There are certain claims and objections that I have to respond to frequently. Some people will still claim that Tether has never had unbacked Tethers. I am attempting to create a valid and sound deductive argument that will conclusively prove that is untrue. I love philosophy and deductive reasoning, so may do a few of these. If you want to respond, please respond in a manner that addresses the deductive argument, either in form or in challenging the soundness of the premises.
- Until February of 2019 if Tether was fully backed then they would have had a dollar in Tether’s reserves accounts for every Tether issued.
- There was not a dollar in Tether’s reserves for every Tether issued.
- Therefore, Tether was not fully backed.
So let’s work through the argument quick here to show how it works. The form is modus tollens, or if p then q, not q, therefore not p. It is a valid argument form.
Let’s briefly look at the first premise. That until February of 2019 for Tether be fully backed they would need a dollar in Tether’s reserves. This was a claim made frequently by Tether themselves.
Let’s move to the second premise. That there were times before February of 2019 when Tether did not have a dollar in their reserves for every Tether in circulation. We can see that for much of 2017 they had vastly insufficient reserves to be issuing Tethers. Furthermore, in 2018 Bitfinex repeatedly took cash from Tether’s reserves and gave them a promise of future funds from Crypto Capital. Future funds from Crypto Capital cannot to me be counted as ‘Traditional Currency in Reserves’. Both of these examples are sufficient to bear out the premise.
Thus we can confidently say without caveat that there have been numerous unbacked Tethers.
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