Bitfinex/poloniex is selling for dollars. For every USDT you buy, bitfinex/poloniex sell 1 USD worth of BTC and put it in a bank.
When you exchange the USDT back, bitfinex/poloniex moves the USD out of the bank account and buy bitcoin.
I don't agree with this, you got any source?
From tether.to:
"Tether Platform currencies are 100% backed by actual fiat currency assets in our reserve account. Tethers are redeemable and exchangeable pursuant to Tether Limited’s terms of service. The conversion rate is 1 tether USD₮ equals 1 USD."Here is what I think is a really good analysis of Tether:
https://np.reddit.com/r/Bitcoin/comments/6719bj/tether_announcement_about_their_banking_problems/This makes it much easier for the trader to move funds quickly between "fiat" and crypto, because the exchange is doing the job for you.
True, "fiat" not fiat. There are only two places where you can cash out usdt, Kraken and Bittfinex (owner of the tether ltd).
This will also delay the taxation of your profit.
You bought $1000 worth of ethereum on poloniex right after launch. Today the value is $500 000. If you move the $500 000 to your Fiat bankaccount, you need to pay tax of the profit.
If you keep the profit it USDT you delay the taxation, and you don't need to worry about the price fluctation of the cryptocoins.
I guess this depends more on where in the world account owner/ account are located.
Bottom line is do you trust a company that says we have $210,000,000 in our bank account just in case someone wants to cash out? Same company that had problems with international wire transfers? And lost 120,000 BTC somewhere?
Lots of OT but there is nothing interesting going on in mining so why not haha...
