Bitcoin Forum
September 26, 2018, 06:12:17 AM *
News: ♦♦ New info! Bitcoin Core users absolutely must upgrade to previously-announced 0.16.3 [Torrent]. All Bitcoin users should temporarily trust confirmations slightly less. More info.
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: How does Tether (USDT) keep a stable price?  (Read 59 times)
sand9999
Newbie
*
Offline Offline

Activity: 32
Merit: 0


View Profile
April 05, 2018, 03:35:56 AM
 #1

General demand and supply changes the price of Bitcoin, Ether etc.

How does Tether keep it stable?

Do they release new tokens when there is more demand? Or, do they buy back them when there is less demand?
1537942337
Hero Member
*
Offline Offline

Posts: 1537942337

View Profile Personal Message (Offline)

Ignore
1537942337
Reply with quote  #2

1537942337
Report to moderator
1537942337
Hero Member
*
Offline Offline

Posts: 1537942337

View Profile Personal Message (Offline)

Ignore
1537942337
Reply with quote  #2

1537942337
Report to moderator
1537942337
Hero Member
*
Offline Offline

Posts: 1537942337

View Profile Personal Message (Offline)

Ignore
1537942337
Reply with quote  #2

1537942337
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
minthit
Member
**
Offline Offline

Activity: 313
Merit: 11

Shitposter but don't read shit


View Profile
April 05, 2018, 03:51:55 AM
 #2

They said it was backed by USD and the number of tokens depends on how much USD they have. Don't know for now because there have been serious allegations against the organization.

kryptogunner
Jr. Member
*
Offline Offline

Activity: 252
Merit: 8

Community Builder and Telegram Moderator


View Profile
April 05, 2018, 03:59:46 AM
 #3

The intial idea was that they shall have usd dollar in deposits for every token that is purchased by someone. So on a day lets say A buys 5 tokens then they shall make 5 usd depoits in lieu of 5 tokens sold. similarly if A sells 5 tokens later and B buy 3 tokens , then there shall be an out go of 2 usd and accordingly 2 tokens which were created earlier shall be burnt. So in nutshell amount of circulating tokens at any given time is equivalent to usd deposits in banks.

But then you cannot ask a cat to take care of milk. transparency of operations under serious threat currently.   Lips sealed

Want growth hack for community or need 24x7 community managememt?

PM here or Telegram @meatulm
The Demon Slick
Newbie
*
Offline Offline

Activity: 182
Merit: 0


View Profile
April 05, 2018, 04:09:10 AM
 #4

With confidence, it works. Without, it fails. If we value it at 1 dollar, and everyone believes it's worth one dollar, and trades it as if it's worth one dollar, then it is worth one dollar. Btc is not backed by gold or fiat. Neither I believe is tether.
hugeblack
Sr. Member
****
Offline Offline

Activity: 462
Merit: 347


Avatar 4 rent / Sig Designer https://goo.gl/34QBYf


View Profile WWW
April 05, 2018, 07:01:09 AM
 #5

Although Cryptocurrencies have positive aspects, they’re pretty bad as a store of value(price can change 100 times every day).
Hence the idea of Stablecoins, which are currencies based on a stable asset (USD, gold,....etc).
Price volatility is an indicator that the currency is subject to the laws of supply and demand, which makes them vulnerable and volatile.
Tether (USDT) : Built on an encryption system known as IOU, redeemable for $1.
Then you deposit dollars in your bank account and you get a USDT for the same value 1:1.
Its advantages are stable price and less vulnerable to hacks.

kryptogunner
Jr. Member
*
Offline Offline

Activity: 252
Merit: 8

Community Builder and Telegram Moderator


View Profile
April 05, 2018, 07:15:11 AM
 #6

With confidence, it works. Without, it fails. If we value it at 1 dollar, and everyone believes it's worth one dollar, and trades it as if it's worth one dollar, then it is worth one dollar. Btc is not backed by gold or fiat. Neither I believe is tether.

I beg to differ with you on this. You are probably mixing up vloatility of a cryptocurrency with its valuations. Why USD is stable with respect to Bitcoin is beacuse there are much less supply and demand imbalances. That means there are almost equal forces acting to buy on falls or sell on rises. The underlying reason for linking Tether with USD was to control the volatility and provide a safe cryptohaven in case the general crypto market is in downward trend or may be you want to make some payments which are averse to volatility.

How much is USDT valued: 1 USD as it is asset backed, opoosite to BTC which is not asset backed.

I hope I could convey my message in a lucid manner.

Want growth hack for community or need 24x7 community managememt?

PM here or Telegram @meatulm
Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!