let's talk about tether
Simplest explanation
Bitfinex got hacked, took 37% of everybody's money to make up for it. They then replaced it with Tether tokens that they pegged to USD 1:1 so people could trade on the exchange with the token that represent what was taken from them.They have since made 1.25 billion more of those tokens and used them to to pump up the price every time it fell a little bit. They claim to have $1 USD in their reserves for every tether they have produced. They refuse to prove it, they refuse to exchange USD for tethers.
It's basically fake USD that can be used on a few different exchanges and they just keep printing them all willy nilly.
It's the $1,250,000,000 elephant in the room.
Quote:
|
huh? number go up! say more
|
The long version is that it works like this: You give me $1 and I will give you 1 tether, the exciting new cryptocurrency paradigm that's actually backed by fiat currency. Now you can spend your tether as a virtual $1 bill, because the value of a tether is pegged to USD. Also, the terms of service specifically say I will not redeem your tether for $1. Also, I can issue infinitely many tethers at a par value of $1 (that they cannot be redeemed for) based only on my say-so that I have enough USD to back them 1:1.
The short version is that it works like this: You give me $1 and