Does tether seem shady at all to you? I guess I dont really understand how a blockchain can make units available and unavailable as to be perfectly aligned with usd on multiple coin exchanges... Honestly I like your strategy, and from what I can see there are four options - buy usd on bitfinex, buy tether, buy golos gold, buy steem dollar - but again , aside from the first option - i dont understand how these units regulate... - Anyone?
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I don't know about "shady", but I'll admit there is some concern. Unlike Bitcoin, there's the counterparty element at play here. Holders of USDT and similar are banking on the counterparty to make good their undertakings.
Sure, they might be in the position right now. But what about the future? When push comes to shove, they will be taking care of their interest first and foremost. Obligations might only be partially met, renegotiated...or not at all where they abscond. Leaving holders high and dry.
This isn't "real US$" - regardless of what one may think of the US and other governments, they have real power and access to various resources. With US$, euro, yen and other fiat, holders will "get something" although the value might be less.
So, despite having some USDT, I regard this as just a temporary measure for the immediate and short term. After this I will either buy back BTC and keep; or send it to an exchange where I can sell for Malaysia Ringgit (because this is where I'm living).
Golos Gold... I've heard of that name before. Thanks for mentioning it. I will do some research and see whether it can also be a convenient and reliable alternative during moments of turmoil in the crypto market.
At the Tether website, the proponents/counterparty says all USDT is backed by the same amount in US$. There's also a link for holders and interested parties to check on this and audit.
All well and fine I suppose. But I'm wary when it comes to money. Especially in today's market where holders live throughout the world, as with the issuers and proponents. Should something happen, it's not like we can drive downtown to some office and demand to see some officer.
Be your own bank, as with the slogan at Blockchain.info (I think). When that's the case, WE have to make allowances for the security of out assets too. For now, USDT and its kind look okay enough. But I'd remain cautious and not place too much trust in them.
Yes - Lets say in the future BTC hits $8000 (or more) and then begins to crash - and by that time Tether has gained popularity - and so 20-50 BILLION dollars pour in - I just dont see how in the world they could immediately have those kind of USD assets at their disposal...
Doesn't matter if it's hundreds of million or billion US$ - if they really match the outstanding USDT with dollar (as they say they are doing now), the money will be there. But I do worry about the temptation to engage in fractional reserve like what the banks are doing. It might become 1 USDT might only be backed by $0.20 or so over time.
Yes, I agree - and how could a altcoin company suddenly have billions of dollars at their disposal - just because someone bought their coin on an exchange? Yes the fraction reserve thing is awful, but who is to say they wont just fold up and go home after 50 billion is dropped into Tether on a big crash day?
Thanks Ahmad, followed.