Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tether Withdrawals Top $10B

cnbc.com

Post reply on HN
Print view View original

181–190 of 465 posts

Re: Tether Withdrawals Top $10B

#181

Post by flerchin »

MockObject wrote: post #175
ineptech wrote: post #154

Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…

> whenever the price of Tethers drops to $0.99 If the Tether is pegged to the USD, who would ever sell one for $0.99?

Folks who want their fiat.

Re: Tether Withdrawals Top $10B

#182

Post by carrja99 »

kravvall wrote: post #119
compsciphd wrote: post #53

Earlier quoted context omitted.

if tether is backed 1:1 with dollars, how is it not withdrawals? I.e. either the number of total coins in circulation has dropped (unsure how that is different than withdrawing) or its valuation has dropped (i.e. it lost its peg). If they are just destroying coins, then they weren't 1:1 (possibly more than 1:1 before, but also possibly less).

Nobody, not even tether claims that tether is backed 1:1 by dollars.

They did once, but changed their tune.

People then get all hand wavy and point at the fact banks have fractional reserves too.

Re: Tether Withdrawals Top $10B

#183

Post by [deleted] »

ineptech wrote: post #154

Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…

[deleted]

Re: Tether Withdrawals Top $10B

#184

Post by [deleted] »

bko wrote: post #177
ineptech wrote: post #154

Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…

Its not entirely obvious what they "should" do with the fiat they make selling their token. They could invest it something safe like treasuries and keep the interest for themselves. But even treasuries could go down in value and if there are enough withdrawls they'll have to sell it at a loss. Or they can invest in money market funds, or similar short term investments. Or commercial paper (unsecured short term debt).…

[deleted]

Re: Tether Withdrawals Top $10B

#185

Post by swamp40 »

Eventually, the US will figure this out and make a USD crypto that will be used as THE stablecoin.

It seems obvious to me that a stablecoin needs a solid governmental backing, since there is no profit in it and you need unlimited deep pockets in case of a run.

The advantage is then that the USD remains the world's premier reserve currency, even into the digital age.

Re: Tether Withdrawals Top $10B

#186

Post by jermaustin1 »

MockObject wrote: post #175
ineptech wrote: post #154

Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…

> whenever the price of Tethers drops to $0.99 If the Tether is pegged to the USD, who would ever sell one for $0.99?

Anyone unable to sell for $1.00 because no one is buying at $1.00.

Re: Tether Withdrawals Top $10B

#187

Post by MockObject »

flerchin wrote: post #181
MockObject wrote: post #175

Earlier quoted context omitted.

> whenever the price of Tethers drops to $0.99 If the Tether is pegged to the USD, who would ever sell one for $0.99?

Folks who want their fiat.

What does "pegged" even mean unless Tether is always willing to pay 1 USD for one? Then who would sell their tether for $0.99, at a loss?

Re: Tether Withdrawals Top $10B

#188

Post by ohgodplsno »

ineptech wrote: post #154

Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…

Now imagine that Tether, instead of waiting for someone to give them a dollar to print one USDT, printed billions of them and said "yeah don't worry they were paid for they're backed. Trust us" and then never opened any of their books to anyone but a single unknown audit company that is basically owned by one of their friends.

Also imagine that they took the actual money that was given to them and, instead of keeping them in a bank account, said they were going to invest them. (Or did not say it, and did it anyways). Imagine they invested it in amazingly profitable sectors like the housing market in China which is definitely not crashing right now.

Tether isn't backed.

Re: Tether Withdrawals Top $10B

#189

Post by oneoff786 »

MockObject wrote: post #175
ineptech wrote: post #154

Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…

> whenever the price of Tethers drops to $0.99 If the Tether is pegged to the USD, who would ever sell one for $0.99?

Because $0.99 is better than $0.

Pegged is a meaningless term if nobody is supporting the peg.

Re: Tether Withdrawals Top $10B

#190

Post by oneoff786 »

MockObject wrote: post #187
flerchin wrote: post #181

Earlier quoted context omitted.

Folks who want their fiat.

What does "pegged" even mean unless Tether is always willing to pay 1 USD for one? Then who would sell their tether for $0.99, at a loss?

Tether is not willing to do this
Post reply on HN