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Tethers are not smart contracts. It's a separate crypto blockchain currency from Bitcoin and it claims to have a near 1:1 ratio with the USD, hence the name...it's "tethered" to the USD. This is not unlike some foreign currencies.
Touché. But the Omni Core Layer mentioned in the announcement implements them.
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Yep, you'd expect to eventually see a sustained divergence to price in an elevated level of counterparty risk (like we saw back at Mt. Gox). In the short run, though, arbitrage bots gonna arbitrage.
In the short run, though, arbitrage bots gonna arbitrage. Don't people who run arbitrage bots usually understand concepts like counterparty risk? Do they not realize that by moving money into Bitfinex they're potentially acquiring a large amount of assets which will end up being devalued?
Isn't tether the one that screwed up? They are the ones who got stolen from, why do other exchanges have to bend over backwards and issue updates? If the attacker is moving fast enough, exchanges probably can't even respond in time. That shouldn't mean that they lose money. If tether reserves the right to delist coins at any time without much notice, why would you ever consider that a safe asset to accept?
Isn't tether the one that screwed up? They are the ones who got stolen from, why do other exchanges have to bend over backwards and issue updates? If the attacker is moving fast enough, exchanges probably can't even respond in time. That shouldn't mean that they lose money. If tether reserves the right to delist coins at any time without much notice, why would you ever consider that a safe asset to accept?
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Well, it is "supposedly" backed up by USD. A whole bunch of people have been questioning whether they ACTUALLY have that money, very recently, and surprise surprise, there just 'happens' to be a hack that happens right now.
Not sure if "a whole bunch of people" equates more than 5 extremely vocal people on twitter and reddit. Tether published an audit a month ago.
What an amazing coincidence!
It is almost as if people predicted literally this exact scenario.
If you haven't been following along, here's why this matters: Tethers is a sole-source cryptocurrency, pegged to the US dollar. Bitfinex produces it, though they're cagey (some would say outright lying at times) about the level of involvement. The primary purpose of tethers is money laundering, even more so than cryptocurrency generally. Bitfinex was cut off from the US financial system, which makes it impossible for…
The funny part is that Tethers came into being after Bitfinex was hacked, right, as a way to help them out? Sometimes we say after someone or a company makes a mistake they're less likely to do so again. In this case, "oops"?
And will you get it back? By design, no. This is the unfortunate reality of crypto currencies.
Isn't tether the one that screwed up? They are the ones who got stolen from, why do other exchanges have to bend over backwards and issue updates? If the attacker is moving fast enough, exchanges probably can't even respond in time. That shouldn't mean that they lose money. If tether reserves the right to delist coins at any time without much notice, why would you ever consider that a safe asset to accept?
Tether is handling this completely wrong. They should not hard fork Omni and force everyone to blacklist addresses. Instead, tell everyone to halt on-chain trading, take a snapshot of the chain, then create a new tether token and send them to everyone holding the old tethers (minus the thief). I think the bitcoins Tether would have to pay in transfer fees would be a fitting punishment for their poor security.