A Brief Overview Of: Tether

What is Tether?

Tether is a “Stable Coin” that was founded in November 2015 by Jan Ludovicus van der Velde. It was originally issued on the Bitcoin network but has since transitioned to the Litecoin blockchain. It currently has a market cap of $2.2 billion placing it at rank 14 on coinmarketcap.com.

Tethers goal is to provide protection from the volatile cryptocurrency market by supplying a coin that is anchored/tethered to the US dollar. In doing so, this enables an easy to access safe-haven for investors to capitalize on gains when they expect a dip in the hugely fluctuating market. Their word on the subject is that each Tether that is created is backed by Tether Limited’s central USD reserve and this therefore means that USDT will always be worth approximately $1.

Although Tether is closely connected to one of the largest cryptocurrency exchanges in the world (Bitfinex), it is unclear as to whether the currency is to be trusted. USDT is being created at an exponential rate recently, and although they claim to be transparent, Tether Limited has refused an audit check and therefore may not have the reserves they claim to have.

What are the benefits of using Tether?

• Convenient when riding the market
• In theory, they should have the USD reserves

What are the disadvantages of using Tether?

• Lack of transparency in regards to the audit fiasco
• Tether tokens are being created at an exponential rate
• If Bitfinex falls, so could Tether

Should you invest in Tether?

This is obviously not a currency you should invest in per say, but I wanted to keep the layout the same as my other overview articles.

In regards to using Tether though, it is tough to say. It’s a bit like playing with fire, you might get away with it for a while but one day you’re going to get burnt.

I would personally risk day-trading in and out of Tether, but I would feel uncomfortable holding it for a longer duration of time. It is just unfortunate that there is no ideal alternative if there is a bear market and you wish to hold your money in something stable without going through an arduous withdrawal process from the exchanges.

If you enjoyed this post, please don’t forget to up-vote, follow and comment! Thank you for taking the time to give it a read and I hope you have a nice day.

DISCLAIMER: This is NOT financial advice. The cryptocurrency market is volatile and you are at risk of losing your money. Only invest what you can afford to lose.

Sapientia Ianua Vitae

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