Friday night edutainment. Transparency and verified authenticity in crypto?
The Bit Short: Inside Crypto's Doomsday Machine
(22 min read)
An anonymous one-time post from Medium on the underlying crypto market drivers, specifically looking at Tether and a lead into our Sunday Deep Dive.
The Bit Short: Inside Crypto's Doomsday Machine
From the author:
“There are things in crypto right now called Tethers. To simplify a bit, Tethers are issued by a crypto company called Tether Ltd. — meaning that if Tether Ltd. says you own a Tether, then you do.
Tether Ltd. also says one Tether is worth exactly one US dollar. Can they do that? Well they say they can, because they hold $1 worth of assets for each Tether. But are those assets actual dollars? No, they are not. So what if the assets go down in value? Don’t worry; they will not. Okay, but can we at least see the assets? No, you may not.
Who in their right mind would use something like Tether? Well, the short answer is that many people use Tethers to buy Bitcoin and other cryptocurrencies. The long answer, though, is astounding — but more on that later.”
An informative piece, and whatever one’s conviction on a particular asset or technology - signal is preferable to noise.
Next up, our Sunday Deep Dive will be covering how we think about achieving transparency, trust and verified authenticity of underlying assets that either back specific markets or enable liquidity (e.g., debt collateral, commodity backed bonds, Tether for Bitcoin, etc.). For this Sunday. we’ll specifically focus on the the TDN asset reserve backstop.