A Beginner’s Guide to Tether (USDT)

By Aleksandra Wilson
2 min read July 26, 2021

Tether is a cryptocurrency of stable value, also called stablecoin, that is issued by a company based in Hong Kong and it reflects the price of the USD. The relation between the token with the USD is accomplished by keeping a certain amount of US dollars in the reserves that is the same as the amount in circulation of USDT.

The founders of Theter

USDT was first launched in 2014 as Realcoin, by Brock Pierce, Craig Sellars, and Reeve Collins. Brock Pierce has also been involved in other major projects, he became the director of Bitcoin Foundation and he co-founded Block.one. Craig Sellars has been part of the Omni Foundation for several years, his participation has allowed users to create smart contracts based on properties and currencies. Reeve Collins, who was CEO of Tether for two years, has also co-founded several successful tech-related companies.

stablecoin Tether

What makes Tether stand out?

Tether has a unique feature: the ability to guarantee its value to be attached to the USD. According to its policy, Tether assigns the same amount of US dollars to its reserves every time it issues new USDT tokens, which protects it from the high volatility on the crypto markets.

Circulation

There is no limit to the issuance of USDT and in theory it is limited only by its own policies, but since it is supposed to have a backup in USD, the total amount of tokens depends on the company’s cash reserves. According to the company, as of September last year, the total of tokens in circulation is over 14.4 billion USDT, backed up by $14.6 billion in assets.

stablecoin Tether

Security

Although Tether doesn’t have its own blockchain, it is secured by the hashing algorithms of Bitcoin, Ethereum, Algorand, EOS, Bitcoin Cash, Tron and OMG, since it works as a second layer token that’s on top of those cryptocurrencies blockchains. To learn more about how to invest safely on crypto, click here.

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