Tether (USDT) Explained - Is Tether a Scam?

in bitcoin •  7 years ago 

If trade cryptocurrencies, you probably come across the most infamous stable coin : Tether (USDT). Tethers are pegged to the USD dollar and are used in many exchanges that don't deal with Fiat (Binance, Poloniex, Bittrex). On paper 1 USDT can redeem $1 USD from the Tether platform, but there has been a lot of accusations of a Scam. This video explains what Tether is and its limitations.

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What does that mean about Binance then?

  ·  7 years ago (edited)

There is something similar to Tether is called “DAI” or “Maker” .. have you noticed it? Would like to know your opinion guys if someone has ever used it ?
9846B33E-B10A-47A1-BDEA-AEE3307DCB62.jpeg

Link to its page here.. I d like to know your opinion about it guys :
https://makerdao.com

  ·  7 years ago (edited)

Thanks for the update. I'm sure something is going to go wrong with Tether at some point.

I want to watch any coin that is tied to fiat crash and burn into a slow painful death.

Do you feel this way related to Steem Dollars?

Not enough people tend to know a lot about USDT.

I stay away for any centralized project, I only truat in code!

Yes, Tether has the potential for abuse.

Just stay in Bitcoin. They have to constantly print tether

Problems that I see with this situation are still that Tether Co is owned and operated by Bitfinex. That definitely seems like a conflict of interest.

This is especially made clear when you realize that they keep saying they have all this money, but there's never been an audit. I believe they firm they said they were hiring has said they were never even approached to do an audit.

The way they get money into Tether (since the last time I checked, they have no banking) is to create demand for USDT through purchases by Bitfinex and then move the money on paper over to Tether. It never changes accounts.

Also, they say in their own terms and conditions that they're not obligated to give you $1 for 1 USDT. It's a promise that they'll give you $1, but they state they don't have to honor that promise.

I have stayed as far from Tether as I can. I don't want to be the one holding them when it all falls apart.

Note: Not financial advice. Do your own research.

Also, remember that until recently, Bitfinex denied that they own/run Tether. And this was later proved to be an outright lie - just like their audits, which never materialize. Bitfinex and Tether are just asking to be raided by the authorities.

  ·  7 years ago (edited)

Actually the idea of TETHER was first discussed by Vitalik Buterin back in 2013...he discusses how this idea could collapse. TETHER runs on the bitcoin blockchain as like a token in Ethereum...I just wonder if bitcoin ever has a huge collapse..Will it crash tether? It does run on the same chain...similar to tokens running on Ethereum...I wonder what would happen to tokens if Ethereum ever to collapse... Here is an interesting video that talks about that...

The fact that Tether is not allowing for a fully transparent audit is highly suspect. Whether its legit or not I personally don't trust it and tend to avoid using it at all costs.

So do you think Tether in trouble? I do not think the audit will ever happen.

Tether is Fishy as F.

It’s something fishy with USDT?! I don’t trust Tether!

Wow, thanks for that useful information about crypto!

Brilliant sir

you are excellent post

Thank you for the informative video!

BitUSD is the way to go!

Most of the problems with Tether have little to no effect on people who use it. It's a problem of the exchanges that use it. I'm guessing that nobody takes Tether off the exchanges; it's mostly used as a temporary store when a trader wants to be out of the way of volatility in other cryptocurrencies.

Exchanges like Binance make sure you won't take USDT off the exchange by charging a ludicrous transaction fee to withdraw it. So, if you are trading USDT against other people on the exchange and the exchange itself, it is only a problem if the exchange needs to convert Tether to Fiat. This could affect the solvency of the exchanges, but I think there are plenty of other issues with the exchanges we use that will be a problem before Tether. I mean, does anybody really, really trust any of these exchanges?

The market cap for Tether is $2.218 Billion which I don't think any of us really believe they have stashed away in some bank. There's another problem though regarding the circulating supply which is currently $2.248 Billion meaning that there's an extra 30 Million coins floating around

In b4 Tetherconnect. ;)

Nice post.

If it quacks like a duck and walk like a duck of course is a Horse ! ;)

YES!

At the end of the day tether is a double edge sword. It can both help on market crashes but it's also risky to hold! At the moment best way to hold your capital is ethereum, its the one who drops the least and it has huge potential at least for the short term!

Thanks for sharing!