Crypto from Scratch: What Bitcoin Is, What Tether Is, and Why Tether Became Iran's Digital Dollar

What you will learn in this lesson

You have probably heard the names Bitcoin and Tether a lot, and maybe seen someone say "I moved my money into Tether" or "Bitcoin jumped and crashed overnight." This lesson explains both names from scratch. First we describe, in plain language, the technology behind cryptocurrencies, the blockchain. Then we see how Bitcoin is a scarce but volatile money, and how Tether, by contrast, is built to be non-volatile. Next we explain why in Iran it is specifically Tether that has become the digital dollar, and finally we list the base risks. No prior knowledge is required, and we define every term where it first appears.

Definitions

Cryptocurrency is digital money that is recorded and transferred over a computer network and, unlike the toman or the dollar, is not printed or controlled by any central bank or government.

Blockchain (literally, "a chain of blocks") is a shared ledger: a list of all transactions that is kept not by a single bank but simultaneously on thousands of computers around the world. It is precisely this "shared" quality that makes it resistant to tampering.

Bitcoin is the first and best-known cryptocurrency, launched in January 2009 by a person or group using the pseudonym "Satoshi Nakamoto." Their real identity is still unknown.

Stablecoin is a cryptocurrency whose price is deliberately tied ("pegged") to a stable asset such as the US dollar so that, unlike Bitcoin, it does not swing up and down.

Tether (USDT) is the world's largest dollar stablecoin; each unit is meant to always be worth about one dollar.

A crypto exchange is a platform that buys and sells cryptocurrency, and a wallet is the software or hardware place where you keep your crypto.

How a blockchain works

The mechanism of a blockchain can be seen in a few simple steps:

1. Recording a transaction. When someone sends crypto, that transaction is written into a "block" (a bundle of several transactions).
2. Chaining the blocks. Each new block is locked onto the previous one, forming a continuous chain; so changing one old transaction would mean having to change every later link too, which is practically impossible.
3. Shared storage. A copy of this ledger exists on thousands of volunteer computers worldwide. To forge it, you would have to deceive a majority of the network at once, which is extremely costly and difficult.
4. No middleman needed. The network itself verifies the transaction, so unlike a bank transfer there is no intermediary bank in the middle.

The result is a public financial ledger, with no central owner, that everyone can see but no single party can tamper with.

Bitcoin: scarce and volatile money

Bitcoin's most important feature is programmed scarcity. It is locked into the software code that there will never be more than 21 million bitcoins. New bitcoins come into being through "mining": computers solve computational problems to verify transactions and secure the network, and in return receive new bitcoin. Roughly every four years this reward is cut in half (an event called the "halving") so that the pace of new supply slows and gradually approaches that 21 million ceiling.

But this same asset, unlike Tether, is highly volatile. Its price is formed purely by supply, demand, and market expectations, and can rise or fall by tens of percent in a short span. For example, per Sahmino data, one bitcoin traded at about $62,688 on Tuesday, 23 Tir 1405 (14 July 2026); this number is a live figure and changes constantly. You can see the day's price on the Bitcoin price page.

Tether: a dollar that moves on the blockchain

Tether was built precisely to solve that volatility problem. The idea of a stablecoin is this: create a cryptocurrency whose price is pegged to the dollar, so a user can hold and move a dollar-equivalent value on the blockchain without the hassle of physical cash. Tether's issuing company (Tether) states that for every unit of Tether it holds about one dollar of backing (mostly US Treasuries and cash equivalents).

The peg mechanism is simple: when a verified client wires in dollars, new Tether is "minted"; when they hand Tether back, they receive dollars and that Tether is "burned." This one-to-one cycle, together with traders buying and selling in the market, keeps each Tether close to one dollar. Tether is today the world's largest stablecoin and, in 2026, holds roughly two-thirds of the entire stablecoin market.

A worked example

First a fully hypothetical example to grasp the difference, then dated real figures.

Hypothetical example. Suppose you have 10 million tomans and you are worried the toman will lose value. If you convert it to Tether, your holding is effectively locked to the dollar: the number of Tether you hold stays fixed, and if the toman weakens, the toman value of those same Tether rises. Now suppose instead you had bought Bitcoin with that 10 million; you might have gained 20 percent in a week, but you could just as easily have lost 20 percent. This is the essential difference between a stablecoin and a volatile cryptocurrency. (The figures in this paragraph are hypothetical and are given only to illustrate the concept.)

Real figures. On Tuesday, 23 Tir 1405 (14 July 2026), per Sahmino data, each Tether traded at about 183,000 tomans and its dollar value was near one dollar; that is, the same 10 million tomans in the example above was roughly equal to 54 Tether. The Tether-toman rate has in practice become one of the market's daily reference points for the dollar rate, and you can see its current value on the Tether-to-toman price page.

In Iran's market: why Tether became the digital dollar

In Iran, Tether has become less an "investment" than a "tool for holding dollars." There are several clear reasons:

• Hard access to dollars and foreign accounts. Because of sanctions, opening a dollar account at foreign banks and moving dollars is difficult for most Iranians; Tether is an accessible substitute that carries the same dollar value.
• Ease of holding and transfer. Tether is held and moved on a phone, around the clock, with no need for a foreign bank account: no cash to hide, no branch to visit.
• The dollar peg. Because Tether's price is tied to the dollar, holding it works effectively like holding dollars and keeps the user away from the severe swings of cryptocurrencies like Bitcoin.
• Easy trading against the toman. On domestic crypto exchanges, Tether is easily bought and sold for tomans; this has made the Tether-toman rate one of the market's readily available gauges for "the dollar." In the previous lesson we saw why the dollar has several rates in Iran; Tether is in practice tied to one of those accessible free-market rates.
• Legal and regulatory caution. The central bank and lawmakers view crypto cautiously: using cryptocurrency for domestic payments is restricted, and the regulatory framework is still forming and shifting. So Tether is "convenient," but it is not rule-free or risk-free.

Common mistakes

Mistake one, "Bitcoin and Tether are more or less the same." No; the two are fundamentally different. Bitcoin is scarce and volatile and its value can swing sharply, whereas Tether is deliberately pegged to the dollar to stay low-volatility.

Mistake two, "Since Tether is tied to the dollar, it carries no risk." Tether has backing and issuer risk: if the issuing company cannot keep enough backing, or market trust in it is shaken, the price peg can temporarily break. There is no deposit-insurance body standing behind it.

Mistake three, "Crypto is fully anonymous and 100 percent safe." Transactions are recorded on a public blockchain and are traceable, so it is not fully anonymous; moreover the risks of fraud, exchange hacks, and losing your wallet key are real. (Safely storing crypto is the subject of a separate lesson.)

Mistake four, "The price has gone up, so it will surely keep going up." Crypto volatility runs both ways; past gains are no guarantee for the future. This lesson gives no advice on whether to buy, and only explains the mechanism.

Summary

A blockchain is a shared ledger with no central owner, on which cryptocurrencies move. Bitcoin is the first cryptocurrency, with a 21 million supply ceiling and a volatile price. Tether, by contrast, is a dollar-pegged stablecoin built to stay non-volatile, and in Iran, because of the difficulty of accessing dollars and its ease of holding, it has taken on the role of a "digital dollar." But "convenient" does not mean "risk-free": backing risk, regulatory risk, and the danger of fraud all remain. In the previous lesson we read why the dollar has several rates in Iran; and to review the other basic lessons, visit the Sahmino Academy page.