Bitcoin Forum

how much credence do you all put into the Tether coin playing games and NOT fully backing with USD as they claim?

Thus the reason for the 'supposed' pump and or bubble as skeptics claim about the BTC pump.

and the exchange Bitfinex is it?

assuming that .... what do you think the effects will be?

9k coin
8k coin
7k coin
6k coin

etc?

Start a discussion...I"m unclear if this will really be as bad as folk say..if it is so....or just another bump in the road...

I'm hoping, IF they get burned..it will shake out to cheap coin and a rebound in price and onward and upward

(I am often wrong, however) :(

thoughts on what IF Tether is worst case and its effects

consider taking the poll also

thanks

doesnt matter..

tether market cap is 2bi out of 400bi total.. means nothing

it will be sad for everything who will lose their money

but its insignificant

 A reply on the Bitcoin Speculation Thread to my question above...that makes me feel a BIT better in hindsight....


https://bitcointalk.org/index.php?topic=178336.msg29409776#msg29409776 (https://bitcointalk.org/index.php?topic=178336.msg29409776#msg29409776)



https://ip.bitcointalk.org/?u=https%3A%2F%2Fi.imgur.com%2Ft9fCu9G.jpg&t=585&c=DuUe-lRmaOYpRA


Note: thanks to fluidjax for original post and image above on bitcointalk speculation thread...


then again, we are dealing with hairless/funny smelling/egg sucking/human primates...that like to throw poo...or at least till about 100,000 years ago.....

the herd could panic 'mightily', on the press FUD storm to sell papers and web eyeballs on such a crash......

just saying (again, I know zip...just looking for info/conjecture from others)

Can somebody please explain this whole Tether debacle thoroughly? I’ll be brutally honest, I know nothing about it & why it’s making such a bad impact on the bitcoin market.

Au contraire. Market cap means nothing. Fresh injections of USD mean everything.

New USDT is much more powerful than regular dollars. It's new money. Most of the USD has been floating around for ages.

As for my own pure guess, I believe they do have the dollars. What'll end Tether is either people losing faith even when the dollars are there, as they're refusing to reassure anyone, or the US government shuts it down.

doesnt matter.. if usdt fails, only people holding usdt will be affected ! it doesnt mean anything in the grand scheme of things
completely insignificant for people who are not holding usdt

if one is holding usdt, be aware that it might fail and you may lose all your money !

otherwise.. do not care ! there will always be new scams (not saying usdt is a scamming).. just dont get involved with them !

Well, at least in the short term price (today) it seems to have some weight...myself....if Tether is playing games, I'd like to

pull the band-aid off 'quick' rather then have this slowly bring prices down over the next two months of this being unknown (likely)

a fast find out that Tether was playing games.....would mean for a quick rebound ...or odds of..imho

this keeps dragging out...we will get to 6k and THEN the proof will be shown and blamo, we'd be at 3k

people are idiots and will overreact, again in my view...myself in HODL mode...win or lose it will make a great story years from now

in the nursing home...when all I have is my 1) tracksuit 2) slippers and 3) toothbrush....win or lose the currency of nursing homes is 'stories'

and this whole crypto soap opera, by that point in my life, will be a doozy!

silly hobby, FML

The idea behind tether is that the team running it (basically the same folks as run Bitfinex) collect US dollars from people via bank transfers to Tether accounts. They are then issued Tethers at a 1:1 rate with the dollar. Tethers can then be redeemed  and dollars transferred back out to banks the same way. You can send your tether tokens to any exchange that uses them to buy cryptocurrency, with a transaction very similar to a Bitcoin transaction.

Why use tethers? It gets exchanges out of the regulatory/legal headaches of dealing with fiat currencies, and allows you to move "dollars" around  very quickly and easily just like Bitcoin. So long as it is stable, it gives cryptocurrency traders a refuge to flee to in a down market. As such it's extremely useful, and not surprisingly there are probably a lot more exchanges out there using tethers than using actual dollars. (If you find you can't actually withdraw "$$" to a bank account on a given exchange, that means those are actually tethers you are trading there. Many people don't even know it.)

So what could go wrong? Well, in principle there would be nothing to prevent the centralized Tether team from issuing more tether tokens than they've received dollars for, or they could spend the dollars and not have them available if people wanted to redeem their tether. That means it is important for them to be audited so people can trust that they are not doing this. We can see how many tethers are created on the blockchain, but bank accounts are not so transparent.

Another risk is that Tether could have trouble maintaining bank accounts, due to the hostility of banks towards cryptocurrency or issues with sending/receiving dollars to people's bank accounts globally. Being located outside the U.S. aggravates this problem as the U.S. is getting very difficult to deal with when it comes to sending/receiving dollars from abroad.

As a result, Tether has been struggling with getting a stable bank network set up for their accounts for the better part of a year. And the audit we've been waiting for month after month is basically canceled. The Tether team says the auditors were making it too difficult to complete the audit. This could mean the Tether team is hiding something, but the fact that we all know they've been having banking troubles means it could just be related to that. My gut feeling is that Tether has all the $$ they need and then some, but they might have been using shell companies and other "gray" practices that drove the auditors nuts as they try to move dollars around without banks shutting them down.  This is partly based on my own interaction with their contact on Skype for wire transfers back in December. (Also, keep in mind that Tether can be very profitable for them if they earn any kind of interest rate on over $2 Billion on deposit. The overhead for the entire operation can't be more than a tiny fraction of that.)

So basically a lot of people are freaking out that the Tether team is printing counterfeit, unbacked "dollars" that people have been using to buy Bitcoin, boosting the price artificially. I doubt it, because the Tether team is also behind Bitfinex, which has worked very hard to create a top-of-the-line, well functioning cryptocurrency exchange that is targeting "elite" traders. (You now need to deposit $10,000 on Bitfinex just to start trading.) I can't see them making such a sincere and strong effort to build Bitfinex if they were running a scam with Tether that would inevitably come crashing down at some point.

TL/DR: Tether's woes can be adequately explained by the facts we already know (the banking headaches), without engaging in conspiracy theories about any dishonest behavior or scam going on.

Check out my thread, you will also find a youtube video I created. https://bitcointalk.org/index.php?topic=2839145.msg29126488#msg29126488



Also,


Don't forget that bitconnect has billions of bitcoins that likely will never be given back. So how do you think that will effect the market? Do you think they are selling their bitcoin, or exchanging it?

Missing the point completely. Tether market cap is irrelevant when it's being used for wash trading. The daily Tether volume is 10 to 15% of the total market volume despite Tether mcp, as you point out, being < 0.5%.

Therein lies the problem. Tether is being used to swing the whole market one way and then the other by Bitfinex across all exchanges listing Tether as a currency. 3-4 billion worth of wash trading on a daily basis CAN absolutely move the market SIGNIFICANTLY.

credence*

The 2 billion USD market cap is a lot as it is listed in coinmarket cap in top25 but if that is collapsed then the whole cryptoworld won't notice it too much like the bitcoin crash that is happening every week and it's not stopping.

---

In most of the exchanges the price of tether is $1.00, I think that in Bitfinex the price is static (as they have created this coin to compensate the stolen funds from they users?)
It has never been so easy to cover the loss, and have this scalability of ~USD to any crypto and trade so easily, thats why tether has been so much popular but the down side is that it belongs to Bitfinex which is not stable as people need.

I think there's a fairly large chance that Tether is not backed by USD completely, and there's an even larger chance that there will never be a way for them to actually maintain the kind of market share they have been maintaining. Tether never looked like something that was going to be especially safe in my opinion either, and I was personally considering it as a good medium for altcoin trading but I did not want to leave any kind of trust with a system like that once I looked into it a bit. There's nothing that really convinced me that they would be able to maintain the system they claimed they could, and it looks like I might have been right.

so ? usdt volume is "big" because some exchanges dont offer usd
if they did, usdt would no longer exist !
the fact is that usdt is not relevant to how bitcoin works

let them be.. if it fails, fails..

oops...fixed the spelling :)

Nothing to do with how it works. An awful lot to do with how it's valued.

If there's a reasonably convincing hint that Tether was printing gaily out of thin air confidence in all coin valuations would collapse. It may not need to be conclusive, confidence can evaporate very rapidly.

So, if I have this right, Tether could be SELLING BTC, big time, driving the price down...for the simple fact of just getting enough USD,  to prove their books are not cooked?

That would be quite the ingenious, money-making machine, and I'm not entirely sure if they do get their ducks in a row...it would even be illegal after the fact if it works.

We get screwed on the pump, they come out smelling like roses....(what am I saying, this is the crypto, this is the likely result) :(

Tether, I think, is very much trust based. And the fact that it is backed by an organization that hold very little liquidity and has lost the trust of the crypto community on many levels (Bitfinex) makes things even worst. It's a required evil though because currently no better "stablecoin" solution exists. All those unlicensed exchanges can't operate without it and this is what's keeping it alive.

What disturbs me about this is what's not being said. Not in the mainstream press, but that's not surprising. Not really in the fringe press, which is a little more so. Not here, which terrifies me.

People, do you not see the blatant admission by the United States Federal reserve that what they do is criminal?

This whole 'scare' is about fractional reserve banking. And the people who are calling tether out, regardless of the merit of the accusation, are doing the exact thing they are complaing about on a grand scale!

There is no way in hell that Tether is operating at the low level of reserves that the dollar is. None.

Yet we keep falling for this, over and over and fucking OVER!

The powers that be (trippin) scream about how crypto is, might be, or ought to be used in criminal proceedings. Unsaid, almost always, is what currency is MOST OFTEN used in criminal proceedings! Anybody want to take a stab at which one that might be?...



I'll wait.






Yeah, ok, for the couple of credulous newcomers. It's the United States Dollar. The Euro comes in a distant second. In a recent study commissioned by the very people doing the screaming it was estimated that criminal use by their definition of bitcoin is less than one percent of all transactions. And that accounted for Silk Road, most of which was only criminal in a legal sense. By this I mean that declaring something illegal doesn't make it immoral or wrong. If I want to buy something and you want to sell it, and no one ELSE is harmed by it happening between us, there is NO LEGITIMATE WAY of calling criminal. But I slightly digress.

Now this thing with Tether, this is way bigger. Because the whole criminality argument goes into grey areas, interpretations, etc. This doesn't.

The questions are these: Is Tether backed one to one by the USD, or is it practicing fractional reserve policies?

If the answer is the latter, is this fraudulent?

If so, then why are we calling out TETHER and NOT EVERY FUCKING CENTRAL BANK IN EXISTENCE???

Scale does not make a thing immoral or not. There is a reason why appeal to popularity and appeal to authority are logical fallacies.

Thank you Sir ebliever for that wonderful posts. It made it all clear to me because I know nothing about that Tether too but I see it just in green and sometimes a little red. The only thing which doesnt move much. So that is why. It is USD itself just brought thru the internet. It is not good for the market.

So this is the answer that I have been looking for ever since the fall of each crypto currency.
Where is the money?
How did it go out so easily?
If it is invested in another coin or token then we will see it.
They can now move back and forth easily with this. Not funny at all.

This is the reason why I never keep majority of my Fiat in usdt. I will rather trade crypto against USD in gdax or EURO in kraken, bitpanda

Like many others I also doubt it is not backed by real USD like they claim. However when it get bust, it might not have any direct effect on market other than few dips because of panic sellers.

Thank you! I don't have any insider information, so I can't answer your question about which banks Tether is currently using for their dollar deposits. I still hope they can either get an audit done, or find a way to transparently demonstrate straight to the public that they control adequate funds (in dollars) to back their tethers.

It's worth noting that a Korean exchange just announced that they will independently back Tether at 1:1 with the US Dollar if a shortfall emerges. That's a pretty amazing development and demonstrates that someone knows something good and is very confident about Tether, because that's a statement that they can be held legally accountable for down the road.

Link: https://twitter.com/CryptoOfKorea/status/961087459093307393