Abstract
Tether is a stablecoin, namely a cryptocurrency associated with an underlying security. Tether provides one of the most relevant ways to buy bitcoins and has been the centre of many controversies. In fact, it has been hypothesized that new tethers are issued without the underlying reserves, and that new massive Tether emissions are the basis of strong speculative movements on the Bitcoin, with consequent bubble effects. In the course of this article, we conduct a Social Network Analysis focused on the Tether transaction graph to identify the main actors that play a leading role on the network and characterize the transaction flow between them. From our analysis, we conclude that 1) the Tether transaction network does not enjoy the Smallworld property, with the robustness and reliability it carries with it; 2) cryptopcurrency exchanges are the nodes with the greatest centrality; 3) even Assortativity is not found, as the subjects who move Tether on a large scale do not give continuity to their presence and operations, therefore do not get a chance to consolidate stable links between them; and 4) among the exchanges, Bitfinex, which has co-ownership and co-administration relationships with the Tether issuer, can be mostly associated with the Rich-gets-Richer property.
Highlights
Stablecoins are cryptocurrencies whose values are tied to external assets, such as the US dollar or gold, in order to maintain a stable price
Social Network Analysis (SNA) is a methodology based on the assumption that complex structures can be modeled as networks, by exploiting the mathematics of graph theory and viewing the relationships between the entities involved as social interactions
We have reported some analyzes performed by Maesa et al (2018) to make a comparison with Bitcoin
Summary
Stablecoins are cryptocurrencies whose values are tied to external assets, such as the US dollar or gold, in order to maintain a stable price. If these promises are kept, stablecoins could become more common for buying and selling goods and services than other cryptocurrencies, which are highly volatile due to the strong speculative activities they are subject to and are perceived to be unreliable for this purpose They could in turn become viable alternatives to those fiat currencies that are unstable from being linked to national economies affected by instability, hyperinflationary trends, financial defaults and other problems in the same category. A user is in this way allowed to redeem one unit of a stablecoin for one unit of the asset supporting it. Based on such general principles, several stablecoin projects were started. Internet giant Facebook launched the Libra project, later renamed Diem, with
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
