Tether Price (USDT)

Tether (USDT) is a stablecoin issued in 2014 by Tether Limited. It is pegged to the US dollar, making it both a digital currency and a representation of traditional currency. Tether operates on multiple blockchains, with the majority of tokens residing on the Ethereum network.

As a stablecoin, Tether claims that it is backed by physical reserves, which are meant to equal or exceed the amount of Tether in circulation. The reserves include a combination of currency, cash equivalents, and occasionally other assets and receivables from loans made by Tether to third parties. 

The main purpose of Tether is to offer liquidity and stability to crypto traders and investors. By using USDT, users can easily enter and exit positions in other cryptocurrencies without being exposed to the unpredictable price fluctuations of the crypto market. 

Tether Price History 

2015

Tether (USDT) briefly rose to what would become its highest price paid of all time at $1.20 in February, soon after it was listed.

It maintained a stable value of $1 with no fluctuations observed throughout the rest of the year, except when it briefly fell to what would be its lowest price paid of all time at $0.5683.

2016

In 2016, Tether (USDT) only experienced one drop in value on August 11, when it briefly fell to $0.97. However, for the rest of the year, Tether's price remained unchanged at almost $1.

2017

In 2017, the USDT price witnessed significant fluctuations. In April, the price of USDT dropped to $0.92. This is because Tether was accused of releasing more USDT than it had in its reserves, influencing Bitcoin prices. By December 2017, Tether reached its all-time high of $1.081, marking a significant increase in value.

2018

In 2018, USDT exhibited a mixed pattern with occasional deviations from the $1 mark. There were periods when the price of Tether exceeded $1, and there were also instances when the price dipped slightly below $1. By December 2018, Tether was trading at $1.022, reflecting a slight increase in value compared to its initial peg.

2019

In 2019, Tether (USDT) displayed intermittent price volatility around the $1 mark. 

2020

In 2020, Tether (USDT) maintained a relatively stable price near $1, with no significant fluctuations throughout the year.

2021

In 2021, the USDT price stayed relatively the same as in 2020, with no huge changes.

2022-23

In 2022 and 2023, Tether (USDT) exhibited a consistent price history, maintaining a stable value of $1.

How does Tether work? 

Tether aims to maintain a one-to-one ratio with the US dollar, held in reserves by Tether Limited. It operates through a multi-layered technology stack.

Tether does not have its own blockchain. Instead, it operates on different popular blockchains like Bitcoin and Ethereum using the Omni Layer protocol, which embeds the transactional ledger as metadata. 

The Omni Layer enables the creation and tracking of fiat-pegged crypto assets, such as USDT (Tether) within the blockchain. Users can transact and store these tokens in a secure environment, using features like P2P transfers and an encrypted web wallet.

Tether Limited is the custodian and issuer of Tether stablecoins. The company accepts fiat deposits from users, and for each deposit made an equivalent amount of tether tokens is issued. Users can then freely transact with these USDT.

When users want to redeem their Tether (USDT) for fiat currency, they can deposit USDT back with Tether Limited, which will destroy them and send the corresponding fiat currency to the user's bank account. Tether Limited is responsible for maintaining the custody of the fiat reserves backing the USDT coins and publicly reporting proof of reserves and audit results.

The main concept behind Tether is to ensure the solvency of the system. Each Tether (USDT) in circulation represents an equivalent amount of fiat currency held in reserves. The provability of the USDT is achieved through transparency just like the Bitcoin blockchain, where the transaction history of each Tether token can be audited. 

Tether Limited publishes its bank balance and undergoes regular audits by professionals to prove the existence of the fiat reserves.

Who are the founders of Tether?

The founders of Tether (USDT) are Brock Pierce, Craig Sellars, and Reeve Collins. They created Tether in July 2014, with the original name The three founders were Bitcoin enthusiasts and early adopters who sought to enable the digital use of fiat currencies.

What is USDT (Tether) used for?

Individuals can hold USDT as a way to protect their funds from market volatility. USDT also provides a means to easily convert cryptocurrencies into a familiar unit of account (fiat currency) without relying on traditional banking systems.

Merchants can benefit from accepting USDT as a payment method, as it enables them to tap into the growing number of users with USDT holdings. By integrating USDT payments, merchants can expand their customer base and facilitate faster, more secure, and low-cost transactions on a global scale.

Exchanges can use USDT to accept and facilitate crypto-fiat deposits and withdrawals, eliminating the complexities, risks, and expenses associated with legacy financial systems. By outsourcing fiat custodial risk to Tether Limited, exchanges can focus on managing cryptocurrencies and offer additional trading pairs with other fiat currencies.

What makes Tether unique?

Tether utilizes a multi-sig model where multiple private authorization keys are held by different individuals or entities. 

When new coins are created, these private keys must collectively sign and broadcast this on the specific blockchain. This means that no single person or entity has complete control over the issuance process.

By requiring multiple signatures, Tether mitigates the risk of unauthorized or fraudulent token creation. It adds an extra layer of security and reduces the likelihood of a single individual compromising the system. 

The involvement of multiple parties helps distribute trust and accountability, making it more difficult for any one party to manipulate the token issuance process.

How can I mine or stake USDT?

Unlike other cryptocurrencies such as Bitcoin and Ethereum, Tether does not follow a consensus model that involves mining or staking. Tether (USDT) is a stablecoin that aims to maintain a 1:1 peg with the US dollar, meaning that each USDT token should be backed by an equivalent amount of USD reserves.

Tether operates based on a consensus model known as the Tether Proof of Reserves (PoR) model. The Tether PoR model relies on a centralized approach, where the Tether company (or its affiliated entities) holds the reserves that back the USDT tokens.