How to Buy Tether | Guide | CryptoVantage 2020

Tether (USDT) is an Ethereum-based cryptocurrency that looks to disrupt the conventional financial system by providing a stable virtual currency. This is referred to as a stablecoin because the value of one USDT aims to represent the value of one USD. Stablecoins like Tether are relatively easy to buy so they provide a good on-ramp to other forms of cryptocurrency. Tether is listed as USDT on all across cryptocurrency markets.

The Benefits PRO's
  • Stable/fixed value of one USD for each USDT
  • No value fluctuations
  • Available on most major exchanges
The Downside CON's
  • Controversy surrounding backing of each token
  • Value will never be greater than one USD per token
  • No guarantee that USDT can be exchanged for equivalent USD

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Tether Overview

Initially Tether claimed that each token was backed by a an actual USD at a 1:1 ratio, but it has since been revealed to much controversy that it is not only USD, but also loans to affiliate companies, combined with USD and other traditional currencies such as the Japanese yen and the Euro, which make up the company’s asset reserves. The company who released Tether, Tether Limited, states that customers have no legal claim, right, or guarantee that their USDT can be exchanged for USD.

Tether has since been released on other blockchain platforms, in a bid to create a stable coin that is interoperable with all major blockchains. Two of those platforms are EOS and Tron, two very large and popular blockchain platforms for a range of activities and applications.

 

Ratings

Price

All-time low: $.90 USD (Oct. 15, 2018)
All-time high: $1.21 USD (May 27, 2017)

Market Cap

All-time high: $107,480,990 (May 27, 2017)
Current: $4,645,531,513

Supply

Current: 4,642,367,414
Total: 4,776,930,644

Network Speed

Rating: Medium
Transactions per second: 30 transactions per second

Disbursement

Rating: Medium
Reason: Tethers disbursement fluctuates, with rising and falling deposits into the tether system. Most tether exists on Ethereum, while other tether sits on the EOS, or TRON blockchains.

Developer Engagement

Rating: Low
Tether: According to FCAS Crypto, the developer engagement of Tether devs is relatively low. Tether does not have an open source GitHub repository for the world to see their development, which is counter to the classic Bitcoin Open Source Transparency ethos.

Liquidity

Rating: High
Reason: Tether is one of the most widely held and traded coins in the world, due to the ability for people to hedge their bets against volatile assets such as Ethereum or Bitcoin. Tether is the goto stable coin because it was essentially the first asset to provide reliable stability in the crypto markets.

History of Tether

The first Tether (USDT) digital tokens were released in late 2014. At the time the CEO announced that the amount of USDT in circulation was 100% backed by its original currency and could be redeemed at any time with no exchange risk. This statement has since been retracted, Tether Limited offers no legal guarantee of customers being able to redeem their tokens for USD. Tether has at no point been able to provide financial verification that they have enough reserves to cover the issued tokens.

In early 2015, Bitfinex became the first exchange to enable trading of USDT on their trading platform. Bitfinex and Tether have a somewhat controversial history, but nothing came of investigations into potential price manipulation between the two. Since then Tether has been listed on almost all other exchanges.

What is Tether?

Tether is meant to work as a stablecoin, meaning its value remains pegged to the USD at a 1:1 ratio. This creates stable value by ending the fluctuations most cryptocurrencies experience.  Tether exists both on the Omni Layer (built on the Bitcoin blockchain), the Ethereum blockchain as well as EOS and Tron.

The purpose of Tether is to be a stable digital currency that can be used across international borders with no worry of your currency being devalued through exchange rates. It can be used in exchange for goods and services wherever it is accepted and always has a value equivalent to one USD. Transaction times are much faster than traditional foreign exchanges and it doesn’t cost to send Tether across borders.

How to Buy Tether

You can purchase Tether on a number of cryptocurrency exchanges. It is easy to purchase Tether with fiat currencies. You can buy USDT on major exchanges through a variety of payment methods including credit cards and bank transfers through your bank account.

Here are some of the exchanges where you can buy USDT after you create an account:

The Advantages

Because USDT essentially provides little to no opportunity for financial gains, some may wonder why anyone would use it. In reality it is a useful alternative to traditional currencies for several reasons.

One of the main advantages of USDT is related to transaction times. Regular USD deposits and withdrawals made through foreign exchanges can take days to process and can be extended due to a host of other factors. In contrast to this, Tether transactions are completed in minutes.

Another advantage of USDT is related to transaction fees. Foreign currency exchanges average fees of $30, and if your currency is not normally supported by the exchange then there is an extra charge on top of that. Tether charges nothing for transactions between Tether wallets.

Finally, USDT is price stable, whereas generally cryptocurrencies are known for their price volatility. This is big advantage because rather than being concerned with the price of Bitcoin or Ethereum, you are simply concerned with the price of the USD. In addition, the perceived lack of risk can be extremely appealing.

The Disadvantages

The main disadvantage related to USDT is due to Tether Limited’s inability to provide proof that each token is backed at a 1:1 ratio with USD. In fact, the company changed the statement on its website to reflect the fact that there is not a USD for every USDT issued, but instead may be backed by assets or receivables from loans made by Tether to third parties.

In addition, at present there are very few exchanges that USDT is directly convertible to USD, and if you wish to go through Tether directly you are required to have a $100K minimum and will be charged considerable fees.

Tether Frequently Asked Questions

About the Author

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Evan Jones

Evan Jones was introduced to cryptocurrency by fellow CryptoVantage contributor Keegan Francis in 2017 and was immediately intrigued by the use cases of many Ethereum-based cryptos. He bought his first hardware wallet shortly thereafter. He has a keen and vested interest in cryptos involving decentralized backend exchanges, payment processing, and power-sharing.