Havven Stablecoin Founder Gets Candid About Tether and eGold Comparison
Havven Founder Claims Tether is Increasingly Looking Similar to eGold
eGold was a false start to digital currencies that predates the Bitcoin. The coin, which was created by Douglas Jackson, made significant headway into creating a digital currency. This was years before the white paper by Satoshi Nakamoto was published.
The idea that the internet would require its own currency is older than that. Before eGold, there was a currency called DigiCash. Before the DigiCash, cypherpunks and futurists were discussing how such a currency was going to work.
eGold was quite popular for some time, and it was quite effective. There was over $2 billion that was sent through the system in 2016. Best of all the currency was backed by real gold. However, it ran into similar issues to Bitcoin. Media reports showed that criminals favored it. Credit Card thieves would use the eGold to cash out stolen cards and converting it back to fiat. While eGold wanted to work with governments to track criminals, the government favored shutting it down.
The eGold was shut down with ease. This was because it was a centralized digital currency. All that it took was a criminal case against Jackson and denial of permits needed for compliance. However, this is not possible with Bitcoin, and the authorities know that.
Tether Works Like eGold
According to Warwick, the issue is not whether Tether is collateralized. The issue is the inherent risk of interference. You have a private entity, which has bank accounts with money in them. If the authorities decide they do not like it, they could simply shut it down. None of the manipulation and collateralized discussions will play a role in the Tether downfall.
Centralization can easily destroy Tether. The US government has shown in the past that they do not favor digital currency. If they could shut down Bitcoin, they would. At some point, they will set their sights on Tether once they discover it is easy to take down.
Warwick Has A Point
The point raised by Warwick is genuine. Nothing can keep law enforcement from shutting down Tether or Bitfinex. When this happens, it will probably crash the crypto markets. The only reason Tether is still around is due to inaction by the authorities. This may be due to the shadow of un-regulability that cryptocurrency casts. However, the moment they realize they can hurt crypto by shutting down Tether, they will not hesitate. Such a hit on the crypto world could take years to heal.
In fact, Warwick suggests that if eGold were created in the post Bitcoin world, it would still be around. This is because Bitcoin is offering Tether and central exchanges a massive smokescreen. Since the regulators have no idea how any of them work, they assume they are all like Bitcoin. However, they may realize they can shut down significant portions of the crypto world and decide to act.