MOL Moore Chain Academy: What is a stable currency? Is the stable currency really stable? What is the nature of the USDT? Today, Qian Haitao, the founder of Moore Chain MOL, gives an important analysis to everyone.
What is the nature of the USDT?
The USDT is a Tether USD based on the stable value currency US Dollar (USD), 1 USDT = 1 USD, and users can use the USDT and USD for 1:1 exchange at any time.
The USDT is a special product of a special period. Because of the strict regulatory attitude of the government on digital currencies around the world, legal tenders are no longer able to trade through the exchange's payment channels, so it is necessary to conduct cross-border transactions, offline transactions or find an intermediary to help complete the purchase task, which is very cumbersome. It also discourages a group of investors who want to speculate.
In order to solve this problem, Tether has adopted a very credible means to gain the trust of all investors, that is, every dollar issued is guaranteed to have one dollar in the bank.
The biggest purpose of the USDT is to provide a stable price, to provide an excellent intermediary for the "coin" transaction, and to implement some functions of the real currency in the world of digital currency.
Under the influence of the USDT, other fiercely fluctuating virtual coins became "commodities". Today's exchanges support the circulation of USDT. The use of USDT also “circumvents” the rules that the original digital currency cannot be directly exchanged with the legal currency, and truly combines the virtual currency with the real financial system.
Interestingly, when the price of digital currency falls sharply, the people who are preparing to enter the market will buy USDT in large quantities, and the over-the-counter premium of USDT will rise.
But we can't help but ask: USDT price is stable, what is Tether's profit model? Tether promises that USDT holders can exchange the equivalent amount of US dollars after passing the company certification and paying a 5% fee.
However, the USDT is essentially a digital currency based on a decentralized blockchain issued by a centralized company. Therefore, in a market where decentralization is believed and the nodes are highly autonomous, there is always a different dispute in the centralized USDT. In fact, negative reports about the USDT have been constant.
The USDT is essentially a $2 billion USDT that supports the industry's $300 billion market capitalization. The leverage ratio is more than 100 times. The USDT's circulation rate is 10 times that of the French currency. This is a mine.
Investors buy real money, Tether gives virtual currency. In theory, Tether can issue endless USDT. There are currently USD 2 billion USDT on the market. Before the industry, there was a lot of doubts. “Tether really Is there a $2 billion deposit in the bank?” Tether’s official has always claimed that he’s sure to save, but he’s not giving enough evidence.
In fact, although the “USDT” made a “100% reserve” commitment, there was no substantial contract or document to prove that a USDT equivalent was exchanged for $1. At the same time, there is strong circumstantial evidence that Tether controls the bitcoin market price through over-issued USDT. There has always been a suspicion in the market that "USDT" is secretly over-delivering money, and this contradiction has become more intense with the occurrence of a "theft" incident.
Although the USDT has always claimed to be safe on the technical level, on November 19, 2017, Tether official website announced that the USDT worth more than 30 million US dollars was stolen. But they have marked them all to prevent entry into the circulation market. After Tether was hacked, some users in foreign communities thought that this was just that Tether wanted to take the opportunity to destroy the tokens and erase the part of their private over-issue. Since then, the trust of USDT has been greatly reduced.
At the same time, some users have reported that it is very difficult to redeem the US dollar with UDST. It will last for a long time, and even after six months of unredeemed, this is a classic Ponzi time difference.
Of course, some people think that all the current doubts are all confessed. There is no problem with the issuance of Tether and USDT. The market has been circulating and there is no systemic risk. At the same time, for Tether, 5% of the handling fee is already a big source of profit. Taking the risk of currency over-issuing is equivalent to moving your own feet. At present, all major exchanges are online USDT, and it is believed that they have undergone rigorous inspection and evaluation.
In addition, according to CCN, Tether has released a “transparency update” indicating that its USDT-linked USDT is fully supported by physical dollars held in two independent banks. The report was published by Freeh, Sporkin & Sullivan LLP (FSS), which was founded by three former federal judges, including the former FBI director.
Although not a formal audit, FSS said it has full access to Tether's bank accounts and bills online, and two unpublished employees with Tether Asset Bank can also access it. According to reports, one of the two banks is Noble Bank in Puerto Rico, although neither side has publicly confirmed this.
The blockchain has been sought after for its decentralization, but at present we are using tokens issued by centralized exchanges and centralized companies as the trading medium. USDT can be accepted by major exchanges and users. Most of the reason is due to regulation, so the current blockchain market is a special period, and USDT is a special product in this special period.
As blockchain development, regulation, etc. become more mature, we can't help but ask: How long can the tokens in the blockchain market survive as a token issued by a centralized company?
In the words of Qian Haitao, the founder of Moore Chain MOL, “The blockchain should make the Internet a genius, an open network of merits. Based on the atomic physics world, the government maintains order, and reasonable humans have proliferated. Living infrastructure, real estate, automobiles and other real estate and the real economy have their own laws, and it is not necessarily necessary to monetize their numbers. We believe that any exaggeration of the scope of technology available is a deceptive behavior. So Bitcoin and Moore are all focused on digital assets that most require blockchain technology."
Finally, I shared a paragraph from Mo Hailin’s founder, Qian Haitao: “I firmly believe that cryptocurrencies will change the world, replace the stock market, most currencies, and pay for machine-to-machine, Internet of Things, streaming media, and forecasting the market. Power, governance systems, voting systems, and even everything on the Internet. Having said that, cryptocurrencies still have a long way to go, and most of these areas are still at a very early stage."