Bitfinex’s Paolo Ardoino on the success and control of Tether

This week, Tether became the third largest cryptocurrency by market cap, with more than $ 10 billion in stable coins issued since its inception.

Coin Rivet spoke to Paolo Ardoino, CTO of Bitfinex and in particular the man at the forefront of Tether’s development.

Ardoino’s role at Bitfinex and Tether is large and extends to the exchange’s matching engine and the issuing of new Tethers. One thing that sets him apart from other CTOs in the industry is his forward-thinking attitude on social media.

“Crypto is a super technical industry. I think it’s a good thing for the CTO to talk about innovation, development, and general issues related to Bitcoin and cryptocurrency. ” He said.

“Bitfinex really does take care of the innovation part. We prove this by developing more than 100 open source projects that are now available. So it makes sense for me to be the company’s public face. “

Introduction to Bitcoin

Paolo, who started coding in a small town in Italy at the age of eight, shows that his expansion into Bitcoin was natural once he read the white paper.

“My career as a programmer was about building scalable applications and networks. When I found out about Bitcoin in 2012, it was a perfect fit because I was in finance at the time, ”he added.

“After reading the white paper, I fell in love with everything I liked about a resilient system, and so on. Plus, it was a pure finance application that could create a real disruption in the finance industry.

“After working with banks and hedge funds, I knew the system was broken. I’m not even talking about the fact that finances are centralized and an obscure industry for billions of people, but rather the ability to get people to look after their own wealth. And that’s why I just wanted to make a small contribution to this financial revolution. “

Is there mass adoption here?

Given that renowned macro investors like Paul Tudor Jones recently confessed to owning Bitcoin, many believe that mass adoption is upon us, but Paolo disagrees.

“There is still a long way to go.” He claimed.

“Mass adoption is not here and won’t be here for a few years. The main problem is the 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 have a joint account with your wife and need a signature for the transfer. However, if we want bulk adoption, we need to create tools that mimic the experiences users are used to 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 scholars for its alleged role in the 2017 bull run, while it is hailed as a success by traders who use it as a tool for getting in and out of the market.

And while it has put a lot of scrutiny 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 stable coin in circulation with a generous one Demand is.

“Things are moving very quickly and it is mind blowing to see the influx of cash and new requests for Tethers.” Ardoino continued.

“Remember that in 2014 we created almost the entire field of stable coins.

“We developed the first product and the competition didn’t come until 2018. So only Tether was available for the entire 2017 bull run. So the highest volatility moments were available, so Tether had a really important first-mover advantage.”

Madness #tether + 160M in 24h 🔥🔥🔥

– Paolo Ardoino (@paoloardoino) March 17, 2020

One thing that Tether has done differently than almost all stablecoins is its ability to remain eclectic across a number of blockchains, which Ardoino sees as key to unlocking a wide variety of different communities.

“It’s also important to say that Tether worked really hard to maintain this badge.” He added. “It’s amazing that stablecoins can stick to a single blockchain, that would be Ethereum for most of them. Tether realized that there are many blockchains, each blockchain has its own community. Usually these communities fight each other, you can see that on social media.

“The common denominator of all blockchains can be a stable coin that unites all of these communities while offering the same experience as well as the same issue and redemption for all blockchains.

“We’ve seen the Tron community really pick up on Tether, we’ve seen Liquid go to great lengths to get Tether out, and now we’re seeing exchanges like BTSE using it. If a community big enough asks us to release Tether, we have no reason not to.

“We want to create a fluid stable coin 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 of market manipulation as some allegations, but because it was the only stable coin floating around, which meant that traders could hold effective cash positions when Bitcoin started off correcting its $ 20,000 high.

But that’s not what a group of University of Texas scientists think, who concluded that a “lone bitcoin whale” used tether to raise the price of bitcoin, despite data pointing to massive spikes 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 contacts 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 presented data to many of them,” said Bitfinex’s CTO.

“When it comes to allegations that Bitfinex manipulates the market, we will present various studies [to prove there is no truth in these false and inflammatory allegations].

“We saw support from the entire 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 that this is a crazy claim.”

Libra and CBDCs

The last year has often been referred to as the “year of the stablecoin,” which was when Facebook stepped in with its proposed Libra project.

What followed the Libra were discussions between central banks and governments that eventually warmed 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 price hike in Bitcoin, which rose from $ 3,850 to $ 14,000 in a matter of months, but as regulatory fears surfaced, cryptocurrency prices began to fade.

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 does not see this as a threat.


Libra is now a system for digital fiat

Zuckerberg bends his knee … https: //

– 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. It’s obvious that cracking a number can create a market cap that is larger than Tether. 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 continue to focus on technical innovations. Not only is it a stable coin, it uses DeFi, it is meant to launch on the Lightning network.

“While we will barely be able to compete in terms of market capitalization compared to a national stablecoin, we will be able to compete in more use cases and a faster adoption of technology.”

Bitfinex Pulse

Last week Coin Rivet reported on the launch of Bitfinex Pulse, a social platform where traders can share ideas and analysis.

While it could be likened to a Twitter feed of trade insights in its early days, Ardoino believes it will become the “backbone” of Bitfinex after comparisons are made to Bloomberg’s model.

“In traditional finance, you’ve seen products like Bloomberg and Reuters that have built-in chat and newsfeeds. You have many tools that are the backbone of the user experience.” He said.

“A trader can trade on a platform without any problems, but he needs newsfeeds, he needs to request quotes for OTC, he needs to exchange information and store information.

“Trading is not just about buying and selling, but also about being informed about the latest news in real time and reaching other people. When you have a large OTC trade, you need to liquidate ASAP. You want a fully integrated set of tools.

“We developed Bitfinex Pulse, which is a social platform, but at some point it becomes the real backbone of Bitfinex.”

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