Hallo Hivian...
On this occasion, we will discuss about the time bomb in cryptocurrency. And if true, this means it is the biggest scam ever in human history. And we are witnesses of history that might happen.
Hopefully this time bomb doesn't happen, considering that so many people are starting to use cryptocurrencies as a medium of exchange, investment, and saving his money.
This is my research, please do on your research. The time bomb was called Tether. Although this issue has been heard since 2018, the company has always avoided it.
What is Tether?
Tether is a USDT stable coin issuing company. Where the USDT price is determined based on the dollar. In the past, the company guaranteed that each USDT token was always backed up by US Dollars stored in a bank account.
To get to know USDT, we must first know about Tether. Originally, Tether was called realcoin and it was announced in July 2014 by its founders, Brock Pierce, Reeve Colins & Craig Sellars.
The first token was issued on October 6, 2014. And on November 20, 2014, the CEO announced that the project was renamed Tether and issued tokens for three currencies, namely US Dollar, Euro, and Yen.
Then in January 2015, Bitfinex listed USDT on its platform. Bitfinex is one of the largest exchanges in the world based on volume.
Then in January 2015, Bitfinex listed USDT on its platform. Bitfinex is one of the largest exchanges in the world by volume. The co-founder of Bitfinet was allegedly involved in the founding and first launch of Tether in the British virgin Island on 2014.
Currently, Bitfinex and Tether have the same CEO. So, both of them have a very unique relationship. The reason for Bitfinex's involvement, because Tether is the company and USDT is a token issued by Tether and USDT is a stablecoin.
What is Stablecoin?
A stablecoin is a cryptocurrency digital asset whose value is determined based on the asset backing it. So the USDT value is determined based on the dollar price, as well as BUSD and USDC. For example, the price of 1 dollar is 14,400 rupiah, then the price of USDT, BUSD, and USDC is the same.
Therefore, USDT, BUSD, or USDC, even if they come from different companies. The value of each is equal to the value of US Dollars. This means that the cost of 1 US Dollar is the same as 1 USDT, BUSD, or USDC.
In addition, there are also stablecoins that are equal to the value of rupiah and gold. The coin that is stable with rupiah is BIDR and the coin that is stable with gold is DGX. The value is one to one according to the asset that backs it up.
How is Tether's position now?
Now, Tether is ranked third in the marketcap, after Bitcoin and Ethereum. Currently the marketcap of theater is approximately 10 percent of the marketcap of Bitcoin. Seeing the troubled Tether hegemony, many countries are on alert with Tether. Like China and countries in Europe.
They are very afraid of dollarization. And USDT provides a huge amount of space that makes dollarization very possible, faster and easier to do.
With the stablecoin, of course, it is very easy for us to buy dollars with just the touch of a finger through a gadget. The danger is that this can make the value of the currency fall. For example during a crisis, the price of the Euro, Dollar or other currency drops drastically, so people will find it easyly to buy dollars and save them in USDT. This will make the value of the country's currency will decline and collapse.
The Problem of Tether
The following is an explanation of the problems experienced by tether.
1. USDT is not backed by dollars
Based on the latest company statement that USDT is backed up by a reserve fund, not dollars. And in reserve funds, tether only saves 3.8 percent of cash. Most of its assets are held in the form of commercial paper. Which is very difficult to audit and be held accountable for.
Tether was investigated by General Attorney of New York. Tether said he couldn't be sure that his fiat dollars could back up USDT.
2. Tether acts like a Central Bank
Tether is not a central bank. However, they can issue dollars in USDT as they please. The problem is that Tether is never regulated. Its offices are located in the British Virgin Islands. According to Wikipedia, Tether is a controversial cryptocurrency.
3. Bitcoin price manipulation
There are several steps taken by Tether to manipulate the price of Bitcoin. First, Tether prints USDT and then sends it to an affiliated party. Second, these affiliated parties get USDT disbursement and then place a buy order on Bitcoin so that the price of Bitcoin soars. Third, after the price rises, retailers buy and then sell slowly or make checks.
Some analysts already know the pattern. Every time USDT is printed, the price of BTC will go up. And when the price of BTC and other coins crashes, the minted USDT will return to the Tether address.
4. USDT became the life and death of crypto
The life and death of crypto depends not on Bitcoin, nor on Ethereum but on Tether. If these two coins disappear (BTC & ETH), the technology will easily be replaced by other coins with more sophisticated blockchains.
Judging from USDT which is not backed up by the dollar, of course this will make people not believe it. So that people's distrust of USDT will undermine trust in crypto. And when USDT is destroyed, the bridges of investors will be broken.
5. USDT backed by debt
As previously explained, uSDT is not backed up by dollars, but is backed up by reserves consisting of debts to affiliated companies. The problem is when the company can't pay its debts and there is a large USTD withdrawal that exceeds Tether's cash deposits. If this happens, then the system will certainly collapse.
When will the time bomb explode?
This time bomb will explode when there are people or parties who raise massive funds at the same time. While the dollar cash is not available
With this condition, Tether will delay the payment and many people will be worried about Tether. the destruction of Tether will also have an impact on conventional banks or cooperatives, because when people want to cash out from USDT, the cashes are not available.
This is based on my research which is very likely to happen. So, be wise in investing in cryptocurrency. Please do in-depth research on Tether and USDT.
