Descrption：Tether is a token backed by actual fiat currency assets, including USD, Euros and, soon, Japanese Yen. One Tether equals one underlying unit of the currency backing it, e.g., the U.S. Dollar, and is backed 100% by actual assets in the Tether platform’s reserve account. Being anchored or “tethered” to real world currency, Tether provides protection from the volatility of cryptocurrencies.
Fiat currencies on the Bitcoin blockchain
v1
Principle and design goals
There exists a vast array of assets in the world which people freely choose as a store-of-value, a transactional medium, or an investment. We believe the Bitcoin blockchain is a better technology for transacting, storing, and accounting for these assets. Most estimates measure global wealth around 250 trillion dollars with much of that being held by banks or similar financial institutions. The migration of these assets onto the Bitcoin blockchain represents a proportionally large opportunity.
Bitcoin was created as “an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”. Bitcoin created a new class of digital currency, a decentralized digital currency or cryptocurrency.
Some of the primary advantages of cryptocurrencies are: low transaction costs, international borderless transferability and convertibility, trustless ownership and exchange, pseudo-anonymity, real-time transparency, and immunity from legacy banking system problems. Common explanations for the current limited mainstream use of cryptocurrencies include: volatile price swings, inadequate massmarket understanding of the technology, and insufficient ease-of-use for non-technical users.
The idea for assetpegged cryptocurrencies was initially popularized in the Bitcoin community by the 2 Mastercoin white paper authored by J.R. Willett in January 2012. Today, we’re starting to see these ideas built with the likes of BitAssets, Ripple, Omni, Nxt, NuShares/Bits, and others. One should note that all Bitcoin exchanges and wallets (like Coinbase, Bitfinex, and Coinapult) which allow you to hold value as a fiat currency already provide a similar service in that users can avoid the volatility (or other traits) of a particular cryptocurrency by selling them for fiat currency, gold, or another asset. Further, almost all types of existing financial institutions, payment providers, etc, which allow you to hold fiat value (or other assets) subsequently provide a similar service. In this white paper we focus on applications wherein the fiat value is stored and transmitted with software that is opensource, cryptographically secure, and uses distributed ledger technology, i.e. a true cryptocurrency.
Technology implementation
Consensus mechanism
Accounts and transactions
Smart contract system
Cryptography
Distributed storage protocol
Cross-chain and exchange technology
For Exchanges Exchange operators understand that accepting fiat deposits and withdrawals using legacy financial systems can be complicated, risky, slow, and expensive.
Some of these issues include:
● Identifying the right payment providers for your exchange
○ irreversible transactions, fraud protection, lowest fees, etc
● Integrating the platform with banks who have no APIs
● Liaising with these banks to coordinate compliance, security, and to build trust
● Prohibitive costs for small value transfers
● 37 days for international wire transfers to clear
● Poor and unfavorable currency conversion fees By offering tethers, an exchange can relieve themselves of the above complications and gain additional benefits, such as:
● Accept cryptofiats as deposit/withdrawal/storage method rather than using a legacy bank or payment provider
○ Allows users to move fiat in and out of exchange more freely, quickly, cheaply
● Outsource fiat custodial risk to Tether Limited just manage cryptos
● Easily add other tethered fiat currencies as trading pairs to the platform
● Secure customer assets purely through accepted cryptoprocesses
○ Multisignature security, cold and hot wallets, HD wallets, etc
○ Conduct audits easier and more securely in a purely crypto environment
● Anything one can do with Bitcoin as an exchange can be done with tethers
Exchange users know how risky it can be to hold fiat currencies on an exchange. With the growing number of insolvency events it can be quite dangerous. As mentioned previously, we believe that using tethers exposes exchange users to less counterparty risk than continually holding fiat on exchanges. Additionally, there are other benefits to holding tethers, explained in the next section.
Special technology
Economic model and incentive
Governance mechanism
Applications
Main Applications In this section we’ll summarize and discuss the main applications of tethers across the Bitcoin/blockchain ecosystem and for other consumers globally. We break up the beneficiaries into three user groups: Exchanges, Individuals, and Merchants.
The main benefits, applicable to all groups:
● Properties of Bitcoin bestowed upon other asset classes
● Less volatile, familiar unit of account
● World’s assets migrate to the Bitcoin blockchain
Contributors
No contributors information for the version. to see perfessional version!
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| Rank | Blochchain | Similarity |
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1st
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EDO
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21.5164533333333% |
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2st
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RDD
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19.040486666666702% |
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3st
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BTM
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16.9272966666667% |
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4st
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WAVES
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14.491935% |
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5st
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MCO
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13.4647983333333% |
No analysis results for the version. to see perfessional version!
| Rank | Blochchain | Similarity |
|---|---|---|
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1st
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BIX
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2.9000000000000004% |
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2st
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ETN
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2.1999999999999997% |
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3st
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PPT
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1.5% |
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4st
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LRC
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1% |
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5st
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MIOTA
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0.5% |
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