Tether: What part of this balance sheet do we not believe?

[johnarb]

Now I of course wouldn't want to call their bluff, but can you imagine if they let depositors at one of the recent bank failures lose anything above the 250k insured limit? It would have been the end of US banking I would think.

That was the rule, above $250k is not insured and will be lost in a bank failure. Even if you had less than $250k, you would lose access to the money for the time that the whole process unwinds

"they" broke the rule in order to save "everyone"

I don't know enough about the blockchain that tether runs on, but this would be my worry. I know enough about bitcoin, so I understand that, but absent exchanges blocking certain addresses, what sorts of pitfalls are there in the code that can make your USDT go up in smoke? It doesn't seem to me that any chain, except for bitcoin, is permissionless. Knowing validators can reject certain transactions, and 75% of validators are I think OFAC compliant (maybe I have the acronym wrong), I think there is a bit too much trust necessary, at least for me personally. (although I think you can use multiple chains for a USDT transaction, and that 75% point is for ETH I believe)

At any rate, if we got down the list of bearer assets, like bitcoin where you have the private keys, this would be 100% bearer asset.

Tether Usdt is like any crypto digital asset on Ethereum, Binance Smart Chain or Tron. The transaction fees are too high on Ethereum

Just like any crypto asset on a blockchain, there are no names or any kyc info when transacting with Tether Usdt on the blockchain

I don't know how Ofac could affect me or 99% of the people who use Tether. Can you give an example on how a regular person would have issues related to Ofac?

Bitcoin is great. Most of our life savings are stored in bitcoin

I use Tether Usdt for checking account and paying for day to day expenses. I need enough fiat for xx months amount of expenses in order to have proper money management

I think the concerns that you have are that every Usdt blockchain transaction is permissioned, like any bank transaction. This is false

I encourage you to have 100 Usdt and $10 worth of Bnb and play around with it, create many addresses on many devices, and pretend you're transacting with many people and exchanges. Each transaction would only cost you less than 5 US cents

The Kyc-Aml Tether Usdt transaction occurs during conversion to fiat. The value enters TradFi. This should not be a problem if you are not a criminal and I highly recommend for everyone not to engage in any criminal activity

Gold in your pocket is another 100% bearer asset. But maybe gold in your safety deposit box requires the bank to be open and for them to give you access, so that is maybe 90% bearer assets.

Physical gold is a useless rock for me. I don't know how where I would get value for it. There are probably places that I could sell physical gold but I would not know how much I'm paying in fees and the spread

And with Tether Usdt, I can convert to fiat even at 10PM at night

Can you tell me about those concerns with regards to physical gold?

So where does USDT lie here? I'm sure its not 100% like Bitcoin, but what are the possible ways your funds can be not available to you?

Usdt is not 100% like bitcoin, but it's like any crypto digital asset and works the same way on the blockchain. I've always had my Usdt funds available to me, just like any other crypto digital asset

I think you have Sol, so Usdt blockchain transaction works the same was as Sol blockchain transaction

 

[NoahA]

Can you give an example on how a regular person would have issues related to Ofac?

I did a bit of searching and came up with this link. Its from a year ago, but just reading the headline should cause lots of fear, at least it does for me. (I might have already shared this in the past in another thread... my memory is fuzzy)

"Tether Won’t Freeze Sanctioned Tornado Cash Addresses Without Authorities’ Request"

https://blockworks.co/news/tether-w...do-cash-addresses-without-authorities-request

Just the idea that Tether has the ability to do this is enough cause for worry, but the fact that the title implies that they would do so upon request is a huge problem. USDT, therefore, by a strict definition, is not a bearer asset. It seems like you still need permission to use it, or rather, permission can be taken away.

Now you might think most don't have a problem as long as you aren't on anyone's radar, but you never know which addresses could be compromised. I read cases of small funds, coming from addresses traced to illegal activity, were sent to addresses of people who were targeted, and now that address is tainted since it contains coins from a bad address.

With bitcoin at least, you can have a ton of UTXOs, and if you don't reuse addresses, maybe having one address with 0.01 BTC come from a mixer at some point might just mean you don't use those coins from this address. Maybe USDT works in the same way where you have $100k of USDT spread out over 50 addresses and hence most of your stash isn't tainted if one address happen to become compromised, but you can at least see the issue.

This reminds me of the issue when Ledger announced their seed phrase backup service where your seed was split up into 3 and shared with 3rd parties, with the idea being that it was now backed up for you. People were furious with this service, but no so much because it was dumb, but simply because it meant the Ledger device had a way to send out the seed phrase. Most thought it impossible for the device to ever send it out, and since it isn't open source, nobody could check the code. But the fact that the seed can be split into 3 and uploaded from the device to 3rd parties meant that even if you opt out of the service, the entire device and company is now tainted in my opinion.

Likewise, just hearing how Tether can blacklist addresses means that the government can easily one day confiscate how ever much is necessary. This also means they have the power to shut it down. I don't know enough of how the blockchain works, but if Tether issues a statement that they won't blacklist addresses, it means every transaction must somehow go through their servers, and well, this means there is a single point of failure there, no? With bitcoin, its of course the opposite. Even if we lose half the nodes, or half the miners, the blockchain survives and keep building more blocks.

 

[johnarb]

I did a bit of searching and came up with this link. Its from a year ago, but just reading the headline should cause lots of fear, at least it does for me. (I might have already shared this in the past in another thread... my memory is fuzzy)

"Tether Won’t Freeze Sanctioned Tornado Cash Addresses Without Authorities’ Request"

The headline is a positive for Usdt holders, it means Tether will not automatically sanction the Ofac published addresses and will require an explicit request from the court order to sanction an address

Compare this to your money in a bank account or even in Canada where everything you have was frozen without a court order only an Emergency Act

"Tether mentioned Circle in its post, calling its move “premature” if done without instructions from US authorities."

Just the idea that Tether has the ability to do this is enough cause for worry, but the fact that the title implies that they would do so upon request is a huge problem. USDT, therefore, by a strict definition, is not a bearer asset. It seems like you still need permission to use it, or rather, permission can be taken away.

With bitcoin at least, you can have a ton of UTXOs, and if you don't reuse addresses, maybe having one address with 0.01 BTC come from a mixer at some point might just mean you don't use those coins from this address. Maybe USDT works in the same way where you have $100k of USDT spread out over 50 addresses and hence most of your stash isn't tainted if one address happen to become compromised, but you can at least see the issue.

Tether like all other stablecoins are centralized

I'm also not arguing for Tether as replacement for Bitcoin. Tether is crypto digital fiat

If you have no need for US $, then you should not have any Usdt

You keep saying that I need permission to use Tether Usdt. This is false. I use it every day without permissions

Let's compare this to my US $ deposits in the US banks

I mentioned on a previous post that after I moved to Asia, I purchased a vehicle worth about US $30k using mostly my Tether Usdt in my wallets

Transferred to exchanges convert to local fiat (less small fees), sometimes doing it at night, sometimes on weekends

If I was going to use my US $ deposits in the US banks, I would have had to wait until bank hours are open

I'd submit a request to my bank to wire transfer the amount to a local bank here, pay high fees, wait I don't know how long, and hope that my US banks will approve my request. This is what you mean by permission to use

Bank deposits are not bearer assets, they are custodied by the banks. If you're scared of Ofac sanctions for stablecoins, you should be 100x more scared of any suspicions against you or even political statements that you make as they will absolutely freeze your bank accounts

Tether Usdt that you have the private keys in your local wallet are bearer assets

Bank deposits are custodied assets. They are loans you made to the banks and the money is technically theirs, you just have an IOU promise from the banks

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Bitcoin is the best. If you do not need US $, you do not need Tether Usdt

I need US $, so I choose Tether Usdt and I converted most of my US $ bank deposits to Tether Usdt

 

[johnarb]

Likewise, just hearing how Tether can blacklist addresses means that the government can easily one day confiscate how ever much is necessary. This also means they have the power to shut it down. I don't know enough of how the blockchain works, but if Tether issues a statement that they won't blacklist addresses, it means every transaction must somehow go through their servers, and well, this means there is a single point of failure there, no? With bitcoin, its of course the opposite. Even if we lose half the nodes, or half the miners, the blockchain survives and keep building more blocks.

Tether is a centralized company and it has those risks and vulnerabilities

We live in a world of centralized entities

The government can shutdown Aramco and confiscate all the oil and infrastructure because climate change

The government can shutdown Tesla and confiscate all the EV's and charging stations because Elon won't censor misinformation on Twitter

The government can shutdown VW and Mercedes Benz and confiscate everything because Germany Hitler racist Nazis

The government can shutdown AliBaba and confiscate everything because selling Chinese junk

The government can shutdown Toyota, Nissan and Honda and confiscate everything they have because they are beating the US auto industry and now UAW is on strike causing economic problems

The government can shutdown TFI, Day and Ross and Mullen Group because Canadian truckers

The government can shutdown TSMC and confiscate everything because North Korean and Chinese hackers using the chips

I might have missed one or two more centralized entities and companies, but that's the risks with those centralized entities like Tether

They can be shutdown and everything they have confiscated

 

[NoahA]

The headline is a positive for Usdt holders, it means Tether will not automatically sanction the Ofac published addresses and will require an explicit request from the court order to sanction an address

Compare this to your money in a bank account or even in Canada where everything you have was frozen without a court order only an Emergency Act

That is an interesting take. And sure, maybe its one step above what happened at the banks, but still worrisome.

Bitcoin is the best. If you do not need US $, you do not need Tether Usdt

I need US $, so I choose Tether Usdt and I converted most of my US $ bank deposits to Tether Usdt

You do make a very compelling argument. I can see how USDT is superior to $USD in many ways as you highlight, and certainly is way more permissionless over USD in a bank account.

I guess I am just thinking about the worst case scenario for USDT, but the worst case scenario for USD in a Bank is perhaps just as bad, and we saw that happened in Greece in 2014 where depositors took a haircut.

Thanks for the thorough explanation!

 

[NoahA]

The government can shutdown Tesla and confiscate all the EV's and charging stations because Elon won't censor misinformation on Twitter

In my opinion, Elon has turned out to be a huge disappointment. Yes, he added more free speech via the Twitter purchase, but he isn't the night in shinning armor. He literally gave up information to the Saudi government I think it was who ended up killing a person because of the information given. There are many examples like this. He picks and chooses when he wants to pretend to be righteous, but has sold himself out to the Chinese governments in addition to many others.

 

[engineering]

What part don't I believe?
Every part that has not been audited.
Aka all of it

For a company of this claimed size not to have audited financial statements is a hilariously obvious indicator of fraud.

 

[RedDuke]

What part don't I believe?
Every part that has not been audited.
Aka all of it

For a company of this claimed size not to have audited financial statements is a hilariously obvious indicator of fraud.

They claim that they have more T-bills than issued USDT. Should be a very simple audit. Everyone turns a blind eye because if USDT disappears, so will crypto market cap.

 

[The_Krakenite]

The government can shutdown Tesla and confiscate all the EV's and charging stations because Elon won't censor misinformation on Twitter

I like this quote. I quit Twitter back when they shut down free speech and went after those not aligned to their conspiracy beliefs.

People striving for what 'used' to be free-America owe him a lot. He really stuck his neck out while so much was against him. Nothing you'd see from a leftist/wokist/libertard.

 

[NoahA]

I like this quote. I quit Twitter back when they shut down free speech and went after those not aligned to their conspiracy beliefs.

People striving for what 'used' to be free-America owe him a lot. He really stuck his neck out while so much was against him. Nothing you'd see from a leftist/wokist/libertard.

Don't idolize him just yet. Saudi Arabia was a major contributor for the funding to buy Twitter. Elon is their bitch now. A man dies while criticizing the government and the fucker has nothing to say.

https://www.independent.co.uk/news/...witter-saudi-arabia-free-speech-b2403234.html

Elon is just another grifter, getting his wealth from public money. Every single company relies of public funding at some point. He didn't even start Tesla but stole it from the original guys who made the T-zero car.