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ulhaq (OP)
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March 10, 2017, 07:36:03 PM |
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The market cap of Tether is around an all-time high, ~ $35 million, #11 overall, and probably will keep increasing. I know there are issues in that it is backed by USD, so they have to maintain physical security, etc.
But what maintains the security of the USDT network, hacking attempts, and so forth? I do not think there is mining like bitcoin mining. Tether layers on top of the bitcoin network using the omni protocol, but does that mean the security can somehow be piggybacked on bitcoin security? Or does it have to do with the number of users on tether, as more ppl use it, the security increases?
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ulhaq (OP)
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March 11, 2017, 05:07:57 AM |
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Realized another problem with tether - I thought they only allowed conversion of USD and USDT (which would always insure they have adequate reserves). But according to their website they allow the exchange of BTC to tether. ( https://tether.to/faqs/ - KYC process). So if BTC has a significant drop (like today), they may not have enough USD to maintain their 1:1 ratio of USDT to USD. According to this page https://wallet.tether.to/transparency, the deficit is just under $1 mil USD. I wonder how they are going to make that up? |
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BitcoinNational
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Activity: 1470
Merit: 1010
Join The Blockchain Revolution In Logistics
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March 12, 2017, 10:47:10 AM |
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50-cent TX fee ...
Yeah, that.
Nubits is like 0.01 cent.
We'll see.
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BitcoinNational
Legendary
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Activity: 1470
Merit: 1010
Join The Blockchain Revolution In Logistics
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March 12, 2017, 10:51:58 AM |
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tHAT SAID.
Who ever is the $-peg, and can offer decentralized trustee expansion.
WINS!
Very simple idea.
Agent X holds $50k dollars in Bank XYZ.
Agent Y holds $50k dollars in Bank ABC.
this scales.
the blocks of $-value per trustee are of mater of importance.
It will work. Question is who does it?
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topesis
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March 12, 2017, 11:44:20 AM |
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50-cent TX fee ...
Yeah, that.
Nubits is like 0.01 cent.
We'll see.
Common, you can't compare Nubits with Tether, the difference is there for all to see |
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ulhaq (OP)
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March 12, 2017, 07:55:44 PM |
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50-cent TX fee ...
Yeah, that.
Nubits is like 0.01 cent.
We'll see.
Common, you can't compare Nubits with Tether, the difference is there for all to see Agree, Nubits seems to have significant problems. First, they cannot maintain the peg. Their solution to maintain it is to increase the circulation when the value rises, and the decrease the circulation when the value falls. But in order to decrease the circulation, they are going to temporarily take nubits off the market and pay the owners interest. Where are they going to get the money to pay the interest? If the value keeps falling they cannot maintain it. Tether makes more sense, if they indeed hold 1 USD in reserves for each 1 USDT. Looking historically at nubits, they could not maintain the peg from June-Sept 2016, not even close to 1 USD. The total market cap now is only $135,000. That's 0.38% of the market cap of tether. |
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ulhaq (OP)
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March 18, 2017, 09:30:53 AM |
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According to the most recent update on the transparency page, section on USD:
Total Assets $29,790,829.57
Liabilities (Tether in Circulation)
Total Authorized $44,951,600.00
Authorized but not issued $6,722,965.09
Total Liabilities $38,228,634.91
Shareholder Equity -$8,437,805.34
So it seems that they have a deficit of $8 million USD. This doesn't give me confidence to use USDT. If everyone wanted to exchange their USDT for USD, the bank could not do it (if I am interpreting their numbers correctly). I am not sure why the value of USD is still equal to USDT.
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prospector1
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Merit: 0
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March 19, 2017, 05:49:59 AM |
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Yes, it would be good to get some clarification from them on this, it now shows a deficit of more than $11 million dollars. Their claim of USDT being 100% backed by dollars in the bank doesn't seem legit.
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ulhaq (OP)
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March 20, 2017, 03:06:56 PM
Last edit: March 22, 2017, 05:39:16 PM by ulhaq |
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They probably simply haven't caught up with demand yet. There has been a lot bigger demand for Tether since around January when the Bitcoin price spiked. That is the risk with a centralized coin like this though.
There is no sure way for them to "catch up with demand." They are supposed to have 1 USD in reserve for each 1 USDT. There is no place for this $11 million USD to come from. I wonder why the price still holds at 1 USD and does not collapse? I believe that this is a result of the drop in the value of BTC last week. The only option for them seems to be to not issue anymore USDT until the price of BTC catches up (assuming it does so). EDIT: After more research apparently (although it is not explicitly stated) they only issue USDT per USD they receive. And vice-versa. So they can exchange as much BTC for USDT as they want, and can take a gain or loss on it, but it should not affect the reserves, thus they should be able to maintain solvency. They are not/do not have a bank, but store the USD in external commercial banks, so the funds should be relatively well-protected. There is always the risk that the company absconds with the money. Tether is incorporated in the Virgin Islands. There is some concern that the founder, Brock Pierce, was involved in a child sexual abuse ring: https://www.buzzfeed.com/hunterschwarz/mystery-man-at-center-of-alleged-hollywood-sex-ring-has-vani |
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ulhaq (OP)
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March 22, 2017, 05:44:50 PM |
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One point that is not clear is how Tether can be profitable with such low fees. We do not know the volume of transactions, but that could be significant, and it states on the FAQ page that they are in Beta and are planning to expand from USD to the euro and yen. So that should provide additional revenue.
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jeffytune
Full Member
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Activity: 140
Merit: 100
Peace not piece.
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March 22, 2017, 09:50:56 PM |
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No Security. If its pegged to fiat then it kills the whole purpose.  |
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ulhaq (OP)
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March 22, 2017, 10:37:01 PM |
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mmortal03
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Activity: 1762
Merit: 1011
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April 20, 2017, 07:31:20 PM |
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EDIT: After more research apparently (although it is not explicitly stated) they only issue USDT per USD they receive. And vice-versa. So they can exchange as much BTC for USDT as they want, and can take a gain or loss on it, but it should not affect the reserves, thus they should be able to maintain solvency. They are not/do not have a bank, but store the USD in external commercial banks, so the funds should be relatively well-protected. There is always the risk that the company absconds with the money. Tether is incorporated in the Virgin Islands. There is some concern that the founder, Brock Pierce, was involved in a child sexual abuse ring: https://www.buzzfeed.com/hunterschwarz/mystery-man-at-center-of-alleged-hollywood-sex-ring-has-vaniIs Brock Pierce still involved with Tether at this point? I thought Tether was bought by Bitfinex some time ago. Also, Reeve Collins was a co-founder and CEO, but he left in 2015. |
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emperorofthesea
Newbie
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April 20, 2017, 08:14:32 PM |
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tHAT SAID.
Who ever is the $-peg, and can offer decentralized trustee expansion.
WINS!
Very simple idea.
Agent X holds $50k dollars in Bank XYZ.
Agent Y holds $50k dollars in Bank ABC.
this scales.
the blocks of $-value per trustee are of mater of importance.
It will work. Question is who does it?
I am working on a 100% secured currency that has a minimum 1 USD value. I have worked out the legal, tax, and banking aspects of the project, but I am still in need of developers on the technical side if you know anyone who might be interested. |
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thebatletbet
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April 20, 2017, 11:26:12 PM |
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50-cent TX fee ...
Yeah, that.
Nubits is like 0.01 cent.
We'll see.
if every sending fee 50 cent is not good service because only sending 1 dollar can reduce 50%, crypto curency neeed low sending fee and fast transaction iam never use tether, because my country not support use tether.io |
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mmortal03
Legendary
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Activity: 1762
Merit: 1011
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April 21, 2017, 06:58:52 AM |
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50-cent TX fee ...
Yeah, that.
Nubits is like 0.01 cent.
We'll see.
if every sending fee 50 cent is not good service because only sending 1 dollar can reduce 50%, crypto curency neeed low sending fee and fast transaction iam never use tether, because my country not support use tether.io Make sure you support SegWit, then. Btw, it's tether.to, not tether.io. |
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hermanhs09
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April 21, 2017, 07:00:20 AM |
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The market cap of Tether is around an all-time high, ~ $35 million, #11 overall, and probably will keep increasing. I know there are issues in that it is backed by USD, so they have to maintain physical security, etc.
But what maintains the security of the USDT network, hacking attempts, and so forth? I do not think there is mining like bitcoin mining. Tether layers on top of the bitcoin network using the omni protocol, but does that mean the security can somehow be piggybacked on bitcoin security? Or does it have to do with the number of users on tether, as more ppl use it, the security increases?
It's owned by Bitfinex. So right now it's not safe to use. If Bitfinex is able to clear its name then maybe. Maybe USDT will become safe to use again but right now that isn't the case yet. If you are looking for a payment processor for USD, look into BitUSD, or even centralised alternatives like perfectmoney which is irreversible or Advcash. |
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NUFCrichard
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Activity: 1218
Merit: 1003
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April 21, 2017, 07:33:44 AM |
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I am not too worried about the USDT wobbling at the moment, but it is quite annyoing when I check the price of bitcoin.
I normally just look on Poloniex to see the alts and Bitcoin prices at once, now the Bitcoin price has little to do with the real USD price, so I have to go to Bitcoinity too.
I understand that these are 1st world problems, but I hope USDT gets back to dollar parity soon,
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