News about USDT (Tether) appearing on Bitcoin and Lightning via Taproot assets is filled with mixed reactions.
Some people think it's good for Bitcoin (in fact, I know that most of the time, based on a small survey I did with X, the sample size isn't as big as the results are. I share it anyway) I'm not that enthusiastic about that.
Here are the Bitcoin and Lightning Tethers (USDT):
(Please share your reason in the comments after voting.)
– Frankcorva (@frankcorva) February 13, 2025
“Other” includes me. I'm not that enthusiastic about that.
That said, I tried to be open-minded.
I recently profiled Jesse Shrader, co-founder and CEO of Amboss, which provides intelligent payment infrastructure for payments for Lightning, a USDT advocate for Bitcoin and Lightning. The advantage of being able to trade in digital US dollars over lightning.
In my interview with Shraddha, he created the following points:
- The proliferation of USDT proves that there is global demand for US dollars
- USDT is a massive payment mechanism. In 2024, we will process over $10 trillion in payments over Mastercard, with some of these payments being made more than lightning
- USDT brings more liquidity to your Lightning network. This helps your network grow and process larger payments
From a business perspective, it is difficult to argue that the above is not a valid reason to bring USDT to lightning. And as someone who believes that people should freely spend the money they like, I cannot argue with them when I see them through a practical lens.
But I believe there is a price to bring USDT to Bitcoin and lightning.
One dimension of that price is technical, the other is philosophical.
At the technical level, running USDT via Bitcoin can put lightning in danger of Bitcoin's security.
If the Bitcoin network is operating, like another Bitcoin hard fork that rivals what we saw during the block size war, a larger economic node on the Bitcoin network, something operated by Coinbase. The US spot Bitcoin support the ETF in the US when managing many of Bitcoin, supports the “tether fork” of the network. This could include other changes to the network that could endanger Bitcoin security in the long run.
In other words, if Coinbase, Tether, and several other major players in Bitcoin Space Support are pushing for “Tether forks,” other major economic nodes will likely follow suit.
Plus, anyone using USDT in Bitcoin and Lightning could also support that aspect of the fork. This is because USDT remaining in non-tethered fork chains is likely to be invalid.
Lynn Alden writes about this in her essay, “Stakes of Proof and Stubcoins: The Dilemma of Blockchain Centralization.”
In this article, she said, “Custodians can invalidate the value of all stubcoins on either side of the fork as not deemed correct.”
Certainly, Alden was referring to smart contract blockchains like Ethereum and Solana, which rely heavily on Defi, the main element when Stablecoins wrote this, but the same goes for Bitcoin applies. (Alden was right in this claim when he saw Ethereum shifting to a proving work consensus mechanism during 2022's “The Merge.”
After registration, stubcoin issuers like Circles and Tethers continued to support Ethereum's tokenized US dollars, not Ethereum (ETHW), an old chain that continued to implement workplace proof consensus algorithms. Ta. )
The same type of scenario could be deployed in Bitcoin if a chain split occurs, and Tether gives an incredible amount of power over Bitcoin.
Another reason why I don't like USDT with Bitcoin is philosophical.
Released worldwide in the wake of the major financial crisis of 2007-2009, Bitcoin was created as an alternative to the US dollar.
At the time, dollars were printed. Mars Break down the same banks that caused the crisis (i.e., it fell).
Bitcoin, money that cannot be printed on the whims of governments and central banks, was created to compete with the US dollar rather than to support it.
It brings USDT, a mechanism the US government uses to support US dollar hegemony around the world, and I feel Bitcoin is morally wrong to me.
So, on a practical level, there are people who support why USDT comes to Bitcoin and lightning. Many people miss the big picture in that both Bitcoin is placed in a vulnerable position and some of its value propositions are (probably temporary) as a result I think so.
This article is a take. The opinions expressed are entirely the authors and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
