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RE: Tether's (USDT) Market Cap breaks a $250M. A word of caution to all that hold it, and a case for why bitUSD is a superior alternative.
Thank you @ashaman for the informative article. Upvoted and resteemed.
I still have a couple of questions :
1 - If TUSD is unsafe as stated, how come most exchanges are using it? How come they trust it?
2 - Doesn't bitUSD fluctuate in value? Was the dex really able to keep its value equal to usd? Is there a historical chart prooving that?
3 - what happens if bitshares price collapses suddenly?
" All guarantees of SmartCoins are subject to the caveat that a SmartCoin can never be worth more than the collateral backing the least-collateralized short position. In normal market conditions, the value of the collateral is always more than sufficient, but, from time to time, markets can rapidly revalue the collateral. If this revaluation happens faster than the short positions can be forced to cover, then all SmartCoins are liquidated at the exchange rate of the least collateralized short position. This is similar to an insolvent bank converting its deposits to equity." In other words, all remaining collateral is automatically split up among the people who held the SmartCoins.
Personally, I believe the likelihood of such a disaster to be quite low: more specifically, I think that anything monumental enough to trigger a black swan event will leave us all with far greater concerns than what the purchasing power of our money is.
The other day, I believe for the first time in its history, the DEX went down unexpectedly due to a bug. There was a transaction created and added to the ledger that crashed all of the active witness nodes (block producers). If you look at the price chart, the red candles immediately following the downtime are considerably larger, but there is no way that selloff can be reliably attributed to the unplanned and unexpected maintenance of the network given that Bitcoin and almost every other cryptoasset show the exact same pattern on their price charts for the same exact time period. The speed with which people from all over the world rallied, identified a the problem, followed by its cause, and then created and deployed a fix was nothing short of amazing. I would consider it a bullish indicator more than anything else.
Thank you @ashaman. That was insightful.