The Tether Quote Bank

He's at 15 years old and an intern at Tether.

But even if it's not done super well, even if it's just a copy of something like Tether, which used to be real coin, I'll take a page from tone there and call it real coin.

Exit question, what's your favorite Bitcoin USD option? Tether, liquid, coin-apult locks or storing USD on Coinbase?

I got it on me. No, none of the above. I don't use any of them. ... I don't trust any of them. I'll be honest with you. So I'm... I'm going to go with none of the above.

I mean, Tether's not bad, but I mean, you know, we'll see if leaps and bounds can be made from what they've achieved. I'm interested in the idea behind these dollar backed coins, but I'm not sure that we've gotten to the right one yet.

Yeah, but again, Tether's not bad, but I don't trust the regulatory environment. Right? Who's to say that? One of these days, you're not even going to realize that all your Tether has been confiscated, right? By the federal government.

Is Tether still coming? Yeah, Tether still around. I think they have their current market cap is about $5 million. ... So with Tether, it's hard to prove that they really hold those assets at any given point in time. It is actually a lot more centralized than our model.

I mean, it was supposed to be a way to get USD value around a place. And I think that other means like Tether, which is probably wrecked to right now, you know, were kind of invented in order to get USD value around.

I think sadly the main problem is what are they using to counter party the Bitcoin trades in the problems always been getting to usd if you had something like tether which was a usd coin I could see how it an exchange could exist independent using that coin but then the problem is that coin is pegged to a bunch of stuff and very not independent and may have a breakdown who knows about tether.

now the crazy part is what's happening with tether right now because Kraken has the only tether to us the listing and it's always been one to one and you know Josh you will agree with me on this that neither one of us had ever thought it should have been one to one because there's inherent risk in tether especially the fact that the cash is just sitting there in a Taiwanese bank

people looked at tether and said wait a minute they they're using pretty much the same banks as Bitfinex does so if Bitfinex is having all these problems tether is either about to have these problems or already is having these problems

regarding the tether stuff I'm not entirely sure what I think tether ought to be trading at in terms of a discount because the thing about tether is like it's hot potato we all know it's hot potato at some point tether is going to explode it has to

yeah so first of all you know say that I do work for i4nex incorporated I do not work for tether but I can address some of these issues

i don't work for tether but i will comment on it before i came on air i did speak to the tether team and i tried to get some certainty the timeliest banking situation only affects foreign trade so it only affects the wires going internationally it doesn't affect domestic transfers so there is shared ownership between the the tether and i4nex they have similar corporate structure in their own by some of the same people and as a result tether bank in ty one the same as i4nex do

so when tether issue that tether tokens they back it to a usd in in their account and when that usd tether goes off to plyon x or it goes off to crack and it gets traded over there it comes back to to bitfinex and then bitfinex will settle it one for one in theory minus fees and then bitfinex will send the usd equivalent back to tether's ty one is back

there's some risks I think um that whole tether story with BitFinex that that's starting to worry me a little bit more uh we'll we'll see if that um changes the equation a little bit um they they have them printing an awful lot of tether whether or not that's actually backed by dollars is the real question

I'm starting to get nervous about the tether issue and uh I really don't care what the people involved in tether think uh this is my opinion and I know there is like huge opinions on both sides

so the recent article by BitFinext is this one I mean I read the article uh I thought it was a good read now I don't know if this is fun I don't know if this is bullshit I mean a lot of people uh consider BitFinext as a troll that he has an agenda

like to me like I don't know if tether has every i don't know if tether is fractionally reserved or not uh every single dollar of tether could be sitting there at a bank right the question is what bank and i believe there is a nice bounty out there to find out what bank uh now suppose it's a bank suppose it's a Taiwanese bank like a lot of us suspect and like a lot of us were told it could be any bank to me tether is egold i don't see a difference between tether and egold right

i'm not going to speculate what a tether is a scam or not i mean that that i don't know i don't have the info you can argue with bitfinex over that i'm gonna i'm gonna play devil's advocate and say tether is all on the up and up but then it's equal so so that you like you can't win that argument against me

tether was hacked for more than 31 million of its digital tokens and they have a solution they're going to roll back the tether chain to get rid of the hacker. Is this the new solution for all cryptocurrencies and how does this relate into our topic last week when tone waves was saying he worried about tether was uncertain of the number printed and the bank accounts other potential solutions. Was this just an attractant? Are we just talking about tether every week? Go ahead, Tom.

Now when people need to realize that tether is a centralized coin and I have a huge problem with tether now I'm not going to I'm already getting like getting the huge fights of a tether with people I used to like. ... but I never cared about tether when it was 10 million 20 million 30 million. But now it's approaching one billion and I know exactly how tether is going to end

So to me, Tether is a really, really dumb project. It's a project with people's heads in the sand because the government is going to come smack the hammer down and they know exactly where the money is sitting and that's me, you know, going against Bitfinex and all of his research that says the money is not even there, right? So I will assume that the money is there and I think that if the money is there, it's probably worse because the government is going to show up and it's going to take the money

Well, so I did do an interview with Diffin X earlier this week with Tone and that was one of the weirdest sort of things that I've gone through. I think Tone and I have been talking since then, we're like, what did we get ourselves into? What is this thing? Because, you know, I honestly hadn't looked too much into it until that interview.

Like whatever happened, if you compromise a three or four, you either have terrible opsec, the hacker is really good, in which case they can do all kinds of things to you that, or you have some mold in your organization. None of those things are good. So it tells me that this is not a good situation.

Well, no, I'm not saying it's going to cause a correction. I think a tether blow-up would be the greatest thing for Bitcoin ever.

Exit question, the price of tether will remain at $1.00 a coin or a fall to zero.

But again, let's not say that this isn't anything new. We've warned you about Tether from the beginning that it required trust, that it required USD funds to be held in a bank account to the matching amount of Tether, and that this reminded anyone with half a history of the gold, what are they called, gold cards or whatever, gold tickets.

They give them a piece of gold, they give you a ticket. You come back, you trade your ticket for the piece of gold. The only problem is they always printed more tickets than they had gold. Certainly I'm not saying that happened in this case.

We don't know anything about the insides of Tether. We have no insider information here. But it did seem from the outside recently a lot of people became worried about Tether. As they noticed, they were printing millions and perhaps even more dollars at the low.

Now of course the conspiracy theory being run by the mainstream media is that it's actually been Tether propping up the Bitcoin price the whole time that through strategic buy and sells the Tether people had driven the Bitcoin price up to 20,000. I don't think many Bitcoins will believe that, but I do believe that's what will be floated in the mainstream media.

And from my basic understanding, Tether has dollars in a US account or in a bank account somewhere and that they're linking their coin as a stable coin. One tether is supposed to equal one dollar and in their account, they're supposed to hold X number of dollars matching the X number of tethers in the world. And this was a cool idea for a long time. It required trust though. We always warned people we said it requires trust.

Tether took these same problems of Coinbase and expanded them to an altcoin. Tether became the altcoin that was linked to Fiat, which is a very dangerous idea as we're seeing today as the old system is now engulfing tether looking at their business practices wondering if they have printed more coins and also just wondering what they're doing in general.

A lot of people have been critical of Tether. The idea itself is very easy to be critical of and then now that they've at least confirmed that they dissolve their relationship with their auditor. That's not good news. Not good news.

with this all going on people don't realize that this is gonna happen in in such a new trading market. This is, we're talking about the beginning of the beginning and for those who are just getting in on this, they have to realize that this is gonna be happening, whether it's big connect, whether it's hex raccoing, whether it's USDT, you have to do your own due diligence

And now tether seems to be crumbling all around us, losing their auditor, receiving us a pina on December 6, which was strangely reported by the media a month later. And now, many are saying they printed too many tethers at the low. There's too much money tied up in tether, and it could wreck the entire Bitcoin market.

Yeah, it's so funny that some single troll can just cause so much chaos, but this is the age we live in, the information age where a single tweet can change the world. So yeah, at this point, I think tether has been commented on enough.

I'm not, I have not been and never will be too much worried about tether because again, it's temporary, it's a temporary solution just like Coinbase. ... It's an evident ability that at some point, we won't need tether

So there is lots of exchanges out there that do support USDT, right? Tether. But do you actually need it to trade? Absolutely not. We were trading crypto's thousands of cryptos before tether ever came along.

I did write a somewhat negative piece about tether in Forbes, I think in the middle of last year maybe, but it was, it was a reason is different than what we're hearing today about like how they might be insolvent or something.

My main criticism was like the US government or probably not many governments around the world are going to let tether exist if they're unable to, I mean, I know they do KYC and AML at the entry and exit points. I just don't think they're going to allow people to like move tether between accounts without some real world identity being attached to it.

That's why I called it like a ticking time bomb where I think they'll eventually shut it down and maybe people will have to like, you know, like they had to do with Mt. Gox where they had to wait years to get their money back

But in terms of this like stuff that, you know, Bitfinex posts about, I've never really bought too much of what he's had to say. It all seems very conspiratorial. Obviously, I'm not here to like endorse tether and say that they're, they have all the dollars to back their coin issuance.

But yeah, in terms of all the noise around the tether token, the only thing I really look at is the price of the tether token and it's still around like 99 cents in change. So I mean, that's, that's probably the best indication of what's going on behind the scenes there, I would think.

So what do you guys think? Was it BitFinex? Was it Tether? We had this problem last time when the price of Bitcoin spiked to $1200. We were really excited at the time. Afterwards we found out, allegedly, it was two trading bots on Mt. Gox, the Marcus and the Willie bot

This article was written by crypto medication. He posted it to medium. Medium is a website where anyone can post articles. So this is not like a Bloomberg or a New York Times article. The information that he's presenting to us in here may or may not be true. We don't have any other sources on this information.

They printed 600 million tethers two days before news of the subpoena dropped. So once again, once you let people print money, they will start doing it in a manner.

The Tether thing is pretty creepy all around. It's always been creepy. It's always been from the idea that okay, it's locked to a dollar so we have a bank account somewhere with a bunch of dollars in them. So if I come and seize that bank account, now you have a worthless altcoin.

So it seemed like a recreation of Liberty Dollars or E-Gold where there was a centralized server that you could just go and claim. And it never made any sense. I don't know why people were into it. I know why they want a stable coin.

I'm still not seeing a smoking gun connecting them to tether and bit for next. But there does seem to be a lot of information here, different people, digital currency group, they control all the other groups. I don't know, it's getting pretty conspiratorial here.

Okay, so that sounds really rough. I think this guy has the juice. As opposed to the other article which I tried to read, this guy has a much better task on it. He's looking at the information purely from the outside using algorithms to analyze the data. And he's found some strange things in the data. This paper was just released today June 13th.

So bad news for Bitcoin again, 6,176. We are continuing to decline. People are freaking out about the tether news. They were mentioning in the chat that a Twitter user named BitFinext had been telling about us about all of this for years. I want to go and give him a shout out because he was totally right on all this bit for next stuff and they banned him and they mocked him and they chased him around.

It kind of pisses me off because I never liked tether, I never liked stable coins, I like Bitcoin and people are always printing coins and attaching them to Bitcoin and I don't know that the usual suspects are the guy that he accused did this or that bit for next did this or whoever did this, I disagree with you doing this. I think this was bad, man. I don't like it.

I also want to say that as Tether starts to self destruct, which is definitely happening, was already planning on USDC. So they're going to do this again. They're probably going to do this again at a larger scale and with bigger players. So I don't think it's a good idea either.

Bitfinex, Tether, Cracken, Barry Silver, Owner of DCG, Roger Ver, Eric Voorhees, and the CME, and many other actors in the market appear to be all connected together and complicit in market manipulation of some sort.

I can tell already because it speaks pretty well about the involvement of Bitfinax and Tata, Roger Wehr, Barry Silverton stuff with international drug trafficking and washing money with all the biggest exchanges.

First of all, let's dismiss what University of Texas says. I have no interest in what these academics have to say. It's almost laughable. It's like Paul Krugman's and all these guys. No interest in that stuff. I don't believe for a second that any market was falsely anything.

In this case, I read this entire report this morning, which is very long. If it's true, and I'm guessing that a large part of it is true, fantastic investigative journalism for one. I have one word in my mind for what I think BitFinex is, which verified in spades what I had initially heard about it and that's in run. There's clearly unbelievably shady things going on there. But there's no way of proving exactly what is true inside of that article and what is not.

Tether is not fractional reserve. Tether is this shady company, which is at all kinds of problems in Hong Kong, no less, with no regulation of any kind is supposedly without auditing through this shell company Polish bank that has no assets is supposedly holding hundreds of millions of dollars and has the authority to make or break these tether tokens like the print them or get rid of them. That's not fractional reserve. That's just insanity.

So what I'm going to do is I'm going to try to explain what Tether is. And I'm probably going to do a bad job. So jump in and correct me when I fuck up. So, Tether is a cryptographic token created by the Bitfnix Bitcoin exchange.

Now, of course, that's very similar to the fractional reserve system we have now, which is actually completely legal, unlike, you know, tether if they're doing this. But if they, if, you know, if they're faking having these bank balances, then obviously that's a problem because then that, that means that they're creating money out of thin air. And so what I think, when I heard about this, I thought, okay, well, that's a definite vector for fraud.

I'd probably again, you know, you talk about flipping my views all around, I would trust the Goldman Sachs token more than I would trust the Bitfinex darken because at least Goldman Sachs is a regulated US company. ... But yeah, no, I wouldn't trust Goldman Sachs either.

I just wanted to say this, just just to quickly extend on what Andy was saying, any fraud in tether and Bitfinex is so, you know, in proportion to, you know, how it relates to Bitcoin is so incredibly minuscule compared to the fraud in traditional. Old finance that is absolutely systemic from the very core of its entire existence its basis on central banking.

I'm going with a prediction this week. I predict that tether will implode within the next three years.

And frankly, I don't believe for a second that the Bitcoin price was taken up because of tether. I think that's a small part maybe. But it's just one, look, it was a massive bull run and every imaginable force on earth was buying it.

Six months after parting ways with his auditor, Tether has finally produced a third party report proclaiming that its cryptocurrency is fully backed by US dollars. However, Tether was unable to locate an accounting firm to do their report. Therefore, they released an audit, so-called audit, by a law firm.

As Tether says, the barriers to getting audited are simply too big to overcome right now, and not just for us. ... As a CPA, I understand that. Interesting.

It also seems like they cannot confirm that the account is held by Tether. As it says here, for example, it said that the account where the cash is held is in the name of A trustee and that it could not vouch that Tether had any enforceable agreement with the trustee. So someone is holding Tether's money. We don't know who it is and we know that Tether doesn't directly control them.

Tether claims that they're a fully backed crypto asset, but they had an audit done by a law firm, not an accounting firm, and they claim that it's impossible to get an audit done by an accounting firm because they don't understand cryptocurrency. I'm not sure if I believe that one. That seems pretty questionable.

Now, Tether claims that their assets are complete and intact but cannot be audited because no qualified accountants exist. Therefore, they have released a report by a law firm that vouches for their deposits on the date of June 1st and the date of June 1st.

Satisfied. Well, that's a hard question to answer. You know, nobody knows what's going on. Even the lawyers involved in this situation ... Friedman LLP they specifically say that they're going off of the information that they got from Tether themselves and their lawyers.

And it's also understandable that Tether can't find a damn auditor because it's such a risky thing to do and super expensive.

You know, Tom Sinai before the show we're actually speaking about Tether's business model, Tether's profit model. And we determined that the main, obviously, the main function of Tether is to provide BitFinex and these other, you know, the ecosystem with some fiat liquidity that isn't subject to the laws of moving fiat around.

The money's there to begin with. So it's not like they're issuing them out of nothing. People are paying them Bitcoin or another alt. Then they sell that and then give them Tether for it. And then they put the USD in their bank account supposedly. Now, of course, it's real easy to just skip that last step and keep all of it. But on the other hand, you don't earn the interest that way.

Right. Well, when we could go on the show, we talked about the tether report from the anonymous crypto medication. Again, this is an anonymous guy writing about all these, you know, doing some journalism, but you don't know what his angle is and you don't know how much of it is true.

And my answer was that I never really paid much attention to tether because I don't think it matters to Bitcoin. But when I read that report, I said, wow, that is ugly. I'm sure some of it is true. There's no doubt that Bitfinex is as big of a scam as anything out there.

Even this so-called audit is in a real audit. And as we talk about, it's a black box. No one has any idea what really goes on there. But that said, they did have a, a prominent law firm come out and say, yes, they have the money that they say they have, which is fine with me.

I don't believe for a second that tether made the price go up or that tether has made the price go down. But what I do, I do believe is that it's not really as big of a story as people like to make it out to be.

And again, this is again about personal responsibility here, people. There are third parties making accusations about third parties who've confirmed things about third parties. This tether story has kind of jumped the shark here for me.

So for me, it, great. The pseudo auditor said it's cool. That's cool with me. I'm not a trader. I advise people not to play around with tether whatsoever. Just hold your Bitcoin and pound that like button, everyone.

Totally a function of the market size because there's that much liquidity out there so people can push around the price that much. Once it gets bigger, it'll be less volatile and nobody will be talking about stablecoins. So, it's a useless stupid dream.

And like what Gabriel says, it's the whole concept of the stablecoin thing is just it's so bastardizing taking dollars and turning them into something far worse and riskier. ... Like I think the whole stablecoin thing is going to go away in time. And I think the whole tether thing is going to go away in time because it really has nothing to do with Bitcoin.

So what happened on Sunday night, approximately a week and a half ago, I got a call of Sunday night that said that Tether was trading at $0.80 on OTC markets. And so people were starting to become very, very fearful. And the week before, the week before, they were trading at $0.97. And so there was a bit of a slow lock of faith in Tether.

And what we saw was something like a small bank run. And so Tether's started trading around on the exchange prices. something around 90 cents for a whole week. And so people in China, particularly in the Asian markets, were scrambling to get out of the tether thinking that the whole thing could fail.

I may be tethered that in the past or maybe they fudge a couple of spots and that's why it's hard to get an actual company to audit them. They've also had bad press which makes it so that I don't think many companies want to touch them.

Like you could have been on Mars and you would have known there was a problem with Tether and Bitfinex. You could have been beyond the Kuiper Belt and known that there was a problem with Tether and Bitfinex. So that is the market working very well in a very deregulated, unregulated crypto environment.

You cannot honestly look in the mirror if you even know anything about the crypto space and say you didn't suspect there may be something going on and maybe you shouldn't put your life savings into tether.

I have a question for the room. Does anyone read this document in full and then not think to themselves, this is a manufactured crisis? The salient question to me is why did crypto capital, why were the funds seized? There's been no coverage of that for some reason.

So, you know, I listen to this call conversation about Tether. And to me, it's completely uninteresting because Tether's not, it's just another financial system that has nothing to do with Bitcoin. It doesn't have the security model of a Bitcoin.

I know it's a very different perspective, but it's tether. It's just some crap that people made up to move some money around. It doesn't have the security model of Bitcoin.

And this is I think where Nick was getting in his, you know, I know one of the things that Nick feels strongly about and he said really good points about this in Honeybattery is like, we should demand full reserves and stuff.

I do agree with Eric that this is not Bitcoin and it doesn't affect Bitcoin security model, but it does affect Bitcoin's price discovery on the market and regarding Tether, it's, we've seen some of the most important exchanges in terms of volume. They do rely only or mainly on feather.

exit question a few weeks ago when Bitcoin bottom, they printed yet again an enormous amount of tether allegedly taking US dollars, putting them into Bitcoin, holding the Bitcoin in the tether allegedly, maybe just printing the money. Will we look back on this later and say that the tether printing was the resultant for the Bitcoin price just like it was last time?

I do think that with tether, at the end of the day, they're audited. If they can be audited, then you've got to put a little bit of trust in that. I know that's against the ethos of not having trusted third parties to Bitcoin, but not everyone requires that specifically for whatever their means and uses of daily activities are.

Yeah, I mean, the thing is, even if they're audited, it's no good because those auditors can go in and say, oh yeah, there's a, you know, to, you know, $750 million in that bank account. Okay, good check. What they can't do is go to the bank and order the bank to see how liquid that bank is.

We'll see how this goes, but I do think it's very likely that once again, we look back and we say, oh, the halving was great and oh, adoption was great. No, we all waved our flags and tried really hard. But in the end, those sneaky bastards printed millions and millions of dollars and basically did what the banks just did to the rest of the market.

It's the ultimate forgery to be able to just create a token, you're effectively forging the US dollar which comes with a massive jail sentence, but it's kind of this obfuscation, it's removal by saying, well, this equals a dollar and everyone treats it like a dollar. So, you might as well forge these dollars, which is pretty much what they could do. I'm not saying they are.

We've been talking about this for years. Nobody ever thought tether was backed by anything. At one point they did prove their accounts, but it was a snapshot. It wasn't a live proof. It was like a oceans 11. It could have been a completely different video. Then they went on and just kept making more tether and selling more tether.

I read somewhere that they had a there's a presentation with a pie chart in. It shows that 30 billion was in commercial papers. That's proof. They've got a pie chart. ... I'll take the word from it. I think the rest is backed by thoughts and prayers. Hashtag thoughts and prayers.

I certainly would not. Look, there's multiple things here. The biggest problem isn't that tether doesn't have the money. The biggest problem is that we don't know if they have the money. This is for me that the hardest thing about tether is that we don't know.

And not only that, you have this dangerous concept where tether cooperation can just print these fake money, which is actually counterfeiting money in a way because they're just saying, well, this is equal to one dollar. Like this is one dollar. And you're like, if I made a one dollar note, I would be arrested.

And this is why we're building the standard is to build really a way to have stablecoins that are fully backed by crypto or by gold. And by real assets stuck in smart contracts that you can, that everybody can audit

So, you know, they claim they have 40 billion dollars in bank somewhere in a bank somewhere to account for that money, which is just, you know, probably untrue, like 99%, 99.9% a chance that that's complete bollocks.

You'll be doing the future, a good service, you won't be pouring more money into this big empty Ponzi scheme of a system, which which could implode and could have a really negative effect on Bitcoin and the ecosystem and in fact, entire economies.

So people need to be able to trade and have some sort of stable medium of account to exchange with. But they couldn't do it with the regular normal dollar. They weren't served by the regular normal dollar. So this solution filled that void, a very hacky solution filled that void. Because it was ignored.

I said, I don't think it will happen if years, because I think if they're clever little beans, they're using that fear that they've actually taken in to buy Bitcoin and they're utterly stinking rich from the Bitcoin. So it will never collapse because they're absolutely loaded on the on the on the corn.

They were lucky. They bought it at the bottom and Bitcoin's gone up way more than when they bought it. So they're sitting pretty and that's why they're being called the BlackRock of, you know, they're up there with BlackRock.

the reserves were not all in cash and all in a bank account titled in tether's name at all times as tether represented in the order it has always maintained adequate reserve reserves and never failed to satisfy a redemption request.

so that means that these reserves that were supposed to be one tether to one dollar were in some other form then cash could have been the guy what are the CEOs bank accounts could have been the steel was somebody else's name it was like having they couldn't buy enough Bitcoin under the tether name they had to use another account

now some would say that tether now because the I'm guessing the moment that they weren't back fully was the moment when they bought Bitcoin on the dip and it was a huge dip I think it was after 2007 after it went down like crazy and then they bought it right down near the bottom.

Absolutely genius move for sure but extremely reckless extremely reckless and if they had had a tether run at that moment they wouldn't have been able to cover everything and and that would have been it but they did they did it it went back up as Bitcoin every time does and now they're way over collateralized I'm guessing because they're not very transparent.

The Fed has to put up with Bitcoin because there's no way to shut it down but tether can be shut down same with usbc usdc same with all of the other usbc same same with same with all of these other centralized stablecoins you don't really need to the government doesn't really need to do much they can just say no it's illegal now and stop all trading on it

This allows people to hold in quote marks USD on an exchange so that if they're nervous about the price of Bitcoin or alt coin or whatever they can duck into USD and then feel safe but this all again relies on an external system an external system that apparently is making the tether company 1.48 billion dollars.

Well they're gambling with everybody's funds that's how they're making so much money and that's why it's extremely dangerous yet they're winning. But gamblers are gambler and gamblers you know the house always win not the gambler.

Remember when it crashed right right near the bottom they pile up everything back into Bitcoin so they took their deposits once it's meant to be $1 in the bank for one tether and they pile up on Bitcoin Bitcoin skyrocketed up and did a huge big moon bump

Just quickly, Dan. I do want to push. I do want to push back on the comment that you said that they're gambling with other people's money. They're not. If you look at the terms of use, you are buying one. You were 10 USDT. So you're buying the token. Once you've handled that money over, that's their money now. Just like the banking system, when you put money in the bank, it's their money.

I mean if they're backing their USDT supposedly with US assets or even if they're gambling with it you know the moment the rest of the financial system breaks which is what we're anticipating. That will be the end of USDT and if you're still holding USDT when that happens it's as bad as having had that money in the bank

So there are other things that are going on behind the scenes but you know this article must be particularly sickening to all those people have been predicting USDT is demise since the beginning of time I mean there's been plenty of them around I know what eventually they'll be right and it'll happen you know it'll happen when the US dollar it goes down

And of course, as everyone knows, on a long enough timeline, all stable coins lose their peg.

It's the best but going back to tether and Bitcoin I think that this is it's good for Bitcoin and it's good for tether but I'm not crazy about how tether got the money. It seemed to me if you go back in time tether said they had US dollars in an account equal to the number of tether that there were being printed. But in actuality tether took that money in the account and used it to bet on Bitcoin.

but it's another example of once you give someone your money like Dan said with SPX and FTX they can do what they want with it whether your money is Bitcoin or altcoin or dollars or whatever you put it in their account you expect FTX to have separate accounts. You expect tether to not go gambling with the money but it always seems to happen you just can't trusting third parties is consistently a mistake

Well you know the famous expression they close the barn door now that all the horses have gone and it's great for tether to be audited now it's great to have it in accounts now after you've taken customer funds and made a giant bet on Bitcoin like a roulette wheel we talked about gambling before.

They won their bet and now as far as I know after you make a big bet and win it you don't really need to make another big bet they can kind of keep coasting on what they have and this investment at Bitcoin seems to be part of that cost so I think it's going to work out for them I'm positive

and although they're they're audited as Josh pointed out last week there's still the ability for them to have contracts that they're essentially load out the money

And he was saying that it's an uphill struggle because everyone just, everyone who would use digital currencies, they just used Tether because it's stable and subsistence wage people just needs stability. So I feel like, I mean, everyone always, and like, we always kind of assumed how that would implode in on itself and it never did.

The good thing about Tether is it works. And it's been working for years.

the reality is like a large portion of the world already used tether and find it very useful in Lausavane, but unbanked folks used tether the sorts of people who traditionally the US would have wanted to get print a dollars in their hands, they used tether. And every time we try and go into some of these unbanked regions and get them to use Bitcoin, the price and stability is too much for them to end up just using tether.

I saw a tether come out I saw these other stables come out and say, oh great, you can sell Bitcoin for your portfolio, hold it in something that matches up to the dollar. Why would I want that? That's not what I got in this for. That's not what Satoshi is about. But remember that the market has spoken and Tether made like billions and billions of dollars. So it doesn't matter what I think. People clearly want stable coins.

But anyway, I think it's interesting that they have, like for instance reserve requirements on these things, which is really important because if these stable coins become so massive that there's trillions of dollars, They're centralized. The circles totally centralized. They same with Tether and all of these. They say they have so much in reserve and we have to trust them. And this is exactly how facturized banking started.

Because in the financial industry, you can say we have this much in the bank, but the thing is the bank can be in fractional reserve legally. So what does it mean? How do you prove what assets you have backing all of these tokens that are flying around?

And the thing is that Tether made a massive bet, which could have gone so bad, but they made a bet that made them so insanely rich and over collateralized that it's not even funny. They took everybody's USD that was backing their stable coins and when Bitcoin was at its low, when everyone was saying sell, sell, sell, Bitcoin's you know, back in its, and Bitcoin's finished, it's over down at like 10 grand or something, they went and took all the money and put it all in Bitcoin. I don't know, maybe not all, but a lot of it.

The thing with tether is nobody really knows the structure still, which to me is so freaking amazing, phenomenal. It's so cypher punk, even though this is a centralized thing. No one really understands how tether is structured, where they sit, where they're domiciled, they're legally structured.

ironically full circle, no pun intended, but that is the 1984 CBDC. That is, that is everything that you feared, like as a Bitcoiner and talked about, literally they can do it, you know, and it's just creeping up on your funds are frozen, your funds expire next week if you don't, you know, spend them.

We still have the one more issue about Tether. It just sounds interesting to me. They're opening the United States. Tether continues to march forward. I just they have so much money. They're buying treasury bonds. They're buying gold. They're buying Bitcoin. They really are the snake that has eaten itself and just got bigger and bigger and bigger.

Stable coins. I'm famously wrong about Tether. I didn't get it. It's a huge company now. One of the biggest.

And I'm certain that this is at least in part because the people that run Tether are Italian, right? So to get a chance to buy it would be like if you grew up in New York and you get a chance to buy the Yankees. That's basically what this is.

And it happens so that because bond rates are so high, because interest rates are so high, a company like Tether can make enormous amounts of money just holding US Treasuries, short-term US Treasury bonds that are 3-6 months in nature. And they make so much money off of that. Because they have over a hundred billion dollars in assets under management and they get 4% 5% on that. And that's 4-5 billion dollars every year. That's how you get 50 people doing that.

The big story for me with regard to stable coinds is this is what a free market banking solution would look like, were it not so regulated by government. And Tether has like 50 employees. They have a bigger market cap, I think, than Goldman Sachs and other banks.

Well, not with it, my bubble, but I do understand that a large part of Latin America and the Middle East and pretty much a lot of the places that actually need Bitcoin are turning to stable coins and using them for daily transactions. And they're sort of eating our lunch and it's super ironic that Bitfinex Tether is funding a bunch of Bitcoin companies but at the same time they're not supporting grassroots adoption too much except if it's for Tether.

Is it censorship resistant? Like Bitcoin? No, it's not. Can it be confiscated? Yes. Is it really stable? No, we have seen lots of these algorithmic stable coins and projects that went down. Terri Luna was like three, four years ago, I lost count. I'm not saying that it's going to happen to Tether even if everything is possible.

I agree, Jenny. Tether is some kind of a business miracle, especially when they bought heavily into Bitcoin at the bottom, perhaps even using their reserves against the rules.

Well, I married an Nigerian. I live in Lagos right now. And so I've been able to understand this a bit more than I did previous just because I'm around folks who use USDT quite regularly.

If you've got 50 bucks and that's your entire savings and the price of Bitcoin is fluctuating like it does, you may not want that sort of volatility. In your little savings account, so to speak. So I think it makes sense. And the dollar has name recognition.

As Josh says all the time, whenever he's here, Tether made big bets on Bitcoin at the bottom of Bitcoin, big risky bets that might have included some customer funds. Nobody knows. And they did very well. So if you make big bets and win, no one cares. If you make big bets and lose, that's when they all come for you.

Yeah, if you're not a start your own stable coin, basically you own your own bank. And that's a lot, it's a lot easier and cheaper to own tether than it is to run a gigantic worldwide bank with all these regulations and offices and physical locations and stuff. I mean, the what tether is worth is incredible.

America's but but hey up until proven differently. The world has chosen tethered by. Overall, the stable. It's still is a number one stable point.

But as we know, tether has billions and billions of dollars now. So we are hugely wrong on that. What Maister's saying, other countries using tether, people using tether and other stable coins for business is apparently happening all the time.

But what seems to have succeeded against all Bitcoin or dreams is tether. And these other stable coins are now we're seeing legislation being made, which as we all know will create a protected environment where companies like tether will continue to thrive

It's strange for all the technology and all the work put into Bitcoin, what people really want are these stable coins. They want these dollar backed coins. As Bitcoiners, we never really saw maybe a cypherpunks or libertarians. We didn't see the rise of these things.

I think it's kind of. Best of interest in traditional banking and traditional regulation that all they're going to do is ever is. Fond tether and yet tether is still the number one stable coin or earth. So it's very interesting what the public has said with their pocketbook in terms of all these high level fodders out there.

We're always talking, oh, Tether's so great. USDC, all these things USDT are so great. But unlike Bitcoin, they can freeze your money for any reason they want. If you donate money to something they don't approve of, they'll freeze your account. So freezing accounts is back thanks to Tether.

Well obviously, you know, Tether stopping that much money on the blockchain. It's just another form of CBDC, isn't it really?

I have noticed that the peg for Tether has been slipping over the last month. So that might have something to do with it. Maybe a lot of people starting to lose their trust in Tether.

So obviously you've got big criminal gangs using Tether, but you've also got people who otherwise would be in a little poverty also using Tether. So yeah, it's tricky one really. Because it's established itself now as a very strong brand and people have started to rely on it.

but at a larger scale, and I'll take this one first, we disagree with freezing wallets. We disagree with PayPal freezing wallets. I disagree with USDT or Tether or Tron or whoever you are. Freezing wallets is against Bitcoin. It's against the idea of free flowing money, free flowing information. Sometimes good, sometimes bad. We can't control it all. That's the whole point of Bitcoin.

now we have Tether for a period like Tether was useful when Bitcoin was an incredibly unregulated market and people had exchanges and they wanted to in and out of Bitcoin to trade or whatever it can. It was kind of useful. But yeah, it's just, it's just, it's just a payment processing thing you can use, but they can ban you. They can freeze your wallet.

Yeah, Tether has brought back all of our least favorite words from working with banks and Wall Street where they freeze your account, where they ban your account, where they reverse your transactions. And again, obviously we generally disagree with whatever ISIS K is up to. But this could be a free speech organization. It could be a pro-women organization. It could be something you support.

You shouldn't be, I mean, with Tadley, even if you have them in your own wallet and you've only phone or whatever, then they can still freeze the funds because it's just a centralized, I don't even know what it is. It's not even a shit coin, it's just like a centralized database.

Tether is boosting up the United States. I love Tether. I love Tether, but it is marketing. They picked United state's dollar. Why did the United States have they keep on buying treasuries? Why do they keep doing this? It strengthens it.

the stablecoin thing is really huge. That is something that is, it really, sadly, it's a killer act that's come that out of the Bitcoin revolution. It really is. It really is.

Well, and remember that tether is what they can regulate. They can't regulate Bitcoin. They can regulate tether because tether's tied into bank accounts. They're tied into stocks. They're tied into bonds. And all of those things could be regulatory frozen, right? You can't regulatory freeze Bitcoin.