What Is Tether.
Tether is a type of cryptocurrency known as a stablecoin Unlike cryptocurrencies like Bitcoin or Ethereum which are known for their price volatility stablecoins are designed to maintain a stable value by tying themselves to a store of assets Tether specifically is pegged to the value of the United States Dollar (USD) with each USDT token theoretically representing one US dollar.
How does tether work.
Tether achieves its price stability by backing each USDT token with an equivalent amount of traditional currency reserved primarily in the form of USD This reserve is regularly audited to ensure transparency and maintain a 11 peg to the US dollar The process of creating USDT involves depositing USD into a bank account controlled by the company behind Tether which then mints an equivalent amount of USDT tokens When users want to redeem their USDT for USD they can do so through a trusted exchange.
Tether works on multiple blockchain networks including Ethereum (as an ERC-20 token) TRON and others allowing users to seamlessly transact USDT across different platforms and ecosystems This flexibility has made Tether a stablecoin for traders and investors looking for a safe haven during cryptocurrency market volatility.
History of Tether.
Tether (USDT) is a cryptocurrency that was launched in 2014 It is classified as a stablecoin because its value is pegged on a one-to-one basis to reserves of fiat currency primarily US dollars Tether was created to provide the benefits of cryptocurrencies like Bitcoin while maintaining a stable value that is not subject to the extreme price volatility typically associated with other cryptocurrencies.
Here’s a detailed history of Tether including its launch early adoption and major milestones and controversies.
1) Foundation and Launch (2014-2015)
Tether was founded in 2014 by Brock Pierce Reeve Collins and Craig Sellers among others.
The company behind Tether originally known as RealCoin was renamed Tether Limited.
In October 2014 the first Tether token (USDT) was issued on the Bitcoin blockchain using the Omni Layer protocol.
Tether initially aimed to provide a stable and easily transferable digital representation of the US dollar.
2) Early Adoption (2015-2016)
Tether started gaining popularity as a stablecoin option for traders and investors in the cryptocurrency market.
It was used as a means to rapidly move funds in and out of more volatile cryptocurrencies on various cryptocurrency exchanges.
3) Expansion and Controversy (2017-2018)
In 2017 Tether’s market cap began to grow significantly and it became a major stablecoin in the cryptocurrency sector.
Controversy emerged particularly regarding Tether’s claim to have sufficient US dollar reserves to support every USDT in circulation.
Tether Limited faced criticism for not conducting regular audits to prove its reserved holdings.
In December 2017 Tether and its related exchange Bitfinex were banned in the US They were subpoenaed by the Commodity Futures Trading Commission (CFTC) to provide greater transparency regarding their operations and reserves.
4) Market Dominance and Legal Scrutiny (2019-2020)
Despite ongoing controversies Tether continues to dominate the stablecoin market with billions of USDT in circulation.
In February 2019 Tether revealed in a court filing that its reserves could be backed not only by cash but also by loans to affiliated companies.
In April 2019 the New York Attorney General’s Office alleged that Bitfinex a major user of Tether used Tether reserves to cover $850 million of losses.
Tether Ltd and Bitfinex reached a settlement with the NY Attorney General’s Office in early 2021 agreeing to pay a fine of $185 million and provide regular reports on their reserves.
5) Continued growth and multiple blockchains (2020-present)
Tether has expanded beyond the Bitcoin blockchain and is now available on various blockchains including Ethereum (as an ERC-20 token) Tron and others.
Its total supply continued to grow and reached tens of billions of USDT in circulation.
Tether remains one of the most widely used stable coins for trading and value transfer in the cryptocurrency market.
How to buy Tether (USDT)
Buying Tether (USDT) involves several steps including choosing a cryptocurrency exchange creating an account verifying your identity depositing funds and finally purchasing USDT Here’s a step-by-step guide on how to do it.
Step 1) Choose a Cryptocurrency Exchange
Choose a reputable cryptocurrency exchange that supports Tether (USDT) Some popular exchanges that commonly offer USDT trading include Binance Coinbase Kraken Bitfinex and Huobi Make sure the exchange is available in your country and offers the required trading pairs (eg BTC/USDT ETH/USDT)
Step 2) Sign up and verify your account
Visit the website of the chosen exchange and sign up for an account You’ll usually have to provide your email address create a password and agree to their terms of service After registering you may need to verify your identity in accordance with the exchange’s Know Your Customer (KYC) procedures which usually involves providing identification documents such as a passport or driver’s license.
Step 3) Enable Two-Factor Authentication (2FA)
For added security enable two-factor authentication (2FA) on your Exchange account This requires you to enter a verification code from your mobile device every time you log in.
Step 4) Deposit Funds
Before you can buy USDT you will need to fund your exchange account Most exchanges allow deposits in fiat currencies like USD EUR or other cryptocurrencies like Bitcoin (BTC) or Ethereum (ETH) Depending on your preferred payment method you can deposit funds via bank transfer credit/debit card or cryptocurrency transfer.
Step 5) Place an order to buy Tether (USDT)
Once your funds have been deposited and confirmed you can proceed to buy Tether.
a) Find a trading pair Go to the trading section of the exchange and find the trading pair you want to use For example if you’re using Bitcoin to buy Tether check out the BTC/USDT trading pair.
b) Place Order Choose whether you want to place a market order (buy USDT at the current market price) or a limit order (specify the price at which you want to buy USDT) Market orders are usually faster but their fees may be slightly higher.
c) Enter the amount Specify the amount of USDT you want to purchase or the amount of base currency (for example BTC) you want to spend Make sure you have enough funds in your account.
d) Review and Confirm Double check your order details including amount and price Click “Buy” or “Order” to confirm your purchase.
Step 6) Store your USDT securely
Once your purchase is complete your USDT will be available in your exchange wallet For added security consider transferring your USDT to a private wallet Hardware wallets or software wallets like Trust Wallet or Exodus are good options for storing USDT securely.
Please note that cryptocurrency investments involve risk and prices can be highly volatile It is essential to do thorough research and consider your risk tolerance before investing in Tether or any other cryptocurrency Additionally always use secure practices when dealing with cryptocurrencies such as enabling 2FA and storing your assets in a secure wallet.
