
The Supply of Tethers at 27 November 2017 is $675M - benham_a
https://medium.com/@BambouClub/what-will-happen-when-the-shit-hits-the-fan-with-tether-f59f92fd8dca
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Ruphin
I think the most promising project to create a decentralized stablecoin is
MakerDAO's 'Dai':
[https://github.com/makerdao/docs/blob/master/Dai.md](https://github.com/makerdao/docs/blob/master/Dai.md)

I have been reviewing the mechanics and I haven't found any major weakness in
the system. I'm really curious to see how it performs once released.

Disclaimer: I am not affiliated with or have any position in MakerDAO.

~~~
JohnJamesRambo
I'm really waiting for this one too. Hope it saves crypto from disaster and I
don't feel I'm being hyperbolic when I say that.

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jatsign
The fatal flaw in Tether is that you have to trust the company behind it. The
whole point of cryptocurrency is you shouldn't have to trust anyone. And the
company itself is so opaque it should send you running to the hills.

I've been working on a new cryptocurrency pegged to the dollar. It's
implemented as a smart contract on the Ethereum blockchain, so you can audit
it's reserves yourself, at any time, instantly. You can also audit the source
code to see that there's no way for me, or anyone else, to withdraw from the
reserves. You can buy and sell the currency, Unum, for Ether or a few other
cryptocurrencies. Buying and selling occurs directly on the blockchain.

If anyone's interested in checking it out, it's on the Ethereum Ropsten
testnet now.

[https://unum.one](https://unum.one)

~~~
wslh
What do you mean with auditing the reserves yourself? Can I check your bank
account to see if the amount is equal to the price*qty of your token?

Regarding the auditing, not anyone, indeed very few, has the capability to
audit an smart contract. Was your smart contract, oracle, and software in
general audited by a recognized and third party entity?

I am not saying that your approach is not correct but you need a lot of
transparency measures beyond the technical solution implemented.

~~~
jatsign
There is no bank account, just the smart contract. It holds the Ether, OMG, or
whatever other cryptocurrency you send to it when you buy Unum. There's a
function on the contract to return the total reserve in USD, or you can check
the actual values of the variables being used. Anything on a smart contract is
public.

You're right that relatively few people have the technical skills to query a
smart contract, but that relative few is still a LOT of people who can verify
the reserves independently. Versus the almost 0 people who can audit Tether.

If you're interested in interacting with the smart contract (or any smart
contract), you may want to install Mist. It's non-trivial to get started, I
admit, and the tooling around smart contract is incredibly immature, but..man
it's cool ;)

[https://github.com/ethereum/mist/releases](https://github.com/ethereum/mist/releases)

~~~
empath75
It seems to me that your currency loses its peg the minute that the
cryptocurrency price collapses.

~~~
55555
The parent comment (empath75) sounds correct to me. If people deposit a bunch
of cryptos, but cryptos are highly correlated in downward movement, and the
general crypto market suffers, then this new crypto is no longer pegged to
USD.

EDIT: looks like this is covered under "Reserve Deficit Sell Penalty". I don't
really understand this part but regardless this won't be pegged to the dollar.

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eemax
Isn't it much more likely that Tether is keeping some or most of its reserves
in bitcoin, rather than USD, as they claim?

Most people get Tethers from trading on bitcoin exchanges, not from buying it
with USD. If Tether accepts payment for tethers in bitcoin, they're _supposed_
to immediately cash the bitcoins out to fiat. But my guess is they're not
actually doing this, and just keeping a good portion of their reserves in
bitcoin. If that's the case, they'll be solvent as long as the price of
bitcoin doesn't collapse (big if) - in fact, they would have made a fortune
over the last couple of months.

~~~
eigenvalue
This seems like the most likely explanation to me. It's a classic "Heads I
win, Tails you lose" calculation, but with much better odds and payoffs than
usual! If you are bullish on BTC as I am, this will turn out to be fine for
everyone.

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rothbardrand
There are lots of reasons to be concerned about Tethers, formost of which is
that they are centralized.

But with the massive on boarding of new customers (coinbase releases customer
stats regularly and are having record new accounts created) ... you would
expect that the number of tethers in circulation would go up as some people
decide to adopt the tether for whatever purpose and more need to be created.

Not quite sure whether they are all backed or not. (and I don't know how to
tell at this point.)

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celticninja
And the guy who runs tether is the chair of the bitcoin foundation. That
position may be cursed.

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billylindeman
Just use bitUSD :\ it's been around and working great since 2014.

