Condensing the critics’ critique, Tether is the flute of the pied piper that the pied piper plays as he walks all the children off the cliffs into the choppy waters below to their unknowing doom.
All +/- % changes are for a 24 hour window
Tether is a stablecoin cryptocurrency that offers a platform to store, send and receive local currency. The cryptocurrency platform is hosted on Bitcoin and Ethereum. The native token of Tether is known as the USDT. The cryptocurrency is known as a stablecoin since it was designed to match 1 USDT to 1 US Dollar. The USDT is built on different blockchains like EOS, Algorand, Omni, Liquid Network, and Solana.
The Tether network began with a whitepaper published in 2012 by JR Willet. The whitepaper wanted to build up a new cryptocurrency on the Bitcoin platform. The whitepaper was implemented through the Mastercoin cryptocurrency. The mastercoin protocol became one of the foundations of the Tether cryptocurrency. Brock Pierce, one of the founders of the Mastercoin platform, became the cofounder of Tether. The CTO of the Mastercoin foundation, Craig Sellers, was another one of the Tether founders.
Realcoin, the precursor to Tether, was announced in July of 2014 by Reeve Collins, Brock Pierce, and Craig Sellers. The first tokens produced were issued on the 6th of October 2014 on the Bitcoin Blockchain through the Omni Layer protocol. Realcoin was renamed to Tether in November 2014. They claimed every Tether token was 100% backed by its original currency which included the US dollar,(the US Tether), the Japanese Yen(Yen Tether), and the Euro(the Euro Tether).
Bitcoin originally used Bitcoin’s blockchain to verify and record transactions. Tether moved to Litecoin in June 2017.
## **Biggest Claims to Fame**
Tether can be sent and transferred globally at low fees and at high speeds. Transactions and transfers between traditional banks are very expensive and take a lot of time to process. Some cryptocurrencies like Bitcoin and Ethereum are too high value to use for smaller and daily transactions. These factors make Tether a good alternative for routine transactions.
Tether has high liquidity. It is easy to exchange cryptocurrency for tether. It does not take as long as it would to exchange cryptocurrency for traditional currency. Knowing that the value of cryptocurrency on Tether will cost the same as it would to convert it to traditional currency no matter when the exchange is done and the state of the market at the time provides an extra layer of security for investors and encourages them to use Tether as they would use a traditional bank.
## **Biggest Criticism**
Tether Limited made a claim that no users of Tether are legally or contractually obligated to exchange or redeem one of its cryptocurrencies for the US dollar. This is an issue as any investor or user who put their money into Tether did so due to the fact that it is a stablecoin and the value of the USDT is a dollar. The uncertainty of the value has made people either get rid of their investment or not buy into the cryptocurrency.
Tether was never fully backed by the US dollar as they claimed initially. This was a big selling point at the beginning of its inception and made many people and many companies invest in crypto at the beginning. They were sued for the claim and had to pay off the legal damage fees though they refused to accept the claim.
Research has shown that 80% of Tether was owned by under 400 people. This research has speculated that this has caused them to participate in price manipulation. This is an issue since it can encourage investors to put their money into a market with a high market value that cannot be maintained which can lead to heavy losses on the people or cryptocurrencies just getting involved in the market that has had its price inflated.
The team running Tether is not transparent with the information that they put out. One of the foundations of blockchain and cryptocurrency is transparency which is done by removing traditional banks that tend to hide under privacy laws so they do not have to reveal information on their inner workings or financial state. By hiding information, Tether violates one of the primary foundational principles of cryptocurrency.
Brock Piers is an American entrepreneur. He was one of the principal founders of Tether. He has claimed he did not make any money from the foundation of Tether. He ran for the presidency in the United States as an independent candidate in 2020.
Reeve Collins is one of the co-founders of Tether. Before the formation of Tether, he co-founded Smart Media Technology and worked as the CEO of BLOCKv. He has acted as the CEO of Tether since 2013.
Craig Sellers is a cryptocurrency entrepreneur. He is one of the co-founders of Tether. He has worked in technology and cryptocurrency for several companies including Bitfinex and Unsung. He currently works as the CTO of the Omni foundation.