Hacker News Reader

Comment by tim333 | Hacker News Reader

People do hold USDT. I hold some myself. If you are going to buy crypto again it saves the hassle and expense of converting into fiat money and back again.

The majority of exchanges can't actually hold fiat money due to regulatory issues.

Also I imagine some people are hoping to avoid the taxman by keeping it in crypto though that's legally not kosher.

View on HN

Why USDT and not USDC or DAI? Don't you feel like holding USDT makes you complicit in whatever shit is going on?

Also, I would be very, very weary of using an centralized exchange that "can not hold fiat". With the layer-2 projects that are coming now (take a look at loopring or Stakenet), you can transact as much as you want, no gas fees and exchange fees are about the same as any CEX.

Because way more exchanges offer USDT trading. USDC / DAI are both fairly new, and aren't offered as trading pairs nearly as frequently.

Still, they do exist now. And again, if an exchange only offers USDT as on-ramp that should be a massive signal against its trustworthiness.

I somewhat agree, but it's also a chicken and the egg problem - everyone uses USDT as the primary pair because everyone wants it, and everyone wants it because that's what every other exchange offers. Exchanges can offer another stablecoin, but it's likely to have very little volume.

Coinbase offers DAI, plus you can exchange DAI for any ERC20 token on a dex.

Right, and coinbase offers USDC as well. The problem is the long tail of exchanges overseas that only offer USDT.

But why should you care about these fringe exchanges when (a) you know they are not trustworthy and (b) there are decentralized alternatives where you can trade pretty much any token you'd like to hold?

If the problem that these exchanges only offer $LOCAL_CURRENCY <-> USDT as on-ramp, what's stopping you to:

   1. make the on-ramp via USDT
   2. buy ETH
   3. withdraw to your own wallet
   4. Trade on Uniswap/Curve/1inch/Loopring/Stakenet to anything you want; (Wrapped) BTC, USDC, DAI, any ERC20...

It's not that complicated, it eliminates your risk of holding USDT, these shady exchanges can still operate (at their own risk, not the users), it makes it super easy to identify exchanges with liquidity problems (the ones that get any excuse to not let you withdraw or make the fee way to high will surely indicate an issue with their liquidity) and - most importantly - reduces the amount of USDT in circulation.

What I am missing?

In what way is Tether not a fiat currency?

Ironically Tether, whose quantity appears to be determined by however much the small private entity that runs it decides to create, appears to be a much purer example of 'fiat' currency than most national currencies have been for most of the last half century (quantity determined in a decentralised manner by the balance of supply and demand for credit at a base interest rate a centralised body periodically updates to hit a [decentralised market-driven] fixed target rate of inflation)

Investopedia has:

>Fiat money is a government-issued currency that isn't backed by a commodity such as gold.

Tether fails the government-issued bit.

In what meaningful way is Tether not a fiat currency?

It is meaningful, because a large part of crypto culture seems to be based around hand-waving and selling you an underdog no-big-government empower-the-people story

The not government issued bit would become pretty meaningful if they get shut down or collapse. They are more like IOU notes for fiat currency - Tether owes you one US$.

Reply on news.ycombinator.com