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Tether: The Story So Far | Kalzumeus Software

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The dominant use case for cryptocurrency is speculation. Speculators want to put value into the system, somehow have it become greater, and then take more value out of the system than they put in. The cryptocurrency community includes many exchanges, each a group of affiliated companies, but it is sometimes clearer to view it as an single entity. It would have a series of ledgers, some mechanism for exchanging between the ledgers (taking a cut for each ledger hop and sometimes for bookkeeping within a ledger), and onramps and offramps to traditional currencies (which the community calls “fiat”). From the point of view of the ecosystem, it doesn’t matter which company has those ramps, because value flows unimpeded within the ecosystem. The ecosystem is not a single entity with unified control. Cryptocurrency is not Liberty Reserve. It has, however, recapitulated Liberty Reserve’s architecture of a network of peer “exchangers” with a shared ledger between them to enable hawala-like trans

Tether: The Story So Far A friend of mine, who works in finance, asked me to explain what Tether was. Short version: Tether is the internal accounting system for the largest fraud since Madoff . Read on for the long version. So you want to build a cryptocurrency exchange The dominant use case for cryptocurrency is speculation. Speculators want to put value into the system, somehow have it become greater, and then take more value out of the system than they put in. The cryptocurrency community includes many exchanges, each a group of affiliated companies, but it is sometimes clearer to view it

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