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This article is making the rounds. It’s well-written and makes a good case. And I should say up front that I have zero info about whether Tether really has 100% backing of every USDT.
However, a few thoughts.
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3
However, a few thoughts.
https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3
First, the crypto ecosystem has survived Silk Road, Mt Gox, the DAO hack, the Bitcoin civil war, the Chinese crypto crackdown of 2017, and countless BTC obituaries.
From 2017: https://www.bbc.com/news/business-38591929
From 2017: https://www.bbc.com/news/business-38591929
Second, the tech is real. Look at http://defipulse.com , http://epns.io , Zcash, http://starkware.com , http://ens.domains , NFTs, Uniswap, rollups, and all the new L1 chains just to start. There is genuine computer science here.
Third, the demand for decentralized and private systems has never been higher. It's apparent today just from the tens of millions of Signal signups alone. As usable crypto replacements for corporate tools become available, they too will be adopted. https://twitter.com/signalapp/status/1349577579091566592
Fourth, I understand but disagree with the author’s premise that regulation would make the system internationally trustworthy. Cryptographic proof-of-reserve is a far better approach. https://niccarter.info/proof-of-reserves/
Fifth, the amount of USDT printed by Tether is dwarfed by the amount of USD printed by the state. Even if USDT fails or is subject to haircut (eg 70 cents on the Tether), I think the abundance of printed USD will drive up the price of BTC in USD terms. https://www.bloomberg.com/news/articles/2020-04-23/when-8-trillion-in-global-fiscal-stimulus-still-isn-t-enough
Finally, it’s totally possible that there’s a price hit if USDT fails. But other stablecoins exist, and we've seen at least four 80-90% crypto drawdowns. Long term crypto people are in it for the long term, to advance freedom, privacy, and decentralization. That doesn’t change.
