Tether Virtual Assets

 Usually, when you buy stocks, you can buy stocks in Korean won. Likewise, U.S. stocks can be bought in dollars. On the other hand, cryptocurrency can be purchased directly with cryptocurrency as well as won. There is usually a cryptocurrency that can be bought in won, and there is a cryptocurrency that can be purchased in BTC or USDT.

I know BTC is Bitcoin, but you're unfamiliar with USDT. The topic we're going to talk about today is this USDT, Tether. It also serves as a currency on behalf of the won or dollar, so people who trade cryptocurrency often find tethers more familiar than dollars.

Cryptocurrency is traded 24 hours a day, and the degree of volatility, that is, price change, is very large. There are also cryptocurrencies that go up and down several times in one to two hours. Bitcoin, which is relatively less volatile, also fluctuates around 10% a day.

In the case of cryptocurrency, this unpredictable price volatility causes a lot of difficulties in investing. But the tether that I'm going to explain today is a cryptocurrency that's free from price volatility.

Because the tether is pegged to the value of the dollar. To put it simply, a tether must be a dollar. And this intrinsic $1 value is the most powerful weapon that gives Tether stability. Because it eliminates the risk of volatility. So the tether is issued as much as it deposits dollars to preserve this value.

What is peg? It means a stake that fixes something in English, it means a nail, and it serves to fix value from an economic point of view. For example, our country can peg the dollar to 1,000 won.

Tether is a representative stable coin, and refers to a stable cryptocurrency with little change in the price of coins expressed in legal currency. As described above, to keep the price of cryptocurrency constant, it is implemented by holding legal currency or other cryptocurrency as collateral, or adjusting the supply by sophisticated algorithms.

Tedder Has a History of Controversy

Just by listening to the explanation, I think it is a stable coin linked to the dollar, and Tether has been controversial several times in the past. It's about the entity that issued the tether and the amount of issuance. The question began in January 2018, shortly after the Bitcoin bubble was extinguished in 2017, when the issuance of tethers increased exponentially, especially during the crash period.

If the dollar and the tether are pegged, the entity that issued the tether must hold as much as the tether as the deposit. That's how you can exchange it. If you don't have that much deposit, you might not be able to pay when a lot of people ask you to exchange the tether for dollars.

We trust the Bank of Korea, which issued the won, and the Bank of Korea operates thoroughly under the supervision of the country. So there's a promise, a social consensus, that you can trust and use the won.

However, when asked, "Can you trust Tether Limited?" the controversy led to a market shock because the majority of 2018 thought, "No." The danger that if Tether Limited and Bitfinex went bankrupt, our Tether could turn into a "digital piece of paper" was terrifying.

In September 2021, when China's real estate tycoon group "Hengda Group" was on the verge of bankruptcy, CNBC's report that Tether Limited had Hungda's notes sparked controversy once again. After the report, a large number of investors were forced to shudder once again due to a series of plunges with tethers.

In this history of controversy, people still use tethers, but in the middle of their minds, there's a little spark of doubt going on.