DeutschTether released its own wallet app. The stablecoin giant wants to use it to kickstart progress in the crypto industry. Although promising concepts have been implemented, several experts are now warning against using the Tether Wallet. They claim it threatens user privacy.
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Tether Wallet: New app focuses on mass adoption
Last week, the stablecoin operator Tether released its own wallet. The Tether Wallet offers users the ability to manage various digital assets. The company focused primarily on supporting its own tokens.
As such, the Tether Wallet is intended to primarily serve users of the USDT stablecoin. The regulated stablecoin USAT, as well as the gold token XAUT and Bitcoin, are also supported. The issuer is focusing on concepts suitable for the mass market.
They are deliberately moving away from certain technologies and trying to establish a new status quo instead. Alphanumeric blockchain addresses, for example, are intended to be a thing of the past. Instead, Tether relies on simple addresses in email format.
“These currencies are supported across multiple networks, and the wallet was developed to remove the technical hurdles that have previously prevented broader adoption of digital assets,” they explained.
“Users can send funds using a simple, human-readable identifier like name@tether.me, eliminating the need to work with long, error-prone wallet addresses and reducing the risk of irreversible mistakes,” they continued.
A well-known problem with network fees is also eliminated by the wallet.
“Transactions can be carried out without users needing to hold separate network or gas tokens; fees are paid directly in the currency being transferred, eliminating one of the most persistent sources of friction on the blockchain.”
While the wallet is for self-custody—meaning it is a non-custodial wallet—Tether can still remotely block tokens like USDT due to their technical functionality. It is available for both Android and iOS and can be obtained via the Play Store, App Store, and the official website.
Why experts are warning against Tether’s new app
While the concept of the Tether Wallet sounds progressive at first, some experts still criticized the new app after taking a closer look. According to them, it poses enormous risks to user privacy.
A commentator with the username Psacramento_x revealed just one day after the wallet’s release that it is possible to scrutinize Lightning transactions.
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The Lightning Network is a concept for scaling the low-throughput Bitcoin blockchain. Because it is a network of payment channels, transaction data is usually not publicly viewable.
However, through the implementation of the Spark payment protocol, data can be extracted that harms user privacy. This supposedly allows all Lightning transactions linked to a Tether address to be tracked. The data can be queried via a specially set up website.
“I find it strange that both Wallet of Satoshi and Tether use a version of Spark in their wallets that allows anyone to view other users’ transaction history. Why are they doing this?” X user Wicked asked on Friday.
Wicked and several other commentators suspect that this decision was made deliberately. They believe there may be a conscious effort to undermine the privacy of Lightning users. Wicked believes that the Spark protocol can also be implemented in a way that preserves data protection.
