Tether accidentally prints $ 5 billion USD
picture: bitcoinist.com
What happens when crypto companies print tokens is a recent incident at Tether. The heavily criticized FinTech accidentally printed $ 5 billion on Saturday, July 13, and immediately burned it. About the crypto motto No single point of failure and true decentralization.
Good thing there are whale alerts. The automated bots scan a wide variety of blockchains for particularly voluminous transactions and publish their finds widely on Twitter.
Last Saturday, July 13, a USDT transaction caught the attention of the crypto scene, which has one thing in it: Tether, the company that is responsible for USDT and US dollar value parity, had five billion units inadvertently of the stable coin circulated.
The sudden rain should not be permanent. As Tether CEO Paolo Ardoino announced via Twitter, the process was a mistake. As a result, the company had planned to execute a $ 50 million Omni-to-Tron protocol swap. It was probably lost to a few zeros.
Tether is getting errors right now
Fortunately, the error Tether was early on. The company was able to transport the falsely printed tokens into the crypto-hereafter in several passes and stabilize the stable coin price.
(pic: btc-echo.de)
The process shows in textbook terms what can happen when individual companies are in control of a "cryptocurrency". So you can see from the current procedure that Tether is anything but decentralized. The company itself holds the hand over the Tether Treasury and thus has to guarantee the value parity with the US dollar.
To be sure, the company has largely achieved this so far. Investors must nevertheless trust the company Tether and its parent iFinex Inc. Unlike truly decentralized cryptocurrencies such as Bitcoin, individual participants have no ability to control the supply of Tether or otherwise influence the intended goal of one-to-one coverage with the US dollar.
In short: Tether is the single point of failure for USDT. What can go wrong when companies play central bank, the incident has demonstrated.
(source: btc-echo.de)