Tether (USDT) falls into a new class of cryptocurrencies called stable coins. These coins aim to keep cryptocurrency valuations stable, as opposed to the volatile yet popular cryptocurrencies like Bitcoin and Ethereum. This attribute allows the use of USDT as a medium of exchange and a store of value, instead of being purely a medium for speculative investments.
Tether specifically belongs to the category of fiat collateralized stablecoins. This means a fiat currency like the US dollar, the euro, backs each crypto coin in circulation. Other stable coin categories include crypto-collateralized stablecoins, which use cryptocurrency reserves as collateral, or non-collateralized stablecoins, which don’t have any collateral but operate in a way similar to that of a reserve bank to maintain the necessary supply of tokens, depending on the economic situation.
The goal of Tether’s design is specifically to build the necessary bridge between fiat currencies and cryptocurrencies and offer stability, transparency and minimal transaction charges to users. It is pegged against the U.S. dollar and maintains a 1-to-1 ratio with the U.S. dollar in terms of value. However, there is no guarantee by Tether Ltd. for any right of redemption or exchange of Tethers for real money – that is, Tethers cannot be exchanged for U.S. dollars.
Tether was launched as RealCoin in July 2014 and was rebranded as Tether in November by Tether Ltd. The company that is responsible for maintaining the reserve amounts of fiat currency. It started trading in February 2015.
Simply put Tether is a crypto graphic token representing a FIAT bank balance. The issuance of the Token is maintained by Tether Ltd. The Token, specifically USDT can be used to move US dollar balances between two parties within seconds. All of this can happen without actually having access to real US dollars.
USDT can be traded on South Africa’s favourite crypto currency exchange iCE3 Exchange. You can find the BTC/USDT market here https://ice3.com/btc-usdt. It is reported that as much as 80% of bitcoin trading is done using Tether.
Tether was orignially launched on the Omni Protocol (Omni has been built on top of bitcoin blockchain which provides a decentralized, distributed and peer to peer platform for trading. This trading platform came into being by the cumulative efforts of a team called Omni Layer who wanted to facilitate a simple effortless, trustless and peerless exchange between different parties without having to involve a middle person.) This implementation is sometimes refered to as USDTo
Tether swapped a large portion to the ethereum network with some of the most notoicible “swaps” occuring during 2019. This gave birth to a new reference USDTe (USD Tether represented as an ERC20 token)
The latest blockchain to play host to Tether tokens is the TRON network, with tokens being referred to as USDTt
A spokesperson for Tether has said that the CEO of both firms is Jan Ludovicus van der Velde. According to Tether’s website, the Hong Kong-based Tether Limited is a fully owned subsidiary of Tether Holdings Limited. More information is available on Wikipedia