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RE: More than 1 million STEEM was withdrawn from Poloniex yesterday!
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.