Crypto Academy Week 6 Task by @Yohan2on: A Close Look at Tether (USDT)

When I first ventured into cryptocurrency in late 2017, Tether (USDT) was among the first few cryptocurrencies I heard of. There was something very funny I saw about it then; someone posted that he had invested in Tether (USDT) for many months but he wasn't making profits. He noted that he still saw the same dollar value, no increase and no big decrease as well. It was very funny reading the post and the accompanying comments. You know, ignorance is bad; you don't invest in a stable coin because it is more like a store of value.

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Just as the name implies, a stable coin is a coin that has price stability. It doesn't have high price fluctuations or price volatility unlike the conventional cryptocurrency assets that are usually very volatile. Stable coins come in handy when you want to avoid fiat inflations so, you just convert your fiat (like NGN) to a stable coin like USDT. Should Naira devalue, you are safe. Stable coins thus act as a store of value and not where to invest like in the scenario I aforementioned. There are a lot of stable coins and Tether is one of them.

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Tether was the very first stable coin created and it is being distributed by a company called Tether Limited. Tether has the ticker USDT with its logo taking the form of letter T. One major characteristic of cryptocurrency is price volatility. While crypto's price volatility could be capitalized upon to make gains, this characteristic makes cryptocurrency to not be seen as a store of value by the Fiat advocates.

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It is for this reason that Tether (USDT) was being created. Tether saves as a store of value because it's price is always stable that is, it is pegged to fiat currencies like USD, EURO etc. This further implies that 1 USDT = 1 USD and also equal to 1 EURO etc. Thus, Tether is often used as a gateway into cryptocurrency exchanges because it gives you the same value when you convert your fiat. So, a lot of persons deposit funds and first converts it to Tether and from there you can buy other cryptos it is being paired with.

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Tether is a token backed by actual assets, including USD and Euros. One Tether equals one underlying unit of the currency backing it, e.g., the U.S. Dollar, and is backed 100% by actual assets in the Tether platform’s reserve account. Being anchored or “tethered” to real world currency, Tether provides protection from the volatility of cryptocurrencies. source

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Tether enables businesses – including exchanges, wallets, payment processors, financial services and ATMs – to easily use fiat-backed tokens on blockchains. By leveraging Blockchain technology, Tether allows you to store, send and receive digital tokens person-to-person, globally, instantly, and securely for a fraction of the cost of alternatives.
Tether’s platform is built to be fully transparent at all times. [source](source

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History and Tokenomics of Tether

Tether (USDT) was first launched in 2014 as RealCoin by the same team running the Bitfinex exchange. Later in November, Realcoin was rebranded to what we now call Tether (USDT)
by Tether Limited and it starting trading in November 2015. Tether Limited is the company responsible for the distribution of the stable coin and it is headed by JL Van Der Velde. ref

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More so, Tether is the largest stable coin in circulation having a circulating supply of a whooping $39, 000,000,000 coins with a maximum supply of $39.2 billion coins. It equally has a market capitalization of well over $39 billion dollars; no other stable coin comes close to these figures.

Tether (USDT) is a very popular cryptocurrency because it is the major source of liquidity in the cryptocurrency markets. Also, it has contributed greatly to the mass adoption of cryptocurrency. USDT is being listed and trading on almost all Crypto exchanges with Bitfinex leading in terms of trading volume. I don't think there's any exchange that has not listed USDT yet because most coins are being paired with USDT and BTC. Furthermore, it is being used for futures trading so that a trader's profits from futures doesn't face fluctuations. Tether is one hundred percent backed and its distribution is very transparent being that it is built on blockchain technology.

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@yohan2on