* Anyone with good knowledge of how Centralized tether is?
* Is tether built on Bitcoin?
* What is the implications of building a Centralized (Non-transparent) Cryptocurrency on Bitcoin or other decentralized cryptos? Could be abused/over printed?
* Should non-transparent Cryptocurrencies be even allowed to exist without being regulated by humans (humans in this case are governments/constituted authorities)
I really don't know much about tether as I haven't found time to research it properly.
Tether is a cryptocurrency that runs on Bitcoin Blockchain.
It was built on Bitcoin's blockchain using OmniLayer.
Basically, Tether is a company, and when you buy tether, you are making a loan to that company, who promises to pay you back 1 USD for each tether you own.
I recently made a post about it, which I am going to quote here.
It's a Debt Security.
You basically become a creditor of that company.You are making a loan to Tether with zero interest rate. That's a pretty good deal for Tether. So you are borrowing money with 0% interest rate, assuming all the risks, as Tether may go the bankrupt and do not pay you back. Even so, there are a few advantages of buying tether:
- Taxes- You can sell your cryptos for tether and do not pay taxes (yet). This way you can postpone your taxes in many countries(according to your country legislation)
- Convenience- You can easily move your USDT around exchanges across the globe without any burocracy and faster than you would move USD.
This cryptocurrency is closely connected to Bitfinex, as
they share the same CEO. Bitfinex is one of the biggest exchange in the world. As they make a lot of money I believe they may have their Tether backed up, but I am looking forward to see the results of any real audit.
Be careful, as tether has never been audited. They may or may not have the money to pay investors.
