Introduction to Tether
What problem does Tether solve?
One of the biggest limitations the cryptocurrency technologies battle is the huge price swings in
their valuations which render them slightly impractical for day-to-day trading. Keeping this concern in mind,
a new breed of cryptocurrency known as stablecoins was introduced. Stablecoins are backed by real-world
fiat currencies like the US Dollar or Japanese Yen. Tether (USDT) is a Blockchain cryptocurrency
backed by the US dollar (Blockgeeks, 2018).
Tether was created with the sole intention
of introducing a Blockchain-based cryptocurrency that will be stabilized so that it becomes a recognized
and accepted means of exchange rather than a tool of investment. It is essential to
tackle the problem of wide price swings if we want to see a future where
cryptocurrencies could be used to run day-to-day business transactions. Tether aims to achieve that. Its
fixed-price follows that of the US Dollar, which provides an incentive to the masses to
spend token rather than ‘HODL-ing’ them (Frankenfield, 2019).
99Bitcoins: What are Stablecoins? What is Tether?
What is Tether
What does the cryptocurrency Tether actually do?
Tether is a token issued on the ‘Omni-layer’ in the bitcoin network. The Omni protocol basically provides a platform for new products to be launched on the Bitcoin Blockchain. As a result, every Omni transaction shares the same transaction hash as the Bitcoin transaction which produces it in the first place. There are other stablecoins launched on the Omni Protocol but Tether enjoys a massive share of 90% of Omni’s transactions (Blockgeeks, 2018).
Who is behind Tether
What team is working to make Tether successful?
Tether was initially founded by Brock Pierce, the director of the Bitcoin Foundation, with the
technical assistance of the software engineer Craig Sellers and the entrepreneurial skills of Reeve Collins.
Back then, in July 2014, the project was named Realcoin and its main objective was
to develop a utility token that had a 1:1 parity with some real-world fiat currency
According to a recent development, it has been alleged in the leaked Paradise
Papers, that Tether shares common management employees with the famous crypto-exchange, Bitfinex. Giancarlo Devasini is
as of the time of this article, serving as a director for both companies, while
Phil Potter is a director at Tether and holds the position of Chief Strategy Officer
at Bitfinex. This allegation gave way to some serious suspicions regarding the transparency of Tether
and the working and legitimacy of Bitfinex (John Ian Woong, 2017).
The main representative body behind Tether is the Tether Foundation whose current CEO is JL Van der Velde while Stuart Hoegner serves as the General Counsel for the firm.