RE: From BTS:USD to BTS:BitUSD What Does This Mean?
Many thanks for the swift reply.
Double the security sounds good; but, after a little research on discussions about ‘pegged assets’, my FUD meter just went up a notch. Here’s a quote from a very detailed article:
What if the markets aren’t too fond of the idea and liquidity is limited because the issuer doesn’t actually have the amount of assets pegged to the currency in reserve available (as we’ve seen with so many in the past)?
The result being that the open market dictates the price of the asset, not the issuer (as was intended) and holders of the asset start selling them off for less than the artificially designated “market value” in order to mitigate risk.
In the end, unless you’re a centralized federal government with authority and a standing legal structure to defend your assertions, there is no such thing as a truly ‘pegged’ asset in the cryptocurrency markets and there never will be.
Here’s the link to the article:
https://cryptocoinmastery.com/lets-talk-pegged-crypto-assets/
For now, I will accept that this is crypto; thus risks. I’m aware enough that when people are in the equation, the word ‘trust’ has its consequential 'security' variables automatically built in. I hate to sound cynical; but, that’s reality; and, besides there's risk in just about everything. The effort to invest beats the alternative...zero-growth funds in a mason jar.
Currently, I don’t have enough in the account to lose sleep over; but, it’s still good to remember that crypto does not have an FDIC backing. And, in today’s US economy even that’s ‘questionable’.
Lastly, God calls us to grow our money and not just hold on to it at face value for 'secure' savings. (Matthew 25: 14-30).
Best regards.
Peace.
bitUSD is not only pegged. It is also backed by BTS collateral. User issued assets are a different type of token on bitshares platform.
bitUSD is a smart token and it is not 'issued' by a specific user. It is shorted into existence by any user, by locking at least 1.75x worth of BTS as collateral. It is veeery different than tether in this sense.
it is not 'issued' by a specific user...It is veeery different than tether in this sense.
Thank you for this helpful input. I don't usually equate crypto with collateral benefits; but, this certainly raises an awareness, and level of confidence. Worth noting, the article mentioned similar warnings about the developer of Tether doing a huge money "grab".
Again, many thanks! Thus far, I haven't withdrawn any earnings for tangible cash. I have this pseudo 'FUD' that when it comes time to exchange the crypto for fiat, all assets will be down for maintenance; and no bank transactions will be allowed. Had I not had this maintenance experience with STEEM and OpenLedger for weeks on end; I might not be so 'nervous'. Now, of course, this is clearly unfounded, as people are not shy about being duped. The discussions would be abundant.
Again, many thanks!
Peace.