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> there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will Can you explain? What's the exchange? How do
by tome 9y ago
> there's an exchange printing billions of dollars of unbacked tokens they can use to drive up the price at will
Can you explain? What's the exchange? How do they print Bitcoin (I presume that's what you mean by "tokens")? How does that drive the price up rather than down?
- gthtjtkt 9y agoThe token is called "Tether" and it's run by the Bitfinex exchange. It's supposed to be backed by US dollars, but they've refused to release any third-party audits to support that statement and it says this on their website: "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. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers." So, basically, it's Monopoly money. Bloomberg recently did a story on it: https://www.bloomberg.com/amp/news/articles/2017-12-05/mystery-shrouds-tether-and-its-links-to-biggest-bitcoin-exchange https://www.bloomberg.com/amp/news/articles/2017-12-05/myste...
- klipt 9y agoAnd the market cap is over a billion! I wish I could print a billion in monopoly money and exchange it 1:1 for real dollars... https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
- tome 9y agoAh, so we're into fractional reserve territory. Never mind, I hear there are cryptocurrencies that will save us from that.
- klipt 9y agoOf course, there's SeriouslyGuysUseThisLimitedCoinOnlyNoOtherCoinsCoin.
- jcoffland 9y agoThat is not how market caps work. No one can exchange all the Tethers for the market cap in USD.
- klipt 9y agoNo, I'm saying the market cap is the number of tethers that tether.to has printed so far.
- ufo 9y agoTo be fair, no one can exchange Tethers for any amount of USD. Bitfinex and all other Tether-using exchanges only allow people to cash out with Bitcoins. (Instead of the weakness of tethers being reflected in lower prices, it is reflected by inflated the tether-denominated prices for Bitcoin inside Bitfinex)