Google the word “Tether,” and you are sure to learn more about the controversy that has plagued this cryptocurrency since its release. There are quite a few claims made by the people behind the network itself as well as those who are unsure of the statements made by the developers of Tether. Regardless of which side you take or what you think about the cryptocurrency, here is a short guide that will give you more information about Tether, its origins, and its current status.
Tether is a different cryptocurrency that was announced in November of 2014 and released at the beginning of 2015. Previously called “Realcoin” during its development by another startup in 2014, Tether is what’s known to the cryptocurrency world as a stablecoin, which means that it is backed by real assets such as gold or currencies.
Besides these small details, there is not much regarding the history of Tether. Most information that is available about this cryptocurrency concerns the controversy surrounding it and the possibility that the developers and other major companies may be providing false information regarding the cryptocurrency itself or taking part in activities that could be considered illegal. Although we do not support or endorse any of these statements, here are some of the claims that have been made by others about the Tether cryptocurrency.
1. Several claim that the US dollar does not back Tether
On the Tether website, the developers state that the cryptocurrency is backed by fiat currency. This means that for every Tether you own (USDT), you are also in possession of one United States Dollar. Although the website makes this claim, the majority of those who have looked into the cryptocurrency have an issue with the fact that there is no way to prove it and that the developers themselves have not provided users with substantial evidence that this statement is true. Although a law firm made a report trying to alleviate these rumors, they still did not provide conclusive evidence and stated that an audit would be hard to obtain. Some state that this report provided even further evidence that the developers of Tether are not backing their coins. More about this report can be found here.
2. A claim was made by an academic paper that an associated company was manipulating the market
Statements made by academics at the University of Texas accused Bitfinex, which is a sister company of Tether, of purchasing Bitcoin using Tether to bring up the demand of Bitcoin when demand was low. These allegations have not proven either way, but the paper has stated that the price patterns seen in Bitcoin were consistent with the supply-based hypothesis. Also, there have also been rumors floating around about someone making large orders that don’t go through to manipulate prices as well as wash orders being made to affect the current demand of Bitcoin as well. However, these actions were that of one person rather than an accused company.
In spite of the rumors and allegations that have been following the Tether cryptocurrency around for the past year, there is not much concerning developments with the cryptocurrency itself, and there is very little that the company has reported with moving forward with the coin. Tether is a cryptocurrency that is already somewhat developed and needs no room for growth due to its backing by fiat currencies rather than a price caused by the speculation of users and the market.
That being said, one of the most recent Tether news pieces that are receiving attention involves a freeze in Tether transactions that occurred on September 17th. Tether does not use their node and instead relies on the Omni protocol for their hosted node services. Those who were not running their node and instead using the Omni platform’s services much like the company were unable to see transactions through when the Omni platform began acting up. The result of these stalled transactions was a dip in the market which soon recovered shortly after the issue was fixed.
Another major news story that has been attracting attention to Tether is Digifinex’s choice to replace Tether with another stablecoin. The stablecoin that will be taking the place of Tether is known as TrueUSD, a cryptocurrency that primarily serves the same purpose as Tether. The reasons behind this sudden swapping out of cryptocurrencies at the exchange is due to the controversy that has been following the Tether team and its related companies. As a result of this change, it has also brought up the question of whether or not Tether will be able to stand its ground as more and more stablecoin cryptocurrencies emerge on the market as competition.
Strip away the controversy surrounding the coin and Tether is merely a stablecoin cryptocurrency that is backed by a fiat currency rather than having a price that is controlled by market speculation. Overall, Tether is one of the more safe investments due to its fiat backing and its lack of volatility. However, make sure to carefully research this cryptocurrency before you put your money into it and only purchase as much Tether as you need at a time as it is still a cryptocurrency.
Source: bitcoinist - 1 day ago
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