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I don't even understand what the purpose of USDT is. Why use it over a stablecoin that is backed by your crypto exchange?

baq 4y ago
Edit: misread. Usdt is the common coin to transfer between exchanges and exchange coins. Tax avoidance in some countries and bypassing KYC rules.
mike_d 4y ago
Think of an exchange issued stablecoin as a gift card, it is issued by one store and only good as long as that store is in business. Tether is more like a dollar or euro and good across multiple stores. I have USDT that is in my own wallet and not on an exchange that I could send directly to you if I wanted.
- cowtools 4y ago
  Okay, but you already have a business relationship with your exchange. so there are fewer points of failure. >I have USDT that is in my own wallet and not on an exchange that I could send directly to you if I wanted. I suppose, but this "Tether" currency is still minted by a centralized entity. It could be worthless tomorrow. I don't see how self-custodialship of this centralized monopoly money matters. You might as well just use a centralized currency if you trust this centralized entity not to inflate the currency. When I use an exchange-backed currency like BUSD, USDC or Kraken's USD, I don't intend to exchange it peer-to-peer at all. The whole point of exchange in the first place is that you use the cryptocurrencies for peer-to-peer transfers. The only thing a stablecoin has to do is: 1) Accept (cash, bank, CC) deposits 2) Allow (cash, bank, CC) withdrawls 3) Allow me to exchange it for cryptocurrency with others 4) Don't lose my money in the process If you trust some institution to do #1-3, why would you want to have some other, less credible institution to handle #4 as well?
- scotty79 4y ago
  But the price of tether is still guaranteeled by a single entity. If that entity is lying or goes bust you are still holding your usdt's but they are worth nothing now.
HWR_14 4y ago
Why use a stable coin instead of an ACH or wire transfer? I mean, if your goal is 1:1 parity with USD, my bank solved that.

baq 4y ago

Edit: misread. Usdt is the common coin to transfer between exchanges and exchange coins. Tax avoidance in some countries and bypassing KYC rules.

mike_d 4y ago

Think of an exchange issued stablecoin as a gift card, it is issued by one store and only good as long as that store is in business. Tether is more like a dollar or euro and good across multiple stores. I have USDT that is in my own wallet and not on an exchange that I could send directly to you if I wanted.

cowtools 4y ago
Okay, but you already have a business relationship with your exchange. so there are fewer points of failure. >I have USDT that is in my own wallet and not on an exchange that I could send directly to you if I wanted. I suppose, but this "Tether" currency is still minted by a centralized entity. It could be worthless tomorrow. I don't see how self-custodialship of this centralized monopoly money matters. You might as well just use a centralized currency if you trust this centralized entity not to inflate the currency. When I use an exchange-backed currency like BUSD, USDC or Kraken's USD, I don't intend to exchange it peer-to-peer at all. The whole point of exchange in the first place is that you use the cryptocurrencies for peer-to-peer transfers. The only thing a stablecoin has to do is: 1) Accept (cash, bank, CC) deposits 2) Allow (cash, bank, CC) withdrawls 3) Allow me to exchange it for cryptocurrency with others 4) Don't lose my money in the process If you trust some institution to do #1-3, why would you want to have some other, less credible institution to handle #4 as well?
scotty79 4y ago
But the price of tether is still guaranteeled by a single entity. If that entity is lying or goes bust you are still holding your usdt's but they are worth nothing now.

HWR_14 4y ago

Why use a stable coin instead of an ACH or wire transfer? I mean, if your goal is 1:1 parity with USD, my bank solved that.