Topic: Can someone explain Tether? (Read 88 times)
to my knowledge, tether (USDT) is a unique commodity combination between crypto currency and fiat currency, where the movement is determined by the price of the US dollar so if you want to have American dollars but in the form of crypto currency then you can buy this tether (USDT)
binance and the others aren't net USDT creditors. it doesn't matter to them (financially) if USDT is unbacked and loses all its value. in that situation, binance is still solvent since it still controls all its depositors USDT.
in that situation, it's the holders of USDT on binance that lose money, not binance. this is why kraken always had a USDT/USD market. they can't risk redeeming USDT for real USD because that would expose them to bitfinex counterparty risk.
in that situation, it's the holders of USDT on binance that lose money, not binance. this is why kraken always had a USDT/USD market. they can't risk redeeming USDT for real USD because that would expose them to bitfinex counterparty risk.
Binance is one of the main Holders of tether according to tether rich list. As they negotiate high volumes of tether, it's highly unlikely that none of that there is theirs. It's the same as saying they have no btc.
I think thats not even possible because they receive fees for each tether that is negotiated there.
the vast, vast majority of rich list holdings are customer deposits. just like the vast majority of BTC held by binance are customer deposits. if USDT loses all its value, that doesn't make binance insolvent. just like if BTC loses all its value, it doesn't make binance insolvent. in those cases, binance's customers are the ones who lose all their money because their holdings are devalued. binance can still fulfill all USDT and BTC withdrawal requests. your claim that tether's inability to pay its creditors means insolvency for other exchanges makes zero sense.
sure, binance takes fees in USDT---i'm sure they hold some amount of USDT as assets, and i'm sure it's liquidated very regularly. CZ is not a moron. they will only hold USDT (exposing themselves to bitfinex as a counterparty) for as little time as possible. if binance wants to hold USD, they open bank accounts lol. plus, if you're just talking about USDT trading fees, you're talking about their profits---losing some portion of their profits doesn't equate to insolvency.
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binance and the others aren't net USDT creditors. it doesn't matter to them (financially) if USDT is unbacked and loses all its value. in that situation, binance is still solvent since it still controls all its depositors USDT.
in that situation, it's the holders of USDT on binance that lose money, not binance. this is why kraken always had a USDT/USD market. they can't risk redeeming USDT for real USD because that would expose them to bitfinex counterparty risk.
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If tether does not pays his creditors, will Binance and those others survive?
That's a good question, I would like to know the answer to itbinance and the others aren't net USDT creditors. it doesn't matter to them (financially) if USDT is unbacked and loses all its value. in that situation, binance is still solvent since it still controls all its depositors USDT.
in that situation, it's the holders of USDT on binance that lose money, not binance. this is why kraken always had a USDT/USD market. they can't risk redeeming USDT for real USD because that would expose them to bitfinex counterparty risk.
Binance is one of the main Holders of tether according to tether rich list. As they negotiate high volumes of tether , it's highly unlikely that none of that there is theirs. It's the same as saying they have no btc.
I think thats not even possible because they receive fees for each tether that is negotiated there.
Tether (USDT) is a unique crypto that doesn't fluctuate like Bitcoin, because each crypto coin is pegged to USD, so the price is stable.
USDT can be used for online transactions and is the same as USD and is a good alternative to fluctuating Bitcoin, where prices will change quickly.
Tether is a combination of e-currency with Bitcoin blockchain security.
USDT can be used for online transactions and is the same as USD and is a good alternative to fluctuating Bitcoin, where prices will change quickly.
Tether is a combination of e-currency with Bitcoin blockchain security.
So I went to the Tether website and there is no way to buy or sell USDT for or to USD. Rather, the only way I see to buy it is to go to an exchange like Binance and use bitcoin to buy usdt. The only way to sell usdt is to sell it back to bitcoin on an exchange. Tether does not deal with USD whatsoever, not directly nor through exchanges.
Is this correct? because if it is, where is the USD that are supposed to be backing all these usdt tokens coming from? and how are they able to print new usdt at will - where is the usd coming from to support these new usdt tokens? Apparently there isn't even a way to create a wallet on Tether.io much less be able to buy or sell them for usd. https://wallet.tether.to/app/#!/signup
I'm really confused by this, please explain.
Is this correct? because if it is, where is the USD that are supposed to be backing all these usdt tokens coming from? and how are they able to print new usdt at will - where is the usd coming from to support these new usdt tokens? Apparently there isn't even a way to create a wallet on Tether.io much less be able to buy or sell them for usd. https://wallet.tether.to/app/#!/signup
I'm really confused by this, please explain.
the truth is that tether = bitfinex. mostly the same directors, and i believe there is a corporate/subsidiary relationship. that's why USDT can be redeemed for USD on bitfinex.
you can deposit USD to bitfinex and withdraw USDT to other exchanges. that's where the money is theoretically coming from.
regarding tether.to itself, i can't confirm since i'm in the USA and they don't serve USA residents anymore. but i read that after the banking troubles last year, tether.to resumed bank deposits and withdrawals for residents of other countries. their fee page lists a $20 fee to deposit/withdraw by bank account. either way, i believe most of the activity is derived from bitfinex.
the easiest way to think about it: holding a USDT balance is the same as holding a USD balance from bitfinex. they are both IOUs from bitfinex. as far as i know, bitfinex is processing fiat deposits and withdrawals normally.
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If tether does not pays his creditors, will Binance and those others survive?
That's a good question, I would like to know the answer to itbinance and the others aren't net USDT creditors. it doesn't matter to them (financially) if USDT is unbacked and loses all its value. in that situation, binance is still solvent since it still controls all its depositors USDT.
in that situation, it's the holders of USDT on binance that lose money, not binance. this is why kraken always had a USDT/USD market. they can't risk redeeming USDT for real USD because that would expose them to bitfinex counterparty risk.
I made a quick resume about tether here:
With Bitfinex you can deal with a USD/USDT pair and it's the only place. Bitfinex is like the unqiue issuer. Not something to be surprised about when you know Tether & Bitfinex have the same CEO
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If tether does not pays his creditors, will Binance and those others survive?
That's a good question, I would like to know the answer to it
I made a quick resume about tether here:
You can buy tether on any exchange that deals with tether. Mostly eth/usdt and btc/usdt pairs. I don't know if you can buy it with usd.
It's a loan, but tether is a company that is somewhat established and many investors trust they will pay those loans.
Tether is a company.
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. It's something like 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:
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.
Recently there have been a lot of FUD involving Tether (USDT), but I have not seen proper warns about the risks associate with Tether Exchanges, who are the Tether's Biggest Creditors (Tether Rich List).
If you take fast glance at Tether Rich List, you will see who are the biggest creditors:
As we can see, Binance, Bittrex and Huobi are the biggests creditors of Tether. And Binance is the biggest of them all.
I highly recommend you do not leave your savings on those exchanges, as they are like double-risk. You have the risk associate with the exchange, and the risk associate with Tether.
If tether does not pays his creditors, will Binance and those others survive?
Edit: Added Poloniex to the list.
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. It's something like 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.
Recently there have been a lot of FUD involving Tether (USDT), but I have not seen proper warns about the risks associate with Tether Exchanges, who are the Tether's Biggest Creditors (Tether Rich List).
If you take fast glance at Tether Rich List, you will see who are the biggest creditors:
| Balance(USDT) | Remark |
| 335,068,326 | Binance |
| 293,361,358 | Bittrex |
| 230,960,153 | Tether Treasury |
| 226,752,797 | Huobi |
| 159,111,273 | Huobi |
| 153,761,528 | Binance |
| 148,519,471 | OKEx |
| 125,427,504 | Bitfinex |
| 220,000,000 | Poloniex |
As we can see, Binance, Bittrex and Huobi are the biggests creditors of Tether. And Binance is the biggest of them all.
I highly recommend you do not leave your savings on those exchanges, as they are like double-risk. You have the risk associate with the exchange, and the risk associate with Tether.
If tether does not pays his creditors, will Binance and those others survive?
Edit: Added Poloniex to the list.
You can buy tether on any exchange that deals with tether. Mostly eth/usdt and btc/usdt pairs. I don't know if you can buy it with usd.
It's a loan, but tether is a company that is somewhat established and many investors trust they will pay those loans.
So I went to the Tether website and there is no way to buy or sell USDT for or to USD. Rather, the only way I see to buy it is to go to an exchange like Binance and use bitcoin to buy usdt. The only way to sell usdt is to sell it back to bitcoin on an exchange. Tether does not deal with USD whatsoever, not directly nor through exchanges.
Is this correct? because if it is, where is the USD that are supposed to be backing all these usdt tokens coming from? and how are they able to print new usdt at will - where is the usd coming from to support these new usdt tokens? Apparently there isn't even a way to create a wallet on Tether.io much less be able to buy or sell them for usd. https://wallet.tether.to/app/#!/signup
I'm really confused by this, please explain.
Is this correct? because if it is, where is the USD that are supposed to be backing all these usdt tokens coming from? and how are they able to print new usdt at will - where is the usd coming from to support these new usdt tokens? Apparently there isn't even a way to create a wallet on Tether.io much less be able to buy or sell them for usd. https://wallet.tether.to/app/#!/signup
I'm really confused by this, please explain.
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