2017 was the year of the issuance of the currency derived from the Ethereum. One of the crypto-currency’s most intriguing, recently annoncéé is Tether, which is backed by reserves in us dollars. In addition, there is a problem with the token that makes it unlikely the test of time, at least in its current form.
The basic concept behind the Tether is rather simple. An entity that holds u.s. dollars in a bank account, and then issues tokens Tether as a function of the balance of the bank account. A Tether is equal to one u.s. dollar. The first version of the Tethers has been issued at the top of the blockchain of Bitcoin through the protocol Omni. However, on the market, today there are over 430 million dollars of Tethers. Before you create Ethereum, Vitalik Buterin has been working on project Omni, although it is of Mastercoin at the time.
What happens when the Tethers are the subject of a fraud ?
Although the questions on the credit-worthiness have been suppressed by a recent report of Friedman LLP, there is another systematic problem with the Tether. Governments around the world will surely punish the use of digital currencies for fraudulent purposes at one time or another. Moreover, this repression may occur earlier than expected, with notably the alleged use of bitcoin by North Korea.
U.s. senator Ed Markey was asked last week to stop the use of Bitcoins. Of course, the Bitcoin was created to avoid government repression. This same logic does not apply to Tether.
Bitcoin is not threatened by virtual currencies to Fiat
Regulatory issues potential around Tether perfectly illustrate the value proposition of bitcoin. The creation of Satoshi Nakamoto exists because any form of digital cash, you need to resist the repression.
If someone can stop the marketing of Bitcoin, the intrinsic value of bitcoins is lost.