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On page 4/5 this presentation says: >this might not be true of a sufficiently credible Tether-like stablecoin whose value is pegged to a fiat currency, but ther

On page 4/5 this presentation says: >this might not be true of a sufficiently credible Tether-like stablecoin whose value is pegged to a fiat currency, but there the crypto is piggybacking on the effectiveness of the fiat. I was intrigued by this Tether thing and ended up on the site: https://tether.to/ https://tether.to/ It says: > Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD. > Our reserve holdings are published daily and subject to frequent professional audits. All tethers in circulation always match our reserves. A nitpick I have on the site design is that nowadays sites don't put sitemap in the footer. So I have to difficult time finding the balance page: https://wallet.tether.to/transparency https://wallet.tether.to/transparency Can someone help me make sense of this? I thought the numbers are there for the claimed 1-to-1 USD reserve but that doesn't seem to be the case. The value there is from the assets issued on blockchain and not the USD balance on company's book. Secondly, I might be wrong but can't seem to find who is conducting the audit. Is it one of the big 4 or some home office? If it is a small time office I will be even more skeptical of this whole thing.

cryptodogemoon 9y ago
Tether and it's sister company, Bitfinex have had a long history of extremely suspicious and opaque behavior. The CEO has been quoted as sympathetic towards a known ponzi scheme after it vanished with everyone's deposits. https://steemit.com/bitfinex/@gaitan/bitfinex-ceo-suspected-of-a-ponzi-scheme https://steemit.com/bitfinex/@gaitan/bitfinex-ceo-suspected-... Raphaelle Nicole, the CEO of Bitfinex invested in the past years in a number of ponzi schemes and also supported Trendon Shavers, who was found guilty recently for "a classic ponzi scheme" and was sentenced to 18 months in prison. In 2012, Raphaelle tried his own ponzi scheme: “When I need more coins than I have to fill an order, I will ask everyone that previously “registered” with me to lend me some btc. After 7 days, I will return all of it, principal + 2% interests [per week]…. Now the questions you might have: What could you do to make so much profit? Let just say that I do “arbitrage”: I buy low and sell high.” Here is the summary of Tether: https://www.reddit.com/r/btc/comments/6xpddt/as_20m_more_tether_are_issued_today_i_think_its/ https://www.reddit.com/r/btc/comments/6xpddt/as_20m_more_tet... https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest https://twitter.com/Bitfinexed https://twitter.com/Bitfinexed https://www.reddit.com/r/btc/comments/7059hr/more_25_million_tethers_generated_today/ https://www.reddit.com/r/btc/comments/7059hr/more_25_million...
mbrock 9y ago
You, and everyone else, ought to be very skeptical. A peg like Tether isn't any kind of guarantee. It's so easy to imagine the insolvency of such a firm through government action, fraud, bank seizures, or a juicy combination of all three. https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87 https://hackernoon.com/the-curious-tale-of-tethers-6b0031eea... Having the private keys that controls a Tether token is not at all like owning a US dollar. That's why their legal policy states: Once you have Tethers, you can trade them, keep them, or use them to pay persons that will accept your Tethers. However, Tethers are not money and are not monetary instruments. They are also not stored value or currency. There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. I don't think a centralized and fragile thing like Tether deserves to be called a stablecoin. We should reserve that concept for a decentralized and resilient collateralized token issuance system...
psandersen 9y ago
Just checked the page, does Tether really have $437,346,130.08 USD? Site just doesn't look like what you'd expect from something that big, doesn't feel right.
Laforet 9y ago
Tether was allegedly created by Bitfinex to raise capital after the latter was hacked last year and had to find money to reimburse the customers. In April, Bitfinex was cut off from the US banking system and to this day it had no means to send and receive USD. The supply of tether has expanded 12x under suspicious circumstances* to ensure Bitfinex will have some form of liquidity, without which they would have ended up like MtGox already. *: There is zero evidence to suggest the tokens are backed by fiat. Nor have I come across anybody who came forward with evidence that they have managed to redeem tethers for fiat.

cryptodogemoon 9y ago

Tether and it's sister company, Bitfinex have had a long history of extremely suspicious and opaque behavior. The CEO has been quoted as sympathetic towards a known ponzi scheme after it vanished with everyone's deposits. https://steemit.com/bitfinex/@gaitan/bitfinex-ceo-suspected-of-a-ponzi-scheme https://steemit.com/bitfinex/@gaitan/bitfinex-ceo-suspected-... Raphaelle Nicole, the CEO of Bitfinex invested in the past years in a number of ponzi schemes and also supported Trendon Shavers, who was found guilty recently for "a classic ponzi scheme" and was sentenced to 18 months in prison. In 2012, Raphaelle tried his own ponzi scheme: “When I need more coins than I have to fill an order, I will ask everyone that previously “registered” with me to lend me some btc. After 7 days, I will return all of it, principal + 2% interests [per week]…. Now the questions you might have: What could you do to make so much profit? Let just say that I do “arbitrage”: I buy low and sell high.” Here is the summary of Tether: https://www.reddit.com/r/btc/comments/6xpddt/as_20m_more_tether_are_issued_today_i_think_its/ https://www.reddit.com/r/btc/comments/6xpddt/as_20m_more_tet... https://medium.com/@bitfinexed/latest https://medium.com/@bitfinexed/latest https://twitter.com/Bitfinexed https://twitter.com/Bitfinexed https://www.reddit.com/r/btc/comments/7059hr/more_25_million_tethers_generated_today/ https://www.reddit.com/r/btc/comments/7059hr/more_25_million...

mbrock 9y ago

You, and everyone else, ought to be very skeptical. A peg like Tether isn't any kind of guarantee. It's so easy to imagine the insolvency of such a firm through government action, fraud, bank seizures, or a juicy combination of all three. https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87 https://hackernoon.com/the-curious-tale-of-tethers-6b0031eea... Having the private keys that controls a Tether token is not at all like owning a US dollar. That's why their legal policy states: Once you have Tethers, you can trade them, keep them, or use them to pay persons that will accept your Tethers. However, Tethers are not money and are not monetary instruments. They are also not stored value or currency. There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. I don't think a centralized and fragile thing like Tether deserves to be called a stablecoin. We should reserve that concept for a decentralized and resilient collateralized token issuance system...

psandersen 9y ago

Just checked the page, does Tether really have $437,346,130.08 USD? Site just doesn't look like what you'd expect from something that big, doesn't feel right.

Laforet 9y ago

Tether was allegedly created by Bitfinex to raise capital after the latter was hacked last year and had to find money to reimburse the customers. In April, Bitfinex was cut off from the US banking system and to this day it had no means to send and receive USD. The supply of tether has expanded 12x under suspicious circumstances* to ensure Bitfinex will have some form of liquidity, without which they would have ended up like MtGox already. *: There is zero evidence to suggest the tokens are backed by fiat. Nor have I come across anybody who came forward with evidence that they have managed to redeem tethers for fiat.