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I am out of the loop. What is Tether?

• ur-whale 6y ago
  Old but still relevant: https://hackernoon.com/a-closer-look-at-tethers-blockchain-5c3032328e52 https://hackernoon.com/a-closer-look-at-tethers-blockchain-5...
  • ralfd 6y ago
    Thanks. I did see the other links you posted, but it is hard to wrap my head around how one influences the other.
    • Traster 6y ago
      It's really very simple. Tether is meant to be designed such that you can buy 1 "tether" (USDT) for $1 and sell for $1, initially the suggestion was that every tether in existence was backed by $1 in a bank account owned by the issuer. But that doesn't seem to be true. So how do you manipulate BTC using USDT? You just print USDT and use them to buy BTC. Everyone thinks that 1 USDT = $1, so they're willing to receive it. As long as no one actually tries to cash out the USDT, it's fine. And why would you cash out? Bitcoin is going to the moon! So as long as there's a net inflow of cash into tether, the issuer of tether can just pump the market up using unbacked USDT.