Tether is the very first stablecoin that was issued in the United States. Stablecoin means that the currency was designed to peg its value directly to the fiat or another cryptocurrency. Tether is pegged to the American dollar, and it promises lower volatility. Nevertheless, like Bitcoin, Tether is a decentralized currency working on the basis of blockchain technology, namely uses Omni protocol, thus doesn’t rely on any institution like a bank. Tether has its own tokens - USDT - and its price should be equal to the USD.
Tether was released in 2014 as Realcon by Bitcoin investor Brock Pierce. In the past, it served to Bitcoin protocol only. Nevertheless, in the course of time, it has changed, and nowadays, it covers more cryptos among them is Etherum or Solana.
Price
Stablecoins are significant for their value. Tether is pegged to the American dollar thus, the price should be the same. Each Tether that is issued is connected in a one-to-one ratio, meaning that 1 USDT = 1 USD. Nevertheless, in past years some data proved that Tether is not backed only by USD. Along with this, the questions about the amount of Tether arose as the real amount of dollars was not traceable back in 2017.
Nevertheless, the fears were dispelled, and the developers were able to prove they hold enough USD to cover USDT. This also dispelled worries that uncovered Tether increased the price of Bitcoin in the first quarter of 2017.
What is it good for?
The purpose of Tether is to provide a safe and preferable environment for transactions between a cryptocurrency and fiat or a cryptocurrency and a different one. It allows users to transfer money with lower fees, usually within seconds due to its volatility.
Besides USDT, Tether offers three more stablecoins, namely: EURT (pegged to Euro), CNHT (pegged to Chinese Yuan), and XAUT (pegged to one ounce of gold).
Is it a good investment?
Due to its volatility, you should not expect large fluctuations as it applies to Bitcoin because it is pegged to fiat money. Thus, it can be compared to another currency, so if you are interested in converting money from one currency to another, it might be a good option for you. Nevertheless, if you are more interested in more volatile currencies, this might not be a good choice for you.
A tether is a great tool for transferring cryptocurrencies or fiat currencies with low volatility. Thus, if you hold any other currency, Tether is a great option how not to pay fees more than you should. As mentioned above, the problem might occur with the price. Tether doesn’t have to be backed by the real amount. However, the events from 2017 secured regular inspections.
