For a cryptocurrency pegged to one USD, what is a better option than using Tether or USDT? Steem Dollars or SBD seems to be ideal as explained at https://steem.io/steem-bluepaper.pdf because SBD always convert to $1 worth of Steem providing liquid value based on a transparent blockchain instead of whatever is used to back USDT.
Tether is the USD pegged cryptocurrency which recently just lost $30 million of customer funds to a wallet hack. Everything is fine on Bitfinex and with Tether as long as buying demand is greater than selling demand and prices go up. The problems come when everyone tries to cash out at once either after the next court ruling or news story or hack. It seems likely that anyone with Tether may find the price go double or even triple that of a real USD with a trusted exchange meaning traders on Bittrex and Poloniex may lose millions trying to cash out a worthless Tether. Alternatively, a big bitcoin selling wave might bottom out an exchange like Bitfinex which may have much less fiat currency on hand and may struggle to make the withdrawals to the customers. As customers start sharing stories of not being able to pull out money, the USD exchange on Bitfinex may become worthless as everyone tries to pull out and everyone with USD tries to buy bitcoin or Ethereum moving the USD price on Bitfinex potentially into the hundreds of thousands as customers realize a USD on Bitfinex is not really worth a USD in real life.
My prediction is the prices on Bitfinex to USD will go crazy with bitcoin maybe going over $1 million USD for 1 BTC as buyers realize a USD on Bitfinex is not equal to a real USD or even many any USD. All of the other coins on Bitfinex are likely to crash with it as traders try to pull out before others and sell into fiat as fast as possible. This may lead to as much as a 90% drop in the price of bitcoin, Ethereum, EOS, IOTA, and USDT which are some of the top cryptocurrencies traded on Bitfinex.
Love,
Jerry Banfield
PS: The only cryptocurrency I invest in is Steem because of what you can see on my blog at https://steemit.com/@jerrybanfield
