Everything’s well with Tether (USDT) after an unexpected glitch on Monday
Everything seems to be normal on the trading front as Tether (USDT), the eighth largest cryptocurrency and the second most traded currency behind bitcoin resumed normal business. The cryptocurrency suffered an unexpected glitch yesterday and stopped working. The tether transactions appeared to be stagnated and had come to a standstill for nearly eight hours on Monday, causing wild speculations in the market.
The USD-pegged stablecoin, which its issuer says is backed by physical dollars stored in company-controlled bank accounts, operates as a token on top of the Omni protocol, which itself is secured by the bitcoin blockchain.
On Monday, users of Omni’s hosted wallet and block explorer services noticed that transactions had stalled. Omni developers said that the issue stemmed, not from any problem with the platform’s actual protocol, but with the parsing engine that feeds data to Omni Explorer and Omniwallet.
We are experiencing an issue with the parsing engine that feeds data to Omniexplorer and Omniwallet. It is being investigated.
— Omni (@Omni_Layer) September 17, 2018
Was Tether responsible for low BTC trade volumes?
However, the incident sparked off speculations that something more serious had happened, like a hack or other technical glitches affecting Tether.
Nothing was heard from the Tether side, which as usual didn’t address the issue directly and retweeted Omni’s original tweet that it had identified the problem with the parsing engine that feeds data to the wallet and the blockchain explorer.
Nevertheless, it seems that many applications and services that support tether, including exchanges, were using Omni’s free hosted API service rather than running their own full nodes. Consequently, transactions through these platforms froze throughout the incident, which lasted nearly eight hours, much more than what was expected by the developers.
So, we can safely conclude that Tether (USDT) was not the cause for low BTC trade volumes witnessed on the 17th of September. This is due to the fact that the glitch in verifying the data was from the backend of Omni Layer that operates Omni Explorer: a platform that tracks USDT transactions.
The incident of low bitcoin trade was an independent phenomenon in itself and an indication of things to come with the bearish trend in the market set to continue further.
Tether is currently positioned as the eighth-largest cryptocurrency, with a circulating market cap of $2.754 billion at the time of writing. The firm’s “treasury” has not issued any new tokens since Sept. 2, when it sent 100 million USDT from the treasury address to Bitfinex.
Image via Shutterstock
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