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Tether - the history of one cryptocurrency

2019-12-24

Tether Limited is the first organization in the world to develop a platform with the ability to use ordinary state currency in the digital money format. This altcoin is called Tether (USDT) and is tied to real funds such as the dollar, euro and yen. The company issuing the token claims that it is supported by a stock of money in its accounts, in other words: 1,000 USDT is equivalent to 1,000 of the state currency. The organization operates in all countries where cryptocurrency is allowed to operate. This material is dedicated to digital money Tether, or, as they are commonly called, stablecoins.

About Tether

Virtual currency Tezer is a digital fund that differs from other tokens in the provision of fiat funds. This characteristic completely excludes the possibility of speculation, which often forces a person to refuse to use cryptocurrency. However, it should be understood that this token is completely dependent on the exchange rate of the American dollar, which means that if the latter falls in price, the coin will lose exactly the same amount. However, exchange rate fluctuations usually occur in the range of 1 cent.

Tether is developed on the basis of the open source Omni Layer protocol, which operates in conjunction with the blockchain. The coins are created on the basis of the Bitcoin platform.

Tether blockchain is a kind of virtual finance protected by a crypto code. It does not have a preset "ceiling", so that it is available for emission to anyone. The stability of the quotes is ensured by fiat funds, the support of the coin is carried out by trust organizations.

How is Tether created?

The history of the creation of the coin dates back to 2015. It was then that the organization Tether Limited, at the initiative of the Bitfinex cryptocurrency exchange, issued a token. This exchange was the first to include the coin in its own listing. Almost immediately after the release, the coin joined the list of cryptocurrencies on another major US platform - Poloniex.

The founders of the organization are Bitfinex CFO Giancarlo Devasini and its CEO Philip Porter. The location of the corporation is the British Virgin Islands. At first, the coin was called Realcoin, it was ordinary and did not have the ability to compete with the well-known coins. Then a decision was made to improve it: reforms were carried out in technology, and the token received a new name. These changes were necessary to survive in the brutal world of electronic money. Thus, the Tether cryptocurrency appeared, which became comfortable for both private users and business companies.

At the end of January 2018, Bloomberg published information about the sending of the ships notice to Tether Limited and Bitfinex. It was from the Futures Trading Commission. The agenda spoke of suspicions about the real backing of Tether with an equivalent amount of the state currency of 2.3 billion USDT. In March 2019, the founders announced that the coin is being supported not only by cash, but also through loans from outstanding sister companies. And after about a month and a half, the founders again made a statement, which said that only 74 percent of the coins were backed by the US dollar. However, the story does not end with these facts, and due to the active use of the token, we have every chance to see what will happen next.

Tether features

As of the end of October 2019, experts in the world of cryptocurrency believe that Tether is gaining popularity in the format of a payment system on a par with Bitcoin and Ethereum. The same Bloomberg publication published information in which, according to information provided by Coin Payments, the size of financial transactions associated with Tether, compared to last years indicators, rose thirtyfold. In addition, USDT moved Ethereum to the third position in the list of the most used cryptocurrencies for payments.

Sean McKay at Coin Payments noted that as the cost of Tether equates to the price of $ 1, people are increasingly choosing USDT as a payment instrument in order to protect their savings from fluctuations in the exchange rate. “As a rule, sellers accepted Ethereum, Bitcoin and Ripple, and then transferred them to Tezer to protect against exchange rate volatility. They now accept payments directly in USDT, ”McKay said.

Also, according to Bloomberg, USDT is quite popular on gambling resources and in online stores that have difficulties with bank transfers. In addition, the stablecoin provides an opportunity to hedge against high fees.

A country as vast as China is recording a tremendous trading activity associated with Tezer. Traders from the Middle Kingdom are increasingly using USDT to purchase BTC. In turn, Tether Limited produced a coin backed by the offshore Chinese yuan.

Based on the information at the time of this writing, namely December 1, 2019, the price of Tether is $ 1.01.

Is Tether Infinite?

In comparison to Bitcoin, Tether is supported by the state currency held in the trust accounts of the corporation. It was developed as an alternative to fiat money and to eliminate intermediation in transactions. The main purpose of USDT is to introduce fiat finance into the blockchain by converting it into a digital code. To date, this technology is considered the most successful both for the storage and transfer of funds, and from a security point of view.

The activity of the token is supported by the reliability of relations with trust organizations and state support. USDT cryptocurrency has some peculiarities. First, it has no transaction blocks. Also, the number of tokens is limited only by investments in the accounts of the creator organization.

The transfer is carried out using financial transfers to Tether Limited accounts. The corporation produces an equivalent number of stablecoins backed by tangible assets. Users have at their disposal multiple transfers, mutual sending of coins or an exchange.

Confidentiality in the implementation of these transactions is reduced to zero due to the transfer of funds to an account where the user will need to perform the KYC procedure. For this, personal information is provided: passport information, residence address and other data. The creators have almost complete information about the customers. Thanks to the Bitcoin blockchain, transactions are carried out quite quickly.

Mining a token is impossible by existing methods due to the generation only after the currency is provided with finance.

Tether strengths

This currency is quite easy to use. Tether can be easily transferred to any wallet that supports Omni. Tezer does not charge funds for the transfer, but other exchanges or wallets can do this. To convert USDT to USD and back, the user will have to pay a small amount.

It is possible to sell or buy Tether for BTC on most cryptocurrency exchanges or using the official token platform. To use the latter, the user needs:

create an account on the site;
activate two-factor recognition, which adds an additional layer of security to your account;
confirm your account using email;
go through the verification procedure.
After completing the above steps, the user will receive an electronic wallet address, which he will use to receive coins. It is also possible to store cryptocurrency here. The minimum amount of finance for input / output is 1 token. Commission payments are not charged. In addition to this resource, many other wallets support this cryptocurrency. It is also possible to store USDT on an exchange, but in this case there is a high probability of being attacked.

Many coin holders receive income based on fluctuations in cryptocurrency rates. Stablecoin Tether can be bought at an almost fixed cost. There is no reason to hope for ups and downs. Investments in USDT can be called a 0 percent deposit. However, Tether acts as an alternative to real funds and brings huge benefits to depositors and traders. Here are the main ones:

Efficiency of transactions. Manipulations with the US dollar for deposit / withdrawal to exchanges of other countries take a rather long period of time. Moreover, working on weekends and holidays is a separate "pleasure". Financial transactions with USDT take only a few minutes, which plays an important role in trading.
Transaction costs. Transfers between countries, as a rule, involve commission payments. There may also be additional rates for converting, other write-offs of funds from the balance. Activities through cryptocurrency wallets are free of charge.
Stable price. Digital currencies are inherently volatile. Stable value benefits traders: for example, by purchasing ETH for BTC, the user receives the required number of tokens. When the price rises by 15%, the trader changes it to bitcoin in order to generate income. While the transaction is being carried out, the coin falls in price, for example, by 20%, this leads to financial losses. If a user uses Tezer, the only concern is the price of Ethereum.


Tether in TOP currencies

Thanks to the use of blockchain technology, the Tether cryptocurrency has the following advantages:

provides security from fraudsters and hacker attacks;
stability in the cryptocurrency market;
small size of the commission for the transfer of finance;
maximum transaction speed;
low volatility due to the provision of fiat funds;
the use of blockchain makes it possible to perform financial transactions with a minimum of time and material costs;
every person is able to deposit / withdraw funds without opening a bank account;
wide range of action: many sites work with Tether;
individuals and legal entities are in identical conditions.
However, in addition to its undeniable advantages, Tether also has some imperfections. The main one is the accusation that the company makes tokens out of thin air, that is, some of the coins are not backed by the state currency. Also, if you look, users are not provided with any guarantees. However, this is not a very rare occurrence in the cryptocurrency world.

Thinking about the future prospects for Tether, a mixed picture emerges. In theory, USDT can be converted into dollars at any time using the native platform. But, according to the rules declared by it, the coin is not considered finance or a means of their production, and the corporation itself does not assume the right to transfer tokens into real money. With these methods, the organization insures itself against regular restrictions. However, there are risks of losing real support.

Still, the prospects for Tether are quite promising due to the possibility of instantly transferring fiat funds to virtual ones for carrying out business activities. The tool is quite comfortable for users due to the absence of speculative issues. Due to these features, the cryptocurrency is in fourth place in the list of the most profitable tokens by December 2019, and its capitalization is $ 4,121,769,242.

Tether can be called a promising cryptocurrency that has a chance to find a worthy use in the near future. Already, many users prefer to keep their finances in USDT due to the absence of sharp volatility in the exchange rate. In any case, this cryptocurrency was the first to do a unique job: it united the world of real money with the digital currency sphere. What happens next can be seen in the near future.