the unit that is being multiplied by 30?"

    Or is it just me?

    • Or is it just me?

      It's just you. The rest of us have not problem putting the "thirty times" in the denominator when reading the word "smaller".

      • Or is it just me?

        It's just you. The rest of us have not problem putting the "thirty times" in the denominator when reading the word "smaller".

        Okay, so to be clear, "One times smaller" would mean the same size?

        • Re: (Score:2)

          by DRJlaw ( 946416 )

          Okay, so to be clear, "One times smaller" would mean the same size?

          Yes, which is why nobody uses that expression, or "one times larger," either. If you haven't figured out that the expression is a ratio and "direction," i.e., which member of the ordered pair you mentioned in the first part of the comparison, you've been actively deceiving yourself.

          It's colloquial English, not a mathematical equation.

        • Indeed.

    • Re: (Score:2, Informative)

      by fred6666 ( 4718031 )

      Yes it's just you. It's a common way to express that you need to divide the value by 30.

      • Yes it's just you. It's a common way to express that you need to divide the value by 30.

        So two times larger means I multiply by (2/1)? Or does two times larger mean it is larger by two times? Because at face value the second makes much more sense, but is inconsistent with what you are saying.

        • Two times larger means you multiply by 2, exactly. Like it or not, that's how people speak in English.

    • It was "more than 30 times smaller", which is even worse. The value you started with is technically "more" than "30 times smaller" of itself. "Times smaller" is painful to read but mostly quantifiable, whereas "More" than anything just throws all sort of measurability right out the window.

      • Re: (Score:2)

        by DRJlaw ( 946416 )

        It was "more than 30 times smaller", which is even worse. The value you started with is technically "more" than "30 times smaller" of itself. "Times smaller" is painful to read but mostly quantifiable, whereas "More" than anything just throws all sort of measurability right out the window.

        (more than 30) times smaller.

        You're not improving your image by claiming that you cannot figure that out.

        • If you honestly think we can't figure out what they are trying to convey here, you are the fool. The issue at hand is that these people make a living using the English language as their main tool, and they're failing at it. Miserably. I can sometimes barely form a complete sentence, but even I can muster out a "one thirtieth the size of", or even an "about three percent of". Using addition (more), multiplication (times), and subtraction (smaller) to describe a division operation (1/30) is just unacceptable

          • Re: (Score:1)

            by bn-7bc ( 909819 )
            While i understand 30 times smaller, I find 1/30th to be a better way to express it. You could ofc also say 3.3% (ignoring the languages that use . As a thousannd separator here) actually the persentage is tather better as most eople hve a good grasp og what persetages mean ( maybe not when it comes to compound interest, but I digress)

        • (more than 30) times smaller.

          You're not improving your image by claiming that you cannot figure that out.

          It's not that I cannot figure it out, it is that it leads to ambiguity. To illustrate, define the following:

          Two times as large
          Two times larger
          200% larger

          According to the formula I was given above, where "30 times smaller" means you multiply the original by 1/30, two times larger should be the same as twice as large, but it makes much more sense to strictly interpret it as three times as large--that is, it is larger by two times.

          • Re: (Score:2)

            by DRJlaw ( 946416 )

            According to the formula I was given above, where "30 times smaller" means you multiply the original by 1/30, two times larger should be the same as twice as large, but it makes much more sense to strictly interpret it as three times as large--that is, it is larger by two times.

            Yet the consensus is that it means twice as large, and it makes much more sense to use the consensus meaning than to insist that you must "strictly interpret it" so as to intentionally misunderstand a colloquialism.

            The case has been [wordcourt.com]

          • Re: (Score:2)

            by pjt33 ( 739471 )

            To reinforce your point, 200% larger means 3 times as large in a maths exam, but 2 times as large most of the times you see it in a news article.

      • No idea about what you are nitpicking.
        English is not the only language where people say "x times smaller" and it means in every language the same: divide by x.
        Are you a kind of asperger?

    • It's not just you.

      "30 times smaller" means "negative 29 times the size".

  • As long as the currency does not represent a fixed amount of labor, it is no better than anything we had, before computers even existed.

    No, "mining" does not count as work, but is exactly the problem!
    Only real work by a human (or other lifeform), counts.
    (And for that we first have to find a better system than "whatever I can squeeze out of my victim". Something based on skill and actual effort, to multiply by the time taken. And as far as I can tell, we don't have a fair way of measuring that for one-off la

  • https://bitcoinist.com/blockch... [bitcoinist.com]

    Also, Tether is a pseudocryptocurrency (centrally controlled) and shouldn't be lumped in with true cryptocurrencies.

  • Tether was created for the sole purpose of being able to trade real cryptocurrencies without using the traditional banking channels, e.g. SWIFT and all the issues related to KYC.

    Tether is printed. One Tether is supposed to be pegged to exactly one US dollar. Tether can't be stored on your PC outside of exchanges.

    Tether is not a cryptocurrency. Tether is a dubious substitute for the US dollar - dubious because it's never been proven that you can exchange all the Tethers back to US dollars and it's been r

  • Unlike Bitcoin, Tether has a money supply that continually increases on what is supposed to be a managed basis as its trading basis increases. This makes it usable as a currency, because its value is not being kicked around by hoarders. So it's a stablecoin, right?

    Not quite, apparently. Because its money supply is not strictly tied to a given fiat(national currency) or basket of fiats like Libra, by a mathematical relationship, Tether's backers are subject to the same problem as fiat currencies, an irresist

    • As of this spring, Tether is 74% backed by fiats.

      Actually, since there's never been an actual complete, independent audit, nobody has any idea how much fiat is actually backing Tether. There's a very good possibility there isn't much at all.

  • What's happening is Tether is the actual "currency" and Bitcoin is an investment security. Tether is just a placeholder for USD technically. But Bitcoin is now not actually used as a currency. Due to its volatile nature, instability and deflationary design, it's not suitable to be used as a common exchange of value. So people are holding into BTC and trading for it with Tether.

    Aside from that, crypto is all part of a larger pyramid-like ecosystem [bsalert.com] that should be viewed with extreme skepticism. There's

    • Money with unconstrained supply, and operating with negative yield bonds. Is this an improvement of the defunct Gold standard, or just a game to transfer wealth away from common people? Bitcoin as a genuine decentralized protocol, protected from all possible angle of attacks, internal or external is the only real thing in the 'crypto' world. Bitcoin is not a security, and you are free to never own it. Bitcoin is stronger and stronger year after year, and the price will follow.
  • We have thousands of years of history of people trading metals or coins and we just can't stop. Now we are trading e-money to try to get an edge on others. We simply can not grasp the idea of not making a profit on making trades.
  • Hard money censorship resistant value transfer vs simple digital currency. Bitcoin will have a higher stock to flow ratio than Gold in the years to come. Do you really want to hodl a random digital currency and not Bitcoin?

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