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The Supply of Tethers at 27 November 2017 is $675M

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Re: The Supply of Tethers at 27 November 2017 is $675M

#31

Post by eemax »

Isn't it much more likely that Tether is keeping some or most of its reserves in bitcoin, rather than USD, as they claim?

Most people get Tethers from trading on bitcoin exchanges, not from buying it with USD. If Tether accepts payment for tethers in bitcoin, they're supposed to immediately cash the bitcoins out to fiat. But my guess is they're not actually doing this, and just keeping a good portion of their reserves in bitcoin. If that's the case, they'll be solvent as long as the price of bitcoin doesn't collapse (big if) - in fact, they would have made a fortune over the last couple of months.

Re: The Supply of Tethers at 27 November 2017 is $675M

#32

Post by lurker456 »

jstanley wrote: post #23
wslh wrote: post #21

Earlier quoted context omitted.

Are you saying this to the average "non-professional" investor? When people read about a cryptocurrency that represents fiat money they think about something simple and they assume you have the money to convert back and forth. The first page clearly says "A decentralized cryptocurrency pegged the U.S. dollar". This message is a scam, plain scam, you don't need to bring the SEC to realized that. After reviewing all th…

I'm not saying it to any investor , I'm arguing it from a purely disinterested perspective. I think it's a fascinating project. That the SEC thinks risk of insolvency is more of a problem than risk of corruption is irrelevant.

words have meaning. "pegged" is a wrong and highly misleading term because it implies a level of safety that is not there. Whether it's fraudulently so is indeed a question for the courts and the SEC.

Re: The Supply of Tethers at 27 November 2017 is $675M

#33

Post by lurker456 »

jatsign wrote: post #3

The fatal flaw in Tether is that you have to trust the company behind it. The whole point of cryptocurrency is you shouldn't have to trust anyone. And the company itself is so opaque it should send you running to the hills. I've been working on a new cryptocurrency pegged to the dollar. It's implemented as a smart contract on the Ethereum blockchain, so you can audit it's reserves yourself, at any time, instantly. Yo…

Can you explain the math behind the "Reserve Deficit Sell Penalty" example ?

If 1M loses 50k in value (5% loss), then surely someone holding $320 would face a $16 haircut ? The example shows $2.

Re: The Supply of Tethers at 27 November 2017 is $675M

#34

Post by eigenvalue »

eemax wrote: post #31

Isn't it much more likely that Tether is keeping some or most of its reserves in bitcoin, rather than USD, as they claim? Most people get Tethers from trading on bitcoin exchanges, not from buying it with USD. If Tether accepts payment for tethers in bitcoin, they're supposed to immediately cash the bitcoins out to fiat. But my guess is they're not actually doing this, and just keeping a good portion of their reserve…

This seems like the most likely explanation to me. It's a classic "Heads I win, Tails you lose" calculation, but with much better odds and payoffs than usual! If you are bullish on BTC as I am, this will turn out to be fine for everyone.

Re: The Supply of Tethers at 27 November 2017 is $675M

#35

Post by hathathat »

wslh wrote: post #21
jstanley wrote: post #17

Earlier quoted context omitted.

It's a different set of tradeoffs compared to Tether. You gain the risk of insolvency, but you lose the risk of corruption.

Are you saying this to the average "non-professional" investor? When people read about a cryptocurrency that represents fiat money they think about something simple and they assume you have the money to convert back and forth. The first page clearly says "A decentralized cryptocurrency pegged the U.S. dollar". This message is a scam, plain scam, you don't need to bring the SEC to realized that. After reviewing all th…

Not even central banks can provide the guarantee you’re looking for - they can only print money to devalue their currency, but they can’t make it appreciate [1]!

[1] https://en.m.wikipedia.org/wiki/Black_Wednesday

Re: The Supply of Tethers at 27 November 2017 is $675M

#36

Post by jatsign »

baby wrote: post #29
jatsign wrote: post #13

Earlier quoted context omitted.

1) Contract owner CANNOT withdraw ETH. 2) True. The Price Oracle is a separate contract that I want to modify to be more like Ark's superdelegate method - a certain number of delegates stake Unum and get to control the price oracle, and in return get to collect the fees from the Unum contract. There's a bit of a chicken-and-egg problem with that for now - it requires people who are interested in collecting a part of…

2) have you looked into towncrier?

I did, and it seemed like a good solution, except I wanted to be able to instantly get the price info, and town crier is a request/response method. The Price Oracle part of unum caches the price, so I can use a .call method from the Unum contract to retrieve the data immediately.

Re: The Supply of Tethers at 27 November 2017 is $675M

#37

Post by JohnJamesRambo »

Ruphin wrote: post #24

I think the most promising project to create a decentralized stablecoin is MakerDAO's 'Dai': https://github.com/makerdao/docs/blob/master/Dai.md I have been reviewing the mechanics and I haven't found any major weakness in the system. I'm really curious to see how it performs once released. Disclaimer: I am not affiliated with or have any position in MakerDAO.

I'm really waiting for this one too. Hope it saves crypto from disaster and I don't feel I'm being hyperbolic when I say that.

Re: The Supply of Tethers at 27 November 2017 is $675M

#39

Post by baby »

BoiledCabbage wrote: post #30
baby wrote: post #29

Earlier quoted context omitted.

2) have you looked into towncrier?

Everyone and their mother is starting an alt-coin. My next-door neighbor's sister's hairdresser has started one as well. Every 10th coin you mine, you get 15% off your next appointment. Have you looked into that one yet?

TownCrier is actually pretty interesting, it's leveraging Intel SGX to verify requests
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