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Topic: How can USDT be pegged to Dollar? (Read 410 times)

legendary
Activity: 1652
Merit: 1088
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September 08, 2017, 11:31:48 AM
#7
It isn't really pegged to the dollar. It's a token that's issued by a company, to help Bitfinex get round it's dollar banking problems.

Because they can't bank in dollars and have no licence to do any trades involving dollars, they allow people to trade against USDT "as if it were dollars".

But they're not real dollars and if you tried to redeem them for dollars you'd struggle (in fact teh conpany issuing them says explicitly on their website that they cannot be redeemed for dollars).
newbie
Activity: 131
Merit: 0
September 08, 2017, 10:55:02 AM
#6
Their model is to sell USDT and maintain a balance that at least equals as much in USD as they have issued USDT. In reality, there's no requirement for them to maintain a specific ratio and their model is built on trust. There are no third party verifications of their bank balances, even though they say they have audited balances.

They also have no banking relationships with US based banks so if you tried to actually convert USDT and withdrawal, who knows if it would actually work. I like their concept, but they have many challenges because of their banking issues.

So just release more USDT supply to control the price. Do they have a finite tokens supply or unlimited to match federal reserves' printing appetite in quantitative easing?

They can issue as much as they want. The current speculation is how are they being able to issue new USDT dollar for dollar when they have 0 banking relationships outside of Taiwan. This post goes into detail - https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87
Thanks for the post mate really usefull,Tether have a weird smell around ,i really like their idea create something that it's simple and in the middle between crypto and fiat b, but it's seems like a well created scam .
member
Activity: 89
Merit: 10
September 08, 2017, 10:40:29 AM
#5
Their model is to sell USDT and maintain a balance that at least equals as much in USD as they have issued USDT. In reality, there's no requirement for them to maintain a specific ratio and their model is built on trust. There are no third party verifications of their bank balances, even though they say they have audited balances.

They also have no banking relationships with US based banks so if you tried to actually convert USDT and withdrawal, who knows if it would actually work. I like their concept, but they have many challenges because of their banking issues.

So just release more USDT supply to control the price. Do they have a finite tokens supply or unlimited to match federal reserves' printing appetite in quantitative easing?

They can issue as much as they want. The current speculation is how are they being able to issue new USDT dollar for dollar when they have 0 banking relationships outside of Taiwan. This post goes into detail - https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87

I don't get it either, if it was tied to the USD the price and supply would have to be fixed.
sr. member
Activity: 276
Merit: 250
September 08, 2017, 10:05:28 AM
#4
Their model is to sell USDT and maintain a balance that at least equals as much in USD as they have issued USDT. In reality, there's no requirement for them to maintain a specific ratio and their model is built on trust. There are no third party verifications of their bank balances, even though they say they have audited balances.

They also have no banking relationships with US based banks so if you tried to actually convert USDT and withdrawal, who knows if it would actually work. I like their concept, but they have many challenges because of their banking issues.

So just release more USDT supply to control the price. Do they have a finite tokens supply or unlimited to match federal reserves' printing appetite in quantitative easing?

They can issue as much as they want. The current speculation is how are they being able to issue new USDT dollar for dollar when they have 0 banking relationships outside of Taiwan. This post goes into detail - https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87
full member
Activity: 448
Merit: 103
September 08, 2017, 01:49:34 AM
#3
Their model is to sell USDT and maintain a balance that at least equals as much in USD as they have issued USDT. In reality, there's no requirement for them to maintain a specific ratio and their model is built on trust. There are no third party verifications of their bank balances, even though they say they have audited balances.

They also have no banking relationships with US based banks so if you tried to actually convert USDT and withdrawal, who knows if it would actually work. I like their concept, but they have many challenges because of their banking issues.

So just release more USDT supply to control the price. Do they have a finite tokens supply or unlimited to match federal reserves' printing appetite in quantitative easing?
sr. member
Activity: 276
Merit: 250
September 07, 2017, 01:02:16 PM
#2
Their model is to sell USDT and maintain a balance that at least equals as much in USD as they have issued USDT. In reality, there's no requirement for them to maintain a specific ratio and their model is built on trust. There are no third party verifications of their bank balances, even though they say they have audited balances.

They also have no banking relationships with US based banks so if you tried to actually convert USDT and withdrawal, who knows if it would actually work. I like their concept, but they have many challenges because of their banking issues.
full member
Activity: 448
Merit: 103
September 07, 2017, 03:40:55 AM
#1
Do they take in USD notes and release USDT 1:1, just like acting as the federal reserves?

How else would they be able to peg it.
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