What is Tether ?
Tether (USDT) is a useful crypto whose value roughly mirrors the value of the U.S. dollar. The idea was to create a stable cryptocurrency that could be used like digital fiat.
Essentially, and according to their site, Tether converts cash into digital currency, to anchor or “tether” the value of the coin to the price of national currencies like the US dollar, the Euro, and the Yen.
Like other cryptos it uses blockchain. Unlike other cryptos, it is [according to the official Tether site] “100% backed by USD” (USD is held in reserve).
With USDT you can, in theory, move into a coin that holds a stable value like USD… even when you are on an exchange that doesn’t deal in fiat! That is a big deal on its own, but it gets even better. Many exchanges also offer USDT as a trading pair, thus allowing you to buy coins with a coin that mirrors USD. That is very useful.
All those pros aside however, there are some real considerations and concerns with Tether that any user must keep in the back of their minds (all based around the concern that actually getting fiat for USDT could pose problems at some point)
Some question exactly how all this is working, questioning if they are creating coins in a way that mirrors fractional reserves, and questioning if every Tether really can be redeemed for USD and other fiat currencies “no matter what.”
Still, at the end of the day, Tether is useful in-practice due to its steady value and ability to be used in trade for many cryptos many of the world’s major exchanges. Concerns and considerations aside, the reality is: Tether has worked rather well so far and that has earned it a place as one of the top 20 coins by market cap as of December 2017.
BOTTOMLINE: The concerns are real, but don’t let that stop you from “going to USDT” when it is the best short term move for you. Tether’s pros, that it is stable like a digital dollar secured by cryptography and not subject to speculation like other cryptos, are real benefits in the Wild Wild World of crypto. In the volatile world of crypto, its nice to have some stability. Thus, Tehter is a noteworthy crypto.