Tether (USDT) is what’s known as “Stablecoin”, a cryptocurrency created by Tether Limited to provide a stable price point at all times. This USDT cryptocurrency is designed to be pegged against the US Dollar at a 1:1 ratio. Each token is worth $1.00 USD and backed by $1.00 USD in physical reserves. Stablecoins are useful for people who want to hold a digital currency that will maintain a consistent value and is backed by an asset, however despite being popular for this, Tether also has a controversial history due to the company’s alleged role in manipulating Bitcoin’s price and poor management of their reserves.
Tether’s history goes back to 2014, when Brock Pierce, Craig Sellars, and Reeve Collin first founded it and launched it as “Realcoin” (it was later rebranded to “tether”). It was one of the earliest stablecoin created and allowed users to create and trade smart-contract-based properties and currencies on Bitcoin’s blockchain. Due to the major issues surrounding cryptocurrencies—high volatility and convertibility concerns between fiat currencies and cryptocurrencies—Tether was designed to be a solution because it is fully backed 1:1 by deposits of US dollars held at banks.
Tether is grouped under a subset of digital assets called stablecoins, it just means that their prices are anchored to a less-volatile asset. Each USDT issued is backed by one US dollar worth of assets, which includes traditional currency and cash equivalents, and may include other assets and receivables from loans. Once a tether (a single unit of USDT) has been issued, it can be used similarly as any other currency or token on the chain that it has been issued on. Tether was initially created to use the Bitcoin network as its transport protocol to allow transactions of tokenized traditional currency. Since this original version of Tether uses the Bitcoin blockchain, it inherits the inherent stability and security of the longest established blockchain network. Users can transact with USDT on and across some of the major blockchain platforms such as Ethereuem, Tron, Solano and more. While USDT themselves operate in a decentralised network, these tokens are not mined and have a central entity—Tether Limited—that issues (mints) and destroys (burns) USDT tokens to adjust the supply of coins to user demand.
There are a number of different ways you can use Tether throughout the cryptocurrency market. Investors can swap fiat currency into Tether and proceed to buy cryptocurrency with Tether. Hence, it’s common to see Tether as part of a trading pair. Do take note that not all cryptocurrency platforms list Tether as they might have their own stablecoin product. Moreover, Tether is a better form of payment as it allows for users to benefit from the crypto’s speedy transaction times and low processing fee without having to deal with high volatility. Tether’s flexibility makes it versatile to be used almost anywhere a user wants to transfer or transact value.
The easiest way for you to buy Tether is by signing up for an account with a cryptocurrency exchange or money changer that offers it. Most cryptocurrency exchanges offer USDT as it’s widely used by traders. Tether is a digital currency so you can hold it on any type of crypto wallet. For trading fees, you could pay anything between 0.1%-0.9%, but there are some platforms that don’t charge any fees for stablecoins.
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