Topic: Tether: not even a scam - page 18. (Read 31056 times)

Tether has faced tons of problems with American banks, then what happened? Its value downed to $0.90, after some time its value went above $1.00. What is the thing determining its price? They would say one tether is always one dollar...

I am thinking of converting my bitcoin into tether right now due to the high price. Anyone knows where I can find the ANN thread for them here on bitcointalk. Wanted to see some discussions before making the purchase and risking all my bitcoins with it.

Yeah it really sucked how the $1 price went down just when I had a $3k in there >.<, I hope they fix this issue

Apparently, Bitfinex owns at least some of Tether Ltd. I speculate that they are the ones that started Tether, but they needed to gather investors in order to put up the huge buy and sell walls close to the $1 peg. So, probably miscellaneous private investors hold the rest. This information has never been made public.

That is difficult to answer, but from what I can gather there are several reasons:

1. There was a big FUD campaign when Bitshares first came out saying Smartcoins (then named bitAssets) would never work and their value would collapse, and that scared a lot of people away. Google Preston Byrne and bitUSD... his set of three articles were the most quoted "evidence" that bitAssets would collapse. But really those articles were just speculation, and after three years of Bitshares holding its Smartcoin pegs these detractors have pretty much gone silent. I guess they are starting to realize they may have been wrong (if they haven't already).

2. bitUSD had two competitors in the space. Tether and Nubits. Tether and Nubits had much more volume and market depth closer to the $1 pegs than bitUSD. They both put huge buy and sell walls close to the $1 peg. Nubits paid people to do so by use of inflation, and I guess Tether raised investment capital to do so. Up until very recently, there were not many market makers for bitUSD and the spread was much higher than it is today and there was less market depth. Because of the bigger market depth and smaller spreads, Nubits and Tether killed bitUSD as far as usage.

Then Nubits had a big collapse during the summer of 2016 where it went as low as $0.22, and ever since then Nubits has seen much less usage/volume. At this point, Tether is easily the most popular and liquid USD pegged asset. However, recently even Tether is showing some cracks in its armor. There is evidence that they are closely associated with Bitfinex, both of which are having monetary issues. It is showing in Tether's value which is currently $0.968, and has recently gone as low as $0.921. bitUSD has held a tighter peg than Tether for two weeks running. If Tether collapses just like Nubits did, then I think everyone will finally understand that bitUSD is the best solution.

Nubits, Tether, and Bitfinex's issues highlight that they may not be the best solutions, and they are both subject to many issues that bitUSD is not.

Nubits is like a "decentralized" federal reserve, which is still pretty centralized, prone to errors in judgement from Nushare holders, and more vulnerable to exchange default (among other issues.)

Tether is completely centralized, and subject to all of the downfalls that brings... subject to the Tether company not honoring the $1 peg (it is held only by a promise from Tether to do so, and if you read the excerpts from the ToS it is not a promise at all), subject to seizure by governments, and it is also more prone to exchange default (among other things).

bitUSD is completely decentralized and runs on free market principles. Also, recently due to market maker bots being made easier to use (such as https://btsbots.com/), bitUSD is slowly closing the gap as far as liquidity and market depth. Before market maker bots were only ran by a few individuals who kept the source code private, so there was not much market making going on.

Instead of typing up a long post of how it works, which I admit is difficult to grasp at first, I think this answer from Bitcoin's Stack Exchange is a good description. There are a ton of articles and videos on it. Bytemaster released this video in 2013 before starting Bitshares explaining how bitUSD would work, and it helped me understand. I still think it is one of the best descriptions: https://www.youtube.com/watch?v=-8ZJ3xTDwbI


Bitshares was one of (if not THE) first working smart contracts. The decentralized exchange and shorting/covering/defaulting of Smartcoins like bitUSD is all done autonomously by the Bitshares decentralized network and blockchain.

Who is behind Tether and who owns Tether Ltd?

I found that statement on what I thought was an official bitUSD page, but now I don't find it.
As you state, right now it is 0.05 lower.
If it works, why is the market cap so low?

After doing some looking online, I don't understand how it works. According to this video, https://www.youtube.com/watch?v=YD8i2Py9Paw, a bitUSD is made up of a variable number of bitshares, such that the value will always be $1. But that does not make sense, firstly it is dependent on the viability of bitshares, second, where are the bitshares coming from to insure a constant value?

If it's dependent on bitshares, then how is it not centralized?

Bitfinex is not the company to run a legit business. They don't seem to care very much about ignoring the stuff any diligent people would pay attention to. Stuff like their token issuing might have got the job done but probably flouted a million laws.

Your idea for the "ideal" digital asset pegged to FIAT requires heavy centralization and gateways. That defeats the whole purpose of cryptocurrencies and creating an ideal cryptocurrency ecosystem.

Bullshit. Bitshares' bitUSD has held a $1 peg since 2014 without any centralized authority.

Ummm... this is a half truth or you don't understand how bitUSD works. I'm not sure which one.

You can buy 1 bitUSD with $1 USD (plus a small margin for traders) on Bitshares' decentralized exchange. Since bitUSD's inception the ecosystem's dynamics have been heavily fine tuned and experimented with. Also, the market has since matured greatly with the creation of easy to use market makers bots (such as https://btsbots.com/), as well as privately developed and operated bots, which people run to automate market making operations for a profit. That has resulted in the margin of buying 1 bitUSD not being more than $0.05 USD for over a year now. As the market matures further, that $0.05 spread will eventually diminish closer to $0.

The only reason you would need to spend more than 1 USD (plus the small margin) is if you are are bullish on Bitshares' value and sought leverage to increase your trading profits by selling the BTS token during or after a bull run. Your statement that you have to spend $2 USD to buy 1 bitUSD is quite misleading. Possibly that was the intent? I don't know...

Clearly there was a lot of shadiness going on by the company, independent of its core business. I imagine that it is possible to run a digital pegged business without running afoul of authorities (tether, eg, adheres to KYC/AML rules). If it would not be possible, then it would be bad for the underlying currency (USD, eg)

I'm not even up for owning Tether. I've already tried trading it on Bittrex Exchanges but It has limitations. Regardless of the fact that It isn't a scam, The USD depo/withdrawal restrictions would slow down it's growth.  

https://en.wikipedia.org/wiki/Liberty_Reserve

the guy got 20 years.

usd reserves means centralisation which means the money can be frozen or seized.

that's the whole point of bitcoin. that can't happen.

There was no reason for nubits to succeed, I predicted its failure a while ago.

How does bitUSD make any sense? You have to put in 2 USD to get 1 bitUSD. The market seems to agree, less than $1 million in bitUSD.

I don't think its hard to have a digital asset pegged to fiat. As I pointed out, all you need is:

1. 1:1 reserves that are distributed in banks with insurance in different jurisdictions (including security of the bank)
2. third party audit of the bank accounts
3. security of the digital asset
4. agreement of the company to exchange digital assets and fiat, meeting KYC/AML laws.

None of the attempted pegs, including tether, has met these requirements. Yes, this requires a centralized authority, but it is impossible to have a pegged asset without one, simply because a trusted entity has to secure and possess the reserves. All attempts to use financial manipulation to secure a peg are going to fail, including the rolling peg idea someone posted.

On its face, a rolling peg idea doesn't make sense either. People want an absolute peg. If you make it rolling, it defeats the purpose.

what is libertydollar type prosecution, and what would be the downside of having USD reserves?

Tether ( USDT ) Will prolly crash to much negative news about this and who knows is happening behind the scene, also with lots of exchanges suspend USD deposit/withdrawals. I think Tether will be first to crash and exchanges that use this will take a hit, in particular bitfinex.

But we hope that will not happened since it will have a negative effect on BTC but as always it will recover.

bitbay this winter are doing one. http://bitbay.market/about/pegging/

this is what happens with a centralised peg!

More reason why I cant wait for Bitbays decentralised rolling peg this coming Winter.

Tether.to is a service that prides itself on a transparent company. For this purpose, a company publicly makes available its reserve balance. However, there is a discrepancy of millions of dollars between your reservations and the article number in circulation. One thing is certain, this is a very unusual situation. The company issues USDT tokens, which have their value tied to the US dollar. Currently, current liabilities are $ 42,313,582.47, which is a relatively high amount. However, its assets represent only $ 41,371,231.12. The difference between the two numbers is almost one million, which is marked on the page as negative equity.

BitUSD is still worth 1 USD. So far Bitshares is the only one that has accomplished parity for this long.