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Tether says its cryptocurrency is worth $2B–but its audit failed

arstechnica.com

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Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#31

Post by sanxiyn »

random_rr wrote: post #22
sanxiyn wrote: post #17

Nobody seems to discuss this, so I want to mention it here: for the first time in history, Tether was revoked in January 31st. Amount was 30 million. http://omniexplorer.info/lookuptx.aspx?txid=24db40680654b8b5... Specifically, its transaction type is 56. https://github.com/OmniLayer/spec#field-transaction-type I don't think this is a strong evidence, but if Tether is issued out of thin air, it is somewhat strange to…

Keeping pace with the market. Tether burning coins is an expected and healthy part of their supply management strategy. Think about how you'd keep a finite-supply coin pegged to a value - you'd print and burn tokens as needed to stabilize the value of the coin.

I agree it is indeed normal if Tether is backed.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#32

Post by citricsquid »

random_rr wrote: post #22
sanxiyn wrote: post #17

Nobody seems to discuss this, so I want to mention it here: for the first time in history, Tether was revoked in January 31st. Amount was 30 million. http://omniexplorer.info/lookuptx.aspx?txid=24db40680654b8b5... Specifically, its transaction type is 56. https://github.com/OmniLayer/spec#field-transaction-type I don't think this is a strong evidence, but if Tether is issued out of thin air, it is somewhat strange to…

Keeping pace with the market. Tether burning coins is an expected and healthy part of their supply management strategy. Think about how you'd keep a finite-supply coin pegged to a value - you'd print and burn tokens as needed to stabilize the value of the coin.

This is not what Tether is intended to be. Tether is not pegged to the value of 1 USD. The value of Tether does not need to be stabilized. Tether is a 1 for 1 USD backed coin, meaning it's entirely within the scope of Tether for the value of 1USDT to reach $1.10, $1.20 or even $1.50 -- if the market decides that is the value of it.

The point of Tether is that for each USDT there is a corresponding USD in an account belonging to Tether. If Tether were printing USDT to keep 1 USDT valued at 1 USD then they would be violating what Tether is publicly stated to be.

The whitepaper can be found here: https://tether.to/wp-content/uploads/2016/06/TetherWhitePape...

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#33

Post by apo »

jobigoud wrote: post #26
aviv wrote: post #6

Earlier quoted context omitted.

We also don't usually see a private company literally print money.

Banks are private companies and they create money all the time when they make loans.

For those who don't understand or believe this to be true, listen to the bankers themselves:

https://www.monetary.org/wp-content/uploads/2016/03/money-cr...

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#34

Post by JumpCrisscross »

Maert wrote: post #25
aviv wrote: post #6

Earlier quoted context omitted.

We also don't usually see a private company literally print money.

To be fair, isn't FED a private, non-federal company? :)

> isn't FED a private, non-federal company?

No. The Federal Reserve was created by Congress in 1913 [1]. Part of its complexity arises from its need to integrate public monetary policy with private capital markets.

[1] https://www.federalreserve.gov/faqs/about_14986.htm

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#35

Post by tootie »

jobigoud wrote: post #26
aviv wrote: post #6

Earlier quoted context omitted.

We also don't usually see a private company literally print money.

Banks are private companies and they create money all the time when they make loans.

Banks leverage money, they don't create it. Only the Fed creates it. And the Fed and all it's chartered banks are routinely audited.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#36

Post by apo »

There are similarities to Mt. Gox. One of the most important is the near-complete lack of user panic, despite ample warnings, right up to the collapse.

I remember vividly seeing Mt. Gox users warned to leave. They didn't. Somehow, they discounted or ignored every warning. Then they became angry when their money was stolen. Then they claimed Mt. Gox was responsible for their loss.

History seems to be repeating itself here. Tether holders somehow don't see, can't see, or refuse to see the writing on the wall.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#39

Post by arisAlexis »

hluska wrote: post #19

'"Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame," a Tether spokesperson told Ars by email.' In my mind, this paragraph is the article's money shot. If I was a legitimate business person issuing a security meant to fill Tether's place, I would pray that my auditor wa…

not really. In cryptospace governments want to ban things. Measures need.to be taken as this is just a centralized tool for the decentralised economy

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#40

Post by Grangar »

random_rr wrote: post #23
dragonwriter wrote: post #12

Earlier quoted context omitted.

> I mean... are people worried about Dogecoin blowing up? Dogecoin isn't used by exchanges as a vehicle to allow dollar-pegged ated trading without handling actual dollars, and Doge:BTC prices aren't treated by cryptocurrency price trackers as if they were, at some fixed multiple, USD:BTC prices. USDT and Doge don't play a similar role in the ecosystem.

That's interesting, my Cryptopia DOGE trading pairs (and LTC) beg to differ. Will there be a crisis of confidence if Doge crashes to 0 on Cryptopia? Of course not. USDT is one of many trading pairs offered by crypto exchanges. It matters no more or less than NZDT, Dogecoin, Litecoin, Bitcoin, Ethereum, or any other common trading pair in the crypto world.

Yes it does, because USDT is (supposedly) inherently pegged to the dollar. It's used as a vehicle for stability when normal banking is not available.

See: binance, liqui.io. These exchanges don't have fiat deposits/withdrawals. BTC is meanwhile taking all alts down with it.

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