What is it?

Tether is a cryptocurrency of some controversial renown.
Considered a controversial coin due to its history and association with a possible fraudulent cover-up of about 850 million dollars by the Bitfinex exchange.

It used to labeled as a stablecoin whose value was backed by 1 US dollar but on March 14 2019 changed this to include loans issued to affiliated companies.

Its controversy stems from its supposed value of 1Tether = 1 US dollar where, after investigation, its real value was actually 0.74 US dollars in cash and cash equivalents.

Another aspect of its controversy has to do with the supposed audits which should confirm and create more transparency concerning actual value. Further controversy arose with its alleged role in manipulating Bitcoin prices and the aforementioned role in the fraudulent cover-up within the Bitfinex exchange.

Leaving the controversy aside and looking at the aim of the coin the following is mentioned:

In short: it aims to be an intermediate to use fiat-money as digital currency worldwide without having to fear about price volatility unlike other Cryptocurrencies.

Which is the basic definition of any Stablecoin in existence.

Tether makes use of the Bitcoin-blockchain.

Analysis and opinion

Unlike any other stablecoin my opinion on this Cryptocurrency is negative on all fronts.

• Backed by fiat money
  Isn’t a very smart move as fiat money has been losing its inherent value since long.
  This is explained in my blog entry “Gold and Digital Gold” as well as briefly touched with the “IN FOCUS”-entry “In Focus – DAI and Maker (MKR)“

• Lack of transparency
  While the website regularly updates its “transparency update“-page with the newest and latest statement from their lawyers, almost no factual proof is given.
  The statements lack referrals and documents from the banks holding the money by which Tether is supposedly backed.
  Hence their Transparency-page showing current balances has no factual proof of backing EXCEPT by word-to-paper.

• Its history
  Being associated with fraud, lack of consistency and lack of transparency has made it untrustworthy. Its set up is in very stark contrast to the idea of Cryptocurrencies and almost contrarian to the philosophical ideas of Bitcoin.

I can only conclude Tether is a stable-coin to avoid.
While stable coins are always to be looked upon favorably, Tether is an exception to this unspoken rule.

When critically dissecting and reading up on this coin it could only be concluded Tether is classic Fiat Money with some unnecessary extra steps. An elaborate cash-grab to cash in on the current Crypto boom (made evident by its history and lack of transparency).
Its whitepaper even shows signs of it having more in common with the problems of classic (fiat) money and standing closer to it than being FACTUAL digital money:

A first forgiving factor to this Cryptocurrency is its ability of exchange and use like any other Cryptocurrency.
This is negated by the fact literally ANY other Cryptocurrency holds the same premise.

A second forgiving factor is the introduction of a new Cryptocurrency called “Tether Gold” which aims to be a competitor to the Digix Gold Token and Ekon Gold.
This factor is negated if the same problems of transparency are encountered as with the classical Tether coin.

To learn more about Tether:
Website can be found here.
Whitepaper can be found here.

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