On Monday Tether and Factom jointly announced a partnership wherein Tether will leverage the Factom technology to enhance their transparency and audit strategy, and the Factom Foundation will use Tether as an important part of its asset allocation strategy.
Tether created a blockchain-enabled platform that converts fiat currency into a fully reserved, 1-to-1 backed digital currency. Tether’s mission is to allow all Bitcoin companies and individuals to transact with real-world currency as if it were bitcoin.
Factom provides a data layer for the blockchain that allows users to secure and timestamp documents and other business processes.
Tether.to’s wallet transparency strategy focuses on eliminating trust through decentralization and cryptography. The Factom technology uses the same cryptography behind Bitcoin to mathematically prove the existence of any data it receives by hashing that data and embedding the resultant traces into the Bitcoin blockchain. This creates a time-stamped record keeping system capable of maintaining a near real-time, unforgeable audit trail of Tether.to’s wallet database.
Factom has selected Tether to be one of its partners on its asset allocation strategy. More details will be announced in the coming weeks, along with a breakdown of the best practices Factom will employ in its software sale. Since 1 tether USD token (USD₮) is always equivalent to $1.00 USD, this shields both the user and Factom from the volatility associated with market price swings and preserves the value contributed by Factoid purchasers.