I can't wrap my head around this. Who is silly enough to sell bitcoins for 'worthless' Tether?
Cryptocurrency markets are dominated by highly rational traders with deep pockets.
Just because a bunch of newbies are buying 0.002 BTC on Coinbase doesn't change that fact.
Highly rational traders with deep pockets do care. Getting hand-wavy talking about "irrational markets" doesn't adequately explain why Tethers trade at parity to USD.
I don't know what's going on with Tethers, honestly, it's not something I've followed very closely; so this may not be a problem at all (and if it's not, I would assume the people involved would be eager to get an audit done and results published so the money train can keep rolling). I'm just saying that unless you believe strongly that Tethers are backed 1:1 by USD, it would be irrational to hold Tethers, even for a short time.
I found it worrying that when the guy they interviewed tried to move his Tethers to another exchange, he couldn't find enough takers (and Bitfinex wouldn't let him exchange for dollars either). So, the argument that Tethers trading at roughly $1USD across exchanges is "proof" that Tethers are sound is shaky, at best. If you can't sell more than a handful of Tethers without crashing the market for Tethers, it's not actually the market setting the price. Something else is going on...something that would be illegal in a regulated market.
I get that I guess it's not easy for someone in a major city or whatever.
Contracting a reputable firm to conduct an in-depth audit and publicly releasing the results would also be a useful step.
"After Wells Fargo severed ties, Tether won’t name its banks"
"On Dec. 2, Bitfinex released a quarterly report announcing it would no longer serve U.S. customers because it’s too expensive to do business with them. This followed Wells Fargo & Co.’s decision earlier in the year to end its role as a correspondent bank through which customers in the U.S. could send money to Bitfinex and Tether’s banks in Taiwan. Bitfinex and Tether filed suit against Wells Fargo, but later withdrew the case."
"However, Ronn Torossian, a spokesman for Bitfinex and Tether, refused to identify their current banks unless a reporter signed a non-disclosure agreement, an offer that wasn’t accepted."
Likelihood of a problem x the cost of the problem happening = how much you should worry/care/act
When someone asks 'how sure you are' about something and you say 'really sure', unless you pull out a slide deck with numbers and graphs, that's an emotional estimate, and has no bearing on the precautionary principle. We naked apes get tripped up by this because we are used to dealing in social interactions, where your intuition works pretty well. Statistics, not so much.
You loan your friend your car when you're pretty sure that they won't wreck it, scratch it, make it smell like pork rinds. A business is not your friend. There's no social capital at play. Without that social capital you would never lend your car to a business. You don't owe them the benefit of the doubt nor do you reap a non-monetary benefit from doing so. Only when there is such a benefit (community building, networking, etc) would you even consider doing so.
I have certainly defended companies in forums because I felt they represented some part of a world I wanted to live in. That's my social capital in that case. The best way to predict the future is to create it, and I had a small part in that. I participated.
But in this case if you're wrong, instead of losing out on a toy, or a pillow that is always the exact right temperature, or a fridge that always has chocolate milk in it, you're going to lose money, face, and probably that world you hoped for. There's been enough shenanegans that the confirmation bias that kicks in if Tether is allowed to continue to grow and turns out to be a pyramid scheme has a real potential to have deleterious effects on the whole concept.
How willing are you to back Tether if it means there will never be a similar company that is actually legitimate? What are the objective odds of that outcome at this point? If you really want this world, you should be demanding transparency from everyone you support in this space at this point.