What is Tether?
Tether is the first of the stablecoins and as of 2021, it is still the most used. Stablecoins are Cryptocurrency tokens that are designed to reduce volatility, they achieve this by being pegged to a more stable asset. These stable assets will most often be fiat currencies but can also be commodities like gold. Tether Limited is a company that provides these Blockchain-based assets backed by fiat currencies and commodities.
Tether offers a pegged USD (via the coin USDT), but also supports the Chinese Yuan (CNHT), and Euro (EURT). In addition to these 3 fiat stablecoins, there is also XAUT, which is backed by the price of 1 oz. of gold.
Increasingly there are more stablecoins, and even Facebook has got into the industry with its stablecoin Libra which it announced in 2019 before renaming it, Diem.
The History Of Tether
Tether was initially launched as Realcoin and built on top of Bitcoin’s Blockchain in July 2014. The founders were Brock Pierce, Craig Sellars, and Reeve Collins.
Brock had a background as an entrepreneur in both the Entertainment and Crypto sectors. He co-founded Blockchain Capital in 2013, a venture capital firm, as well as being Director of the Bitcoin Foundation – which as the name suggests looks to promote Bitcoin.
Craig was a member of the Omni Foundation. The Omni layer Protocol enables users to trade and create currencies and smart contracts on the Bitcoin Blockchain (more on this shortly).
Reeve was involved in businesses ranging from Traffic Marketplace (an online ad network business) and even online gambling with Pala Interactive.
After its birth as Realcoin, the Omni layer protocol was then used to form USTether. Since then it has gone on to be renamed again to just Tether (USDT). After initially being built solely of the Bitcoin Blockchain, it now also leverages Algorand, EOSIO, Ethereum, OMG, and Tron Blockchains.
Concerns have been flagged about Tether’s claims about USD reserves which have had knock-on effects on Tether’s price making it fall to $0.88. A substantial drop considering it should always be set to $1. Many claim that until there is an independent third party that can audit and substantiate Tether’s claims, there should be doubt over the Tether reserves of USD.
How Tether Works
Tether is built on the Blockchain of a number of Crypto assets including Bitcoin, Algorand, EOS, Ethereum, OMG Network, and Tron.
Tether Limited destroys and mints Tether tokens accordingly with the reserve levels they control of fiat currencies (USD, Chinese Yuan and EUR) and the commodity of gold.
Traders now regularly use stablecoins like Tether to convert Cryptocurrencies into as they’re backed by USD. This enables them to have a stable asset in their exchange account and traders are then more readily available to use it to buy Cryptocurrencies back. It also means they don’t have to deposit more fiat into their Exchange account when they choose to buy more and they avoid the volatility of altcoins in the meantime.
So now you know what Tether is, if you’re looking for where to buy Tether, the team at Complete Crypto has reviewed the best Crypto Exchanges which support Tether.
If you want to learn more about stablecoins, check out our guide here to learn more.