This week, Tether became the third largest cryptocurrency by market cap, with more than $ 10 billion in the stablecoin issued since its inception.
Coin Rivet spoke to Paolo Ardoino, CTO of Bitfinex and in particular the man at the forefront of Tether development.
Ardoino’s role at Bitfinex and Tether is extensive, spanning the exchange’s matching engine and issuing new Tethers, but one thing that sets him apart from other CTOs in the industry is his forward-thinking stance on social media.
“Crypto is a super technical industry. So I think it’s good that the CTO is talking about innovation, development and general issues related to Bitcoin and cryptocurrency. ”He said.
“The innovation part is really important to Bitfinex. We prove this by developing more than 100 open source projects that are now available. It is therefore logical for me to be the company’s public face. “
Introduction to Bitcoin
Paolo, who grew up in a small town in Italy when he was eight, started programming and reveals that his expansion into Bitcoin was natural as soon as he read the whitepaper.
“My programming career was about building scalable applications and networks. When I found out about Bitcoin in 2012, it was a perfect fit as I was working in finance at the time. ”He added.
“I fell in love after reading the whitepaper because it represented everything I like in terms of a resilient system and so on. Plus, it was a pure finance application that could cause a real disruption in the finance industry.
“After working with banks and hedge funds, it was clear to me that the system was broken. I’m not even talking about the fact that finance is centralized and an obscure industry for billions of people, I’m talking more about the ability for people to look after their own wealth. And that’s why I wanted to make a small contribution to this financial revolution. “
Is there mass adoption here?
With big-name macro investors like Paul Tudor Jones recently confessing to owning Bitcoin, many believe that mass adoption is ahead, but Paolo disagrees.
“There is still a long way to go.” He claimed.
“Mass adoption isn’t here and won’t be for a few years. The main problem is user experience, we have to work a lot on education and user experience. We still use terms like OTC that people don’t understand.
“Everyone understands if you share an account with your wife and need a signature to make the transfer, but if we want to have a bulk adoption we need to develop tools that recreate what users experience in their normal lives.”
Tether’s roller coaster ride to the top
Tether has been a hot topic in the cryptocurrency industry since its inception in 2014. It has been lamented by academics for its alleged role in the 2017 Bull Run, while it has been hailed as a success by traders using it as a tool to get started out of the market.
And while it has taken a lot of control over its perceived irregular banking arrangements and whether it is backed 1: 1 by the dollar, the fact remains that it is by far the largest stablecoin in circulation with a generous demand.
“Things are moving really fast and it is overwhelming to see the flow of money and new requests for Tethers.” Ardoino continued.
“Remember that in 2014 we created almost the entire field of stablecoins.
“We developed the first product and the competition didn’t come until 2018. So for the entire Bull Run of 2017. The moments with the highest volatility were only Tether, so Tether had a really important first mover advantage.”
Overwhelming #Tether + 160M in 24h 🔥🔥🔥 pic.twitter.com/ieOOpt9Vdh
– Paolo Ardoino (@paoloardoino) March 17, 2020
One thing that Tether has done differently from almost all stablecoins is its ability to remain versatile across a number of blockchains, which Ardoino believes was key as it appeals to a wide variety of different communities.
“It’s also important to say that Tether worked really hard to get this badge.” He added. “It’s amazing that stablecoins can be glued to a single blockchain, which for most would be Ethereum. Tether realized that there are many blockchains, each blockchain has its own community. Usually these communities fight against each other, you can see that on social media.
“The common denominator of all blockchains can be a stablecoin that unites all of these communities while offering the same experience and the same spending and redemption across all blockchains.
“We’ve seen the Tron community really pick up on Tether, we’ve seen Liquid push hard on issuing Tether, and now we see exchanges like BTSE using it. If a community big enough asks us to spend tether, there is no reason not to.
“We want to create a liquid stablecoin across communities and blockchains.”
Was Tether Key To Manipulating Bitcoin Price In 2017?
Tether’s role in the 2017 bull market was immense, not because it was a factor in market manipulation as some allegations, but because it was the only stablecoin in circulation, meaning traders were able to hold effective cash positions when Bitcoin started to correct itself from its high of $ 20,000.
However, that’s not the opinion of a group of University of Texas academics who concluded that a “lone bitcoin whale” used tether to raise the price of Bitcoin, despite data suggesting massive increases in retail participation .
Anyone who writes about the “lonely whale” or the Tether / Finex manipulation of Bitcoin was clearly not there in 2017 and / or has no contact whatsoever with a company in the Bitcoin industry.
* Every * Bitcoin company I’ve invested in has seen insane growth in both users and transaction volume
– Alistair Milne (@alistairmilne) November 4, 2019
“We work with regulators around the world and have provided data to many of them,” said Bitfinex’s CTO.
“When it comes to allegations of market manipulation by Bitfinex, we will present various studies” [to prove there is no truth in these false and inflammatory allegations].
“We have had support from across the community. At one point, one of the University of Texas allegations was that a single whale in Bitfinex caused the entire Bull Run.
“You don’t have to be a genius to understand this is a crazy claim.”
Libra and CBDCs
The last year has often been referred to as the “year of the stablecoin,” which is where Facebook came in with its proposed Libra project.
What followed Libra was discussions between central banks and governments that had finally warmed up to the idea of issuing a digital currency, despite criticizing the asset class for the past decade.
The anticipation of the scales became a catalyst for a rally in Bitcoin price as it rose from $ 3,850 to $ 14,000 in a matter of months, but as regulatory fears surfaced, the price of cryptocurrencies began to decline.
Ardoino believes Libra “will have a hard time being successful” and that it will have an even harder time than Tether, and although a CBDC will have a larger market cap than Tether, he sees no threat in that.
FACEBOOK DOES NOT CREATE ITS OWN CRYPTO
Libra is now a system for digital fiat
Zuckerberg bends his knee … https: //t.co/wzjTEC0Uvi
– Ivan on Tech (@IvanOnTech) March 4, 2020
He continued, “Of course you could see governments issuing digital versions of their home currencies like euros or dollars. I think that’s fine and I don’t think it will be a problem for Tether. It’s going to be a great demonstration that Tether was right and that the people need her.
“I think Tether will remain more agile in the sense that we can secure ourselves with technical innovations. It’s not just a stablecoin, it uses DeFi, it’s supposed to launch on the Lightning Network.
“Although we can hardly keep up with a national stablecoin in terms of market capitalization, we will be able to keep up with more use cases and faster adaptation to technological developments.”
Bitfinex pulse
Last week, Coin Rivet reported on the launch of Bitfinex Pulse, a social platform that enables traders to share ideas and analysis.
While it could be compared to a Twitter feed of trade insights in its early days, Ardoino believes that when compared to Bloomberg’s model, it will become the “backbone” of Bitfinex.
“In traditional finance, you’ve seen products like Bloomberg and Reuters with built-in chat, built-in newsfeeds, and lots of tools that are the backbone of the user experience,” he said.
“A trader can trade well on a platform, but he needs newsfeeds, he has to request quotes for OTC, exchange information and store information.
“Retail is not just about buying and selling, but about being informed about breaking news in real time and reaching other people. If you have a large OTC trade, you need to liquidate it ASAP. You want a fully integrated tool kit.
“We developed Bitfinex Pulse, which is a social platform, but at some point it will become the real backbone of Bitfinex.”
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Disclaimer: The author’s views and opinions should not be construed as financial advice. We do not advise on financial products.
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