4 ms·

Tether is meant to be pegged to the dollar. It is supposed to be printed in high quantities if high quantities of tethers are necessary to maintain the peg. Oth

by mantap 6y ago

Tether is meant to be pegged to the dollar. It is supposed to be printed in high quantities if high quantities of tethers are necessary to maintain the peg. Otherwise the peg would break and one tether would be worth more than one dollar. Am I just being thick? It seems like the article has cause and effect the wrong way around. Demand for bitcoin would be expected to drive creation of tethers not the other way around.

cconroy 6y ago
I just looked at coinbase's about page they have 35MM users now. Bitcoin is going through s-curve adoption like the internet. Fools on here look for conspiracy theories because they ignore demand increasing, for whatever reason.
- pavlov 6y ago
  I have a Coinbase account that I haven’t logged in to since 2017. Apart from speculation, there’s simply nothing to do with this stuff. Ethereum has promised “Web 3.0” applications since forever but they don’t even have the bandwidth for a novelty cat picture exchange service. This was not the case for any early internet service. They were all immediately useful and became part of my life. The only reason I stopped using something (eg Usenet) was that a better replacement became available.
wmf 6y ago
Yeah, you're missing the difference between pegging and backing. Tether is supposed to be backed 1-for-1 by USD in a bank account and thus new Tethers should only be created when money is deposited into that account.
35fbe7d3d5b9 6y ago
If you assume Tether is on the up and up: yes, this is absolutely correct. This also means there are $17B USD in a bank account somewhere, and you can go hand $1M in Tether in and get $1M USD back. Problem is, nobody has ever managed to do that. If, however, you assume Tether is engaged in a conspiracy with crypto exchanges: Tether prints USDT and buys BTC from a friendly exchange, demand for BTC will go up when people see the difference between USDT-BTC and USD-BTC and try to arbitrage. Tether then sells BTC for USD. Which is more likely? You can be the judge, but the fact that "exiting USDT for dollars" typically means "selling it for USDC" makes me pretty pessimistic about the first.

by mantap 6y ago

cconroy 6y ago

I just looked at coinbase's about page they have 35MM users now. Bitcoin is going through s-curve adoption like the internet. Fools on here look for conspiracy theories because they ignore demand increasing, for whatever reason.

pavlov 6y ago
I have a Coinbase account that I haven’t logged in to since 2017. Apart from speculation, there’s simply nothing to do with this stuff. Ethereum has promised “Web 3.0” applications since forever but they don’t even have the bandwidth for a novelty cat picture exchange service. This was not the case for any early internet service. They were all immediately useful and became part of my life. The only reason I stopped using something (eg Usenet) was that a better replacement became available.

wmf 6y ago

Yeah, you're missing the difference between pegging and backing. Tether is supposed to be backed 1-for-1 by USD in a bank account and thus new Tethers should only be created when money is deposited into that account.

35fbe7d3d5b9 6y ago

If you assume Tether is on the up and up: yes, this is absolutely correct. This also means there are $17B USD in a bank account somewhere, and you can go hand $1M in Tether in and get $1M USD back. Problem is, nobody has ever managed to do that. If, however, you assume Tether is engaged in a conspiracy with crypto exchanges: Tether prints USDT and buys BTC from a friendly exchange, demand for BTC will go up when people see the difference between USDT-BTC and USD-BTC and try to arbitrage. Tether then sells BTC for USD. Which is more likely? You can be the judge, but the fact that "exiting USDT for dollars" typically means "selling it for USDC" makes me pretty pessimistic about the first.