Tether is a cryptocurrency whose value is pegged to the US dollar.
So 1 USD₮ equals $1?
No. So say, for example, BTC/USD is at 10 000 and you want to trade 2 BTC for USDT: 100 000 * 10 000 = 1 000 000 (1 million USDT) * 1 BTC₮ = 100 000 (100k USDT). This way the price of USDT does not move with an increase or decrease in the price of bitcoin.
There is no catch. This is a fiat currency token. As of Dec 2017, over $2 billion of USDT have been issued. As a new investor, why would you choose to hold USDT versus holding cash in your bank account? In order for this mechanism to work there needs to be trust that the Tether team will honor its commitment. How can you trust that? Before you invest in USDT, there are a few things to consider. We will go through these and other factors in this article.
Don't we already have enough fiat currencies backed by the government without having to create another one? What's wrong with cash?
There is nothing wrong with cash. However, digital currency brings people options they did not previously have. It allows for immediate payment of goods and services as well as easy transfer across borders via internet protocols such as HTTP(S) and SMTP(S).
There are roughly 2 billion USDT now in existence today (as of Dec 2017). As more are issued more are available for trade. One of the benefits of cryptocurrency is that it is programmable money . The Tether website states that "Full coins will be issued when the network reaches block #6,435,000." Tether converts all transaction fees to USDT on its platform which means if more transactions occur then more tokens are required.
According to their site , they provide 3 main things: 1) easy transfer across borders via internet protocols such as HTTP(S) and SMTP(S); 2) stable currency for trading; 3) transparency with storage & auditing behind every token.
The supply was limited to $1 billion
