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Yeah. Their TOS says that they're under no obligation of giving you dollars in exchange for tethers. In fact, no one has ever redeemed a single tether and there

Yeah. Their TOS says that they're under no obligation of giving you dollars in exchange for tethers. In fact, no one has ever redeemed a single tether and there is no process in place to actually do it. Why people believe that 1 USDT = 1 USD is beyond me.

philipov 9y ago
> Why people believe that 1 USDT = 1 USD is beyond me. I imagine it's because Tether has an effective PR team.
encoderer 9y ago
My understanding is that tether exists so you can sell your alt-coin position to something resembling USD in volatility, vs selling them for btc. You can use USDT to buy ETH or BTC, and thats enables liquidity to USD fairly easily. I'm not defending Tether, I'm just pointing this out because your comment makes it sound to me like a trap that nobody has gotten any value out of.
- brokensegue 9y ago
  lots of people get value out of ponzi schemes too (until they don't)
  - encoderer 9y ago
    Not the point. Why not just play straight with the facts? Nobody ever has to be able to redeem for dollars as long as exchanges keep making markets with usdt. I have no position in tether, haven’t used it, just interested in cutting thru misinformation.
    - brokensegue 9y ago
      the exchanges aren't the ones tasked with defending the peg though.
gruez 9y ago
>In fact, no one has ever redeemed a single tether and there is no process in place to actually do it. It's called withdrawing at any of the exchanges that support tether.
- rspeer 9y ago
  Can you actually "withdraw" Tether as dollars at these exchanges? Or can you just pass the buck by trading Tether for other cryptocurrencies?
  - orthecreedence 9y ago
    You cannot withdraw Tether. You can only trade it for something else on an exchange. Tether does not actually let you convert USDT -> USD. I wonder why.
    - gruez 9y ago
      Presumably you can. I personally do not have accounts at any USDT exchanges, so I can't personally verify that fact. Even if all of the USDT exchange don't accept USD withdraws (which itself is unlikely because nobody would provide sell volume to them), at the very least you can trade them for "real" USD on kraken (at a few percent discount).
      - ceejayoz 9y ago
        > at the very least you can trade them for "real" USD on kraken (at a few percent discount) For now. If faith in Tether collapses, no one will trade USD for that "few percent" discount anymore.
      - rspeer 9y ago
        You say "presumably you can", but according to David Gerard, there is no evidence that anyone has redeemed Tether. Only people presuming that they could if they wanted to, or people who heard of someone who heard of someone who did it. The surprising fact is that people do buy and sell on exchanges that have no access to real money. Trading Tether for USD on Kraken is different, and is the topic of this thread. Given that Tether cannot be redeemed, its price is free to fall as soon as traders on Kraken lose faith -- which, given that Tether has essentially failed an audit, may be happening.

philipov 9y ago

> Why people believe that 1 USDT = 1 USD is beyond me. I imagine it's because Tether has an effective PR team.

encoderer 9y ago

My understanding is that tether exists so you can sell your alt-coin position to something resembling USD in volatility, vs selling them for btc. You can use USDT to buy ETH or BTC, and thats enables liquidity to USD fairly easily. I'm not defending Tether, I'm just pointing this out because your comment makes it sound to me like a trap that nobody has gotten any value out of.

brokensegue 9y ago
lots of people get value out of ponzi schemes too (until they don't)
- encoderer 9y ago
  Not the point. Why not just play straight with the facts? Nobody ever has to be able to redeem for dollars as long as exchanges keep making markets with usdt. I have no position in tether, haven’t used it, just interested in cutting thru misinformation.
  - brokensegue 9y ago
    the exchanges aren't the ones tasked with defending the peg though.

gruez 9y ago

>In fact, no one has ever redeemed a single tether and there is no process in place to actually do it. It's called withdrawing at any of the exchanges that support tether.

rspeer 9y ago
Can you actually "withdraw" Tether as dollars at these exchanges? Or can you just pass the buck by trading Tether for other cryptocurrencies?
- orthecreedence 9y ago
  You cannot withdraw Tether. You can only trade it for something else on an exchange. Tether does not actually let you convert USDT -> USD. I wonder why.
  - gruez 9y ago
    Presumably you can. I personally do not have accounts at any USDT exchanges, so I can't personally verify that fact. Even if all of the USDT exchange don't accept USD withdraws (which itself is unlikely because nobody would provide sell volume to them), at the very least you can trade them for "real" USD on kraken (at a few percent discount).
    - ceejayoz 9y ago
      > at the very least you can trade them for "real" USD on kraken (at a few percent discount) For now. If faith in Tether collapses, no one will trade USD for that "few percent" discount anymore.
    - rspeer 9y ago
      You say "presumably you can", but according to David Gerard, there is no evidence that anyone has redeemed Tether. Only people presuming that they could if they wanted to, or people who heard of someone who heard of someone who did it. The surprising fact is that people do buy and sell on exchanges that have no access to real money. Trading Tether for USD on Kraken is different, and is the topic of this thread. Given that Tether cannot be redeemed, its price is free to fall as soon as traders on Kraken lose faith -- which, given that Tether has essentially failed an audit, may be happening.