> The argument presented is very reasonable and requires a rebuttal.

> The other comments on this thread are worthless and just shilling crypto.

Let me try to present a rebuttal which hopefully you will not dismiss as a "shill" for crypto.

To begin, Tether is obviously ridiculous and most people, even in crypto acknowledge this. However, Tether is not precisely an unregulated "central" bank, but rather a semi-regulated private bank. I say semi-regulated, because they do have some oversight (https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle...). It also has many competitors such as USDC, Binance USD, DAI, which are comparable in size: https://coinmarketcap.com/view/stablecoin/. USDT is less than half of the stablecoin market by capitalization, but it is over 80% of the daily transaction volume of the stablecoin market.

If we dig a little deeper though, you can see that the daily transaction volume of Tether often exceeds its market cap: https://nomics.com/assets/usdt-tether/history. This suggests that most owners of Tether are only holding it for a short period of time, which make sense given that on centralized exchanges like Binance it many, if not most, markets are denominated in USDT as one half of a trading pair.

So why, if Tether is generally understood by the market to be backed by nothing, and run by dubious individuals, is it still worth something? It's not because people are stupid, but because of a combination of 1. the enormous international demand for cryptocurrency assets, 2. the lack of sufficient "backed" digital dollars to efficiently lubricate the quantity of transactions people want to make and 3. Gresham's Law (https://en.wikipedia.org/wiki/Gresham's_law), which says given two kinds of commodity money, people will spend the less valuable one, and save the more valuable one.

It's honestly a fascinating example of a money forming out of the matrix of exchanges in a barter economy, and yes, it's a dubious product that will likely break its peg and crash to nothing at some point. But because the total market cap is relatively small, there's not really any significant contagion or
"bank run" risk here (BTC lost more than Tether's entire market cap today and mostly people just shrug and say "that's crypto").

The question I want you and all people who say "crypto is a fraud, ponzi scheme, has no value" to ask yourself is "If I'm right, why is there such demand to buy crypto?". Some crypto-critics argue it is because people are stupid and greedy, but to me that's a lazy and elitist answer. My interpretation is that crypto demand is driven by the same forces that cause people to buy condo's in New York City, London, Vancouver, etc. which then sit empty. It's mostly, right now, a combination of inflation and capital flight.

But there is also a growing sector of the crypto-economy which is capable of doing things which are not feasible in traditional finance (e.g. crowd-funding like Gitcoin, anonymous payments like ZCash, or decentralized money like MakerDAO). I don't think current crypto-asset valuations are justified by that sector, but I am hopeful that in the coming years those use cases will grow and will create extraordinary value for the world.