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Snapolino 2y ago

I think i figured out how Tether works :-)

Entity converts USD to USDT

1. Entity sends USD to Tether

2. Tether buys Bitcoin

3. Thether then issues USDT

Entity converts USDT to USD

1. Entity sends USDT to Tether

2. Tether sells Bitcoin

3. Tether destroys the USDT in circulation

(0 bonds, 0 treasury's, 0 assets .... pure simple unconfiscatable math)

The revenue is generated from the spread (time between sell and buy)

Just an assumption from my side and probably the reason why the US gov cant do shitt about Tether. It also coincides with when the Marketcap of Tether increases , Bitcoins Marketcap increases too (in parallel to everyone else buying)

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Discussion

ToBeWhereTheresLife 2y ago

Interesting, but what led you to this? They'd be abdicating huge amounts of revenue that they'd get from debt yield, and a "risk-free" 1-to-1 dollar peg. How do they find their operation?

Snapolino 2y ago

if you would understand "risk free" you wouldnt ask this.... Nothing in the world is risk free except 1 btc = 1 btc . Everything else includes risk.

You think bonds will stay that high? for how long? what gurantee you get that there will be no default? What gurantee that there is no war? what gurantee there is that they are not converted to war bonds? ....

risk free means just "you are blinded to see the risk behind, because you/yourself will be the yield on the product"

ToBeWhereTheresLife 2y ago

Yeah. That's why I put risk-free in quotes. But short dated treasures are basically risk-free in relation to dollar liabilities.

Snapolino 2y ago

So in case this is true, and this is how it works. Then is also means every USDT is a 1 USD short position on Bitcoin. So no matter what direction Bitcoin takes , it would mean Tether is always liquid as there will always be a buyer for Bitcoin even if it means a possible drop to 1$. The problem comes when everyone wants to exit at the same time, so conversion from USDT -> USD has to be limited which it is, as there is no pressure to immediately sell as 1 USDT stays 1USD but the fiat ramps cant handle it.

Vlad, Bitcoin Takeover Podcast 2y ago

You can theorize, or you can read about how the reserve system works:

https://tether.to/en/transparency/

Snapolino 2y ago

sure its a theory.... sure i can not proof it.... if i would be able to proof it it would be a lot of fun.

DarthCoin ₿⚡️ 2y ago

Tether like any other so called stablecoin is a scam shitcoin and is a continuous support for fiat to exist.

Watch this mini docu:

https://youtu.be/5KXHgh2rTTw

Snapolino 2y ago

agreeing on this, but that is not what i am talking about....