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Right, its been the argument for the past year in the crypto space, and this is because of a lack of transparency from Bitfinex, which is the right move for Bit

Right, its been the argument for the past year in the crypto space, and this is because of a lack of transparency from Bitfinex, which is the right move for Bitfinex. Many people are just assuming the worse, as they have no proof for the best case or the worst case. Every OTC desk I talk to always brags about how much demand there is for large buy orders, especially during the dips. If Bitfinex's Tether works as created, then any surge in demand will result in new tether's being created, this is the only way Tether can sustain it's peg. IF current cryptocurrency owners are storing value in Tether so they they don't lose money, then more Tether's should be printed. ELSE IF new cryptocurrency buyers are sending fiat to Bitfinex and get Tether, then new Tether should be printed The main gotcha is that no Tether's have been destroyed, to my knowledge. And this is from just looking at the OMNI Tether asset on Bitcoin's blockchain. But has demand for Tether ever really dropped?

Nursie 8y ago
> IF current cryptocurrency owners are storing value in Tether so they they don't lose money, then more Tether's should be printed. Why ? Tether is supposed to be printed when (and only when) new dollars are given directly to them. If cryptocurrency owners want to store value in tethers, they must buy existing tethers with their cryptocurrency. That's how this is supposed to work. If more tethers are printed to fulfil demand for tether by people wanting to sell cryptocurrency, then the peg they claim to have (1:1 backing) is a lie.
- deltateam 8y ago
  okay, then for your case only the ELSE IF is important.
  - Nursie 8y ago
    For my case? Do you not mean "for the claims made by tether on their homepage to be true"?
    - deltateam 8y ago
      no, not really Tether can already exist and be in circulation and people can be willing to buy it at a higher price from existing holders. In this event, Bitfinex/Tether needs to be willing to create more Tether, diluting the current supply to offset the greater demand and keep the peg. To me, it isn't important that "each Tether is backed by USD [in their bank account]", but they may accomplish it that way for consistency anyway. Each Tether is still backed by a notional value and was exchanged for such. Their willingness to do this could help arbitrageurs try to front run and sell their own Tether when a premium exists.
      - Nursie 8y ago
        > diluting the current supply to offset the greater demand and keep the peg. Their peg is created explicitly by being 1:1, not by manipulating their supply. This is how they create trust that they aren't subject to market conditions or threatened by a run on redeeming their tokens. To you it may not be important, but it's right there as a bold claim on their home page, and it's why they've been used. Note that I did not say that their peg could not conceivably work without 1:1 backing, I said that their claims would be a lie. As are their claims to have been subject to frequent audits - they've never completed a single one.
- Jtsummers 8y ago
  From the Tether FAQ: > The Tether Platform is fully reserved when the sum of all tethers in circulation is less than or equal to the balance of fiat currency held in our reserve. That is to say, they offer no guarantee that 100% of USDT in circulation are backed by USD at any given moment.
  - ceejayoz 8y ago
    On the home page at https://tether.to/ https://tether.to/, it states: > Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD.
  - zaroth 8y ago
    Not that I would trust them, but literally the next sentence; Through our Transparency [1] page, anyone can view both of these numbers in near real-time. [1] - https://wallet.tether.to/transparency https://wallet.tether.to/transparency
    - FireBeyond 8y ago
      And right beneath that, "Our reserve account is regularly audited". By whom? Where can anyone see these audits, for transparency's sake?
      - Animats 8y ago
        Tether fired their auditor for asking too many questions.[1] [1] https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved/ https://www.coindesk.com/tether-confirms-relationship-audito...
        FireBeyond 8y ago
        Tether fired their auditor for _wanting to conduct an audit_, and not being willing to "rubber stamp these bank statements for us and call it good".
  - 8y ago

Nursie 8y ago

> IF current cryptocurrency owners are storing value in Tether so they they don't lose money, then more Tether's should be printed. Why ? Tether is supposed to be printed when (and only when) new dollars are given directly to them. If cryptocurrency owners want to store value in tethers, they must buy existing tethers with their cryptocurrency. That's how this is supposed to work. If more tethers are printed to fulfil demand for tether by people wanting to sell cryptocurrency, then the peg they claim to have (1:1 backing) is a lie.

deltateam 8y ago
okay, then for your case only the ELSE IF is important.
- Nursie 8y ago
  For my case? Do you not mean "for the claims made by tether on their homepage to be true"?
  - deltateam 8y ago
    no, not really Tether can already exist and be in circulation and people can be willing to buy it at a higher price from existing holders. In this event, Bitfinex/Tether needs to be willing to create more Tether, diluting the current supply to offset the greater demand and keep the peg. To me, it isn't important that "each Tether is backed by USD [in their bank account]", but they may accomplish it that way for consistency anyway. Each Tether is still backed by a notional value and was exchanged for such. Their willingness to do this could help arbitrageurs try to front run and sell their own Tether when a premium exists.
    - Nursie 8y ago
      > diluting the current supply to offset the greater demand and keep the peg. Their peg is created explicitly by being 1:1, not by manipulating their supply. This is how they create trust that they aren't subject to market conditions or threatened by a run on redeeming their tokens. To you it may not be important, but it's right there as a bold claim on their home page, and it's why they've been used. Note that I did not say that their peg could not conceivably work without 1:1 backing, I said that their claims would be a lie. As are their claims to have been subject to frequent audits - they've never completed a single one.
Jtsummers 8y ago
From the Tether FAQ: > The Tether Platform is fully reserved when the sum of all tethers in circulation is less than or equal to the balance of fiat currency held in our reserve. That is to say, they offer no guarantee that 100% of USDT in circulation are backed by USD at any given moment.
- ceejayoz 8y ago
  On the home page at https://tether.to/ https://tether.to/, it states: > Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD.
- zaroth 8y ago
  Not that I would trust them, but literally the next sentence; Through our Transparency [1] page, anyone can view both of these numbers in near real-time. [1] - https://wallet.tether.to/transparency https://wallet.tether.to/transparency
  - FireBeyond 8y ago
    And right beneath that, "Our reserve account is regularly audited". By whom? Where can anyone see these audits, for transparency's sake?
    - Animats 8y ago
      Tether fired their auditor for asking too many questions.[1] [1] https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved/ https://www.coindesk.com/tether-confirms-relationship-audito...
      - FireBeyond 8y ago
        Tether fired their auditor for _wanting to conduct an audit_, and not being willing to "rubber stamp these bank statements for us and call it good".
- 8y ago