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What is Tether (USDT)?
Tether is a token issued by Tether Limited, which is in turn controlled by Bitfinex. Tether is deemed as a Stablecoin, because tether was created to maintain a constant value of 1 US dollar such that, 1 tether issued = 1.00 US Dollar. Tether is traded with the code USDT in the world crypto exchanges.
Later tether limited has claimed that a very minor quantity of total circulation of Tether is backed by real money. The majority of the volume of Tether / USDT is backed by commercial paper, which is nothing but unsecured promissory notes.
Who are the founders of Tether (USDT)?
The precursor of Tether is Realcoin which was originally developed by Brock Pierce, R.Collins and Sellars in 2014. Real contain had a very humble inception as a startup based out of Santa Monica. The first Realcoin tokens were circulated on the 6th of October, 2014.
These initial tokens were developed based on Bitcoin blockchain technology. The original Realcoin project was renamed tether on the 20th of November, 2014. An announcement for the same was made by the CEO of Tether, R.Collins.
The company has also made an update to the existing tether tokens and made them available for three fiat currencies, which are US dollar, European Euro and Japanese Yen as US Dollar Tether, EuroTether, YenTether.
The company has claimed that every Tether in circulation in the world is backed by 100% real money, which has later given rise to various lawsuits and conspiracies woven around the currency backing Tether in circulation.
Bitfinex, a cryptocurrency exchange platform, permitted Tether trading separately in the year 2015. Being a distinct world’s largest cryptocurrency exchange, Bitfinex getting involved in discrepancies has caught the attention of the crypto world.
Tether has further smeared mud by publicly announcing that international transfers have been blocked, after the much popular Wells Fargo- Taiwanese banks Fiasco.
Tether issues coins based on a wide array of platforms like Bitcoin ( Omni Layer), SLP, Ethereum, Tron platforms, OMG and Algogrand blockchains. There are different types of tether coins like Omni Tether, TRC20 Tether, EOS Tether, ERC20 Tether and
From early 2017 to late 2018, the magnitude of outstanding tether coins started with 10 million and grew close to 3 billion dollars.
In the year 2018 alone, Tether has been considered for a 10% of bitcoins traded volume, which increased to a staggering 80% in the same year.
Institutional studies show that the price manipulation strategy deployed by Tether has helped increase the bitcoin price by at least 50%. In August of 2018, 500 million dollars of Tether were issued into circulation.
How does Tether (USDT) Work?
Tether is claimed to be a Stablecoin type of Cryptocurrency, which means that it is constantly backed by a fixed value of the currency. The tether tokens were issued based on the tethered network.
Tether is used by crypto investors who are passive in taking risks and thus they chose tether as tether value is mostly stable. The US Attorney General has accused the parent company of tether for hiding a loss of 850 Million US Dollars in 2019.
How to use Tether (USDT)?
Tether tokens are not money but similar to any digital currencies that move across the blockchain. The digital tokens of Tether are formatted to work on blockchains.
Individuals can transact with Tether tokens on platforms that are Tether enabled.
Tether tokens are usable everywhere where one can use digital currency. It is also useful in many places where digital currencies are not acceptable.
What makes Tether (USDT) unique?
Unlike Bitcoin and ETH which cause volatility in the value of Fiat currencies, Stable coins like tether are aimed at decreasing the volatility associated with Fiat currencies.
This advantage of tether over other cryptocurrencies has made it a viable option for people who like to store the coins in huge quantities over time and made it suitable for transactions.
These advantages have made tether the 3rd largest cryptocurrency in terms of Market Capitalization. Even in the stable coins category, tether belongs to the subcategory of fiat currency collateralized coins sub-category, where the tether coins are backed by collateralizing fiat currencies.
Tether was specially designed for filling the gaps between Fiat currencies and cryptocurrencies and to offer utmost trading comfort to the traders. There are some non-collateralized stable coins as well, which act similar to reserve banks in various countries.
How secure is Tether (USDT)?
Due to the large and decentralized nature of the tethered network, it is not prone to risks like black swan events and other tampering. It also can be traded on a peer-to-peer basis.
Currently, tether tokens can be generated on various blockchains like bitcoin, ETH, Algogrand and TRON.
The security of the blockchain is taken care of by developers and miners who mine these coins with the help of concepts like proof-of-work or proof-of-stake. These audits help in detecting the flaws and abnormalities in the security and chain framework.
How many Tether (USDT) coins are in circulation?
It is estimated that Tether has a circulating supply of 65,490,575,253 USDT as of now, with the total supply being 67,357,085,236 USDT and the maximum supply being unknown. Tether, having Tether tokens that are worth more than close to $60 billion worth in circulation, is deemed to have more deposits than that of many banks in the United States
Conclusion
Numerous factors influence the price and value of tether. Even though it is a stable coin, still it is not prone to some minor fluctuations.
Market sentiments, Market inflows and outflows, total market cap. value, sports, political developments, natural disasters, recession and other factors majorly influence the price of the coins.
Tether has a current traded volume of 6.5 billion and a market cap which has placed the coin in 5th place among all the highest traded cryptocurrencies in the world. With stability, technology and ease of use advocating the advantages of tether/ USDT are expected to see more growth in the upcoming years.
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