First Post, what you should know about Tether/ Stablecoins

Below is my response to someone asking why Tether was a non event.... if they found that it wasn't backed at 100% cash at all times then what should we do or think....

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I think because tether isn't the US Dollar. The backing doesn't matter, everyone is obsessed and focused on counting every single dollar that is in Deltec or wherever. Think of tether just like any other free floating crypto- like bitcoin. It has a price, this price unlike bitcoin has been steered by tether to be a dollar. Price, not backing. No one has any claims or rights for Tether to exchange a tether for a dollar, it is not a security. Imo the regulators only care about tether to the extent they care about watching over bitcoin- bc these cryptos have a price, they are treated as virtual currency equivalent to dollars floating around and they want to watch this activity. Stablecoins are not the same thing as dollars, they are free floating cryptos that have a price, where some like tether have been able to convince the market that it should be a dollar. Tether is not a dollar and it will never be treated as such. Whether or not Tether has created more tether than they were able to sell for real dollars is a different question. All that matters to the market is past price history, you need to establish a price then people remember that price and continue accepting it.

If people were really upset or worried that Tether was creating new tether without first collecting us dollars in exchange for that tether they should be even more pissed off at algorithmic stablecoins that have no dollar backing! Why aren't they talking about these!

So algorithmic stablecoins have no backing, they create it out of thin air, which inflates the amount of 'dollar equivalents- if peg is successful' to bid up other cryptos or trading pairs where people holding btc or eth are willing to accept it. If real us dollars have to compete to purchase eth as algo stablecoin that was just conjured into thin air you have massive price inflation. The algo stablecoins have engineered massive price or asset inflation in the crypto space- only the crypto space, at least so far...