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Fractional reserve banking has the same problem, yet provides a real, functional purpose for finance. Tether has a purpose - to be a savings account is not tha
by teknopurge 7y ago
Fractional reserve banking has the same problem, yet provides a real, functional purpose for finance.
Tether has a purpose - to be a savings account is not that purpose.
- gamblor956 7y agoYou can exchange your bank savings account for dollars (or Euro, or whatever). Hundreds of millions of people do this every day around the world without issue, because this is a solved problem.
- teknopurge 7y agoEveryone cannot actually withdraw their balance to fiat all at once - this would be a bank run and wouldn't actually be allowed to occur.
- gamblor956 7y agoTrue, but you can actually withdraw your balance. You cannot withdraw your Tether balance. They literally do not allow that. The best you can do is get an intermediary coin that some places might let you change into cash or another crypto.
- spurdoman77 7y agoAs I understand tether allows direct conversions to fiat, you just need big enough amount. Also it is very easy to convert to bitcoin, which is very easy to convert to fiat.
- jki275 7y agoYou should read the article -- this is addressed in it.
- ticmasta 7y ago... and earned that acceptance over a very long period of time, not because they said "trust us" enough times.
- lawn 7y agoThe minor difference is that you can withdraw your balance from banks, but you cannot redeem Tethers to what it's supposed to be backed by: U.S. dollars.
- teknopurge 7y agoEveryone cannot actually withdraw their balance to fiat all at once.
- lawn 7y agoYou're right, due to fractional banking and if people do a bank run will happen and the bank will fail (unless someone saves it). But it's at least possible to withdraw from banks. Redeeming Tethers is impossible.