Tether movements again reveal a great need in the crypto market.
Hi all...
Tether, the controversial stablecoin that on many occasions has given much to talk about due to the great centralization it has and the arbitrary power to block different addresses at will, this reflects the enormous danger that the fact that it is the most stablecoin can represent largest in the market, since it does not at all guarantee that the more than $76 billion are really safe. And it is that lately the issue of regulations for stablecoins has been widely discussed by many countries.
The tether company in the past has blocked different addresses implemented the encryption of smart contracts with which it can have the ability to freeze, destroy or issue tokens at will, as well as blacklist addresses arguing that it was due to certain illegal irregularities and this has put to tether on the ropes about his big problem with centralization.
Tether centralization was recently discussed again as it had locked and frozen the funds of 3 accounts that combined were worth over $160M.
Here is the block that registered it:
https://etherscan.io/tx/0x3c2af79de64f2c075dd2f1540278fa1a1d65bad21c117edc905cb7471b53d776#eventlog
But, the most interesting of all this is to know who these 3 addresses belonged to and what it implies for the entire crypto market, it also reflects again the great need for algorithmic stablecoins in the market.
The addresses that have been added to the tether blacklist are labeled as belonging to Bitfinex, which is a controversial cryptocurrency exchange that on more than one occasion has been accused of fraud and loss of funds from its users, in addition to facilitating transactions. illegal outside the exchange.
As has been warned on many occasions about bitfinex, regulations have been placed on this exchange just like what happened with binance. In fact, users residing in Ontario were recently advised to cease their operations in this exchange, since they are in the eye of the hurricane of the financial regulators of the United States and Canada due to many irregularities. So probably as part of these measures by the regulators, the addresses of this exchange have been blocked, thus avoiding massive fiuas of money.
These address blocks and the freezing of funds, although they could be beneficial for the investigation process, they also reveal a serious problem on the USDT and for the entire crypto market. Since Tether is the 3 cryptocurrency with the highest capitalization in the market and also being the currency necessary to make many operations, and as if that were not enough, it has also been chosen as the legal tender for a country, you can see that everything is at full risk.
Since the regulators have pushed so hard, they have the power to take entire exchanges out of the game as has been the case with Bitfinex and its $160M. In addition, he continues to question the veracity of tether on whether in the future it cannot fall completely when it is no longer useful for regulators.
All of these incidents greatly highlight the need for Agrythmic Stablcoins or those outside of the regulatory eye. Since algorithmic stablecoins are emission protocols based on the value of another currency, for example, the UST is created by burning the same amount in value of LUNA, the same happens with the HBD that one way to create it is to convert HIVE into HBD through a 3.5-day process.
These coins can offer a real solution since they do not keep any US dollars in vaults, everything is based on the value of other cryptocurrencies, so they have nothing to do with the financial regulations of countries. And they are also totally safe since the balance of any account will not be blocked.
Conclusion
It is just maturing in this decentralized market, while we are walking in that process we will see worse things that will make users react and realize the great importance of algorithmic stablecoins. It will happen when regulators push harder and crypto freedom is threatened.
I can see that in Hive and Leofinance HBD is being given greater importance as a currency, and it has many uses inside and outside the platform that can bring a solution to problems like this.
Posted Using LeoFinance Beta
