If you are interested in cryptocurrencies, you have certainly heard of a token such as Tether (USDT). In this article you will learn more about it, about its history and understand why it was created.
What is Tether?
A Tether is an unregulated crypto token that has been released on a Bitcoin blockchain (prior to going to the litecoin blockchain) via Omni Layer Protocol. The main purpose of its creation was to facilitate transactions with a rate set on the US dollar, in order to circumvent state intervention and regulatory oversight. Each USDT unit is supported by the US dollar in Tether Limited reserves and can be used through the Tether Platform. Any USDT token may be transferred, stored and issued, as may bitcoins or any other crypto. Users can trade and store tethers using any Omni Layer-enabled wallet such as Ambisafe, Holy Transaction or Omni Wallet.
Tether (USDT) history
The tether was created in November 2015. The company is registered in Hong Kong, but has numerous offices in the United States. Tether is closely related to Bitfinex, which is the third largest crypto exchange (by volume) in the world. Tether was initially based on the Blockchain Bitcoin ecosystem, but in June 2017 it moved to the Litecoin Blockchain ecosystem. The project is supported by the main crypto exchanges. Tether Tokens are issued by Tether Limited. Jan Ludovicus van der Velde is the Managing Director.
The most important features of the Tether
USDT and other Tether currencies were created to facilitate the transfer of national currencies, provide users with a stable alternative to bitcoins and provide an alternative to stock and portfolio audits, which are currently unreliable. The USDT provides an alternative to Proof of Solvency methods by introducing a reserve proof process. In the Tether Proof of Reserves system, the amount of USDT in circulation can be easily checked on the Bitcoin blockchain, using the tools available at Omnichest.info. The corresponding total amount of maintained USDT reserves is confirmed by publication of the bank balance.
Read also: Ripple (XRP) - what it is?
What is Tether price?
The Tether is tied to the US dollar, keeping it in reserve and issuing a crypto token for each reserve dollar. The exchange rate is 1 USDT to 1 USD Tether can be kept as a means of exchange and has a fixed settlement unit, the same as traditional paper money. About 31 million USDT tokens were stolen from the Tether in November 2017. In response to the theft, the company suspended trading and announced that it would introduce new software to implement an emergency fork to make all tokens that Tether identified as stolen unworthy. As of December 19, 2017, limited portfolio services were restarted and processing of overdue transactions began.
USDT - what else you should know?
The Tether is not a legal currency or financial instrument. The ownership of this crypto is not the basis for any contractual rights, legal claims or guarantees of losses. Tether Limited is not a bank and has no reserves in the Federal Reserve. Token USDT is not legal tender and is not covered by deposit insurance, so attempts to circumvent traditional governmental and regulatory controls are very frequent. Tether does not operate in countries and locations that do not regulate the crypto. Transactions are highly irregular in terms of financial institution compliance.