Tether is a fiat-collateralized stablecoin, a form of stable-valued cryptocurrency which pegs itself against traditional fiat currencies’ prices with the goal of using its stable value against the inherent volatility of cryptocurrencies.

By doing so, Tether aims at keeping cryptocurrency valuations stable and enhancing compatibility between government monies and newer crypto assets.

It was crafted while focusing on building the bridge between fiat and crypto currencies and give its users stability as it maintains a 1-to-1 ratio with the USD in terms of value.

Tether supports four stablecoins:

1. The U.S. dollar (USDT)

2. The Chinese Yuan (CNHT)

3. The Euro (EURT)

4. And XAUT, a stablecoin which is backed by 1 oz. of gold

Every USDT token can be redeemable for a US Dollar, given that the US Dollar is held under Tether Limited’s custody, which, in turn, makes Tether’s total value to be equal to the company’s reserves.

Tether Explained

Tether is responsible for minting and destroying its tokens as they must administer their reserves according to what they have in custody.

It was originally issued through Bitcoin’s blockchain protocol “Omni Layer”.

Omni also stores Tether’s ledger is on Bitcoin’s blockchain. Users can also use the Omni Explorer in order to view verified transactions.

Tether has since expanded onto other blockchains such as Ethereum (ETH), EOSIO (EOS), Algorand (ALGO), and Tron (TRX).

The History Behind Tether

In 2010, two groups (Realcoin and Bitfinex) began independently working on projects with the idea that fiat currencies could be issued through the Bitcoin blockchain. Later, the two projects merged and founded what is now known as Tether Limited.