About Tether (USDT)

Tether (USDT)


Tether is a cryptocurrency based on blockchain technology, whose tokens are traded under the USDT symbol. Tether is a type of cryptocurrencies called "stablecoin". A stablecoin is inherently linked to an equivalent amount of value to fiat currencies, like the dollar, Euro, or the Japanese Yen. This aspect of Tether has made it a popular choice among investors looking for stable crypto coins without any extreme value fluctuations.


As each USDT token corresponds to actual fiat currency, it does not experience frequent swings in its violation and allows for a stable digital currency. There are also several more categories of similar stable cryptocurrencies based on the type of collateral they use.


Tether is aimed at easing the transition from traditional fiat currencies and cryptocurrencies. Thus, it can provide a much better stable, transparent and easier platform for beginner users to get started with cryptocurrency transactions. The USDT tether coin is linked with the USD dollar currency at a 1:1 ratio in valuation. Each Tether coin is worth one United States dollar.


History


Tether was first launched under the name RealCoin in July 2014 and was renamed as Tether towards the later part of the same year. It went live for trading from 2015 on Bitfinex. Bitfinex continues to be the leading exchange for trading USDT.


USDT is issued by the crypto firm Tether Limited, which is incorporated in Hong Kong and is under the governance of the British Virgin Islands.


Team


Tether was envisioned back in 2012, with J R Willett's whitepaper. The paper discussed the possibility of building new currencies on top of the existing Bitcoin protocol. He went ahead and implemented this idea in the cryptocurrency Mastercoin, which was associated with Mastercoin Foundation. This protocol became the technological foundation of the Tether cryptocurrency.


Tether was implemented by Craig Sellars, Brock Pierce, and Reeve Collins. It was initially called Realcoin, but was later renamed to not appear like an altcoin.


Technology


The basic idea with Tether is that whenever a person deposits $1 into Tether's reserves, Tether Limited will issue a new USDT coin. Thus every coin is backed up 100% by actual fiat currency. From March 2019, loads are also included to back USD values.


USDT makes use of the omni blockchain protocol that allows for pegging assets on multiple blockchains. Unlike with many digital assets like Bitcoin, Tether does not have its own unique blockchain, and exists on a wider blockchain ecosystem.


Uses And Applications


The USDT stablecoin, much like other cryptocurrencies, can be used for making digital payments, trading, and in cryptocurrency exchanges. Many websites also accept USDT as a payment method for enabling cross-border selling and buying of goods and services.


Besides the price stability, Tether also offers some advantages, as listed here.




  • High availability

    • It is present in almost every cryptocurrency exchange and is readily available for trading as an alternative to other popular cryptocurrencies.



  • Easy to exchange into USD

    • Tether can be used to redeem actual fiat currencies, and makes it easier to exchange Tether into USD and vice versa



  • Low volatility

    • This digital object is a much safer option compared to Bitcoin and other altcoins, which can have highly fluctuating valuations.



  • Flexible supply

    • Tether's supply can be regularized based on the need, thus helping to maintain stable pricing.





Tether may not provide a probable case for investment as their value is tied to the US dollar. But it is far less risky and offers a viable way to deal with negative interest rates otherwise incurred with traditional banking solutions.


Future Focus


As of Feb 2021, USDT contributed to about 57% of all bitcoin trading. Tether has been a major contributor to liquidity in the cryptocurrency market and has had stable growth over the years. It is actually the most traded cryptocurrency. Tether has had its ups and downs with a hacking incident in 2017, as well as concerns regarding its value is pegged to 100% of the US dollar value. They are also different from other blockchain-based implementations as it is a centralized solution. There are also several concerns regarding transparency, and Tether continues to suffer allegations of price manipulation in the crypto market. Tether Limited is yet to be audited, and that has been a growing concern among researchers and finance experts.


Tether recently settled with the New York Attorney General, after a scandal where it was revealed that Tether may not have been fully backed by fiat currency. While Tether Limited will admit no wrongdoing, they will provide reports as to Tether's reserves composition over the next two years. This data will be a huge insight into the workings of the largest stablecoin.


At times Tether has fallen below a dollar's value but has managed to stay at an overall stable value so far with the help of proper supply management and USDT reserves.


Currently, the value of Tether in circulation amounts to about $19 billion with steady growth in place. It has been the largest and the first successful stablecoin, thus paving the way for many more similar stablecoins to achieve visibility and success.


Tether currently ranks as the fifth most popular and most prominent cryptocurrency with a huge market cap of $36.8 billion [as of 14/04/2021].


Want to know more? Read about The Future Of Stable Coins.


For more information about USDT, visit the official site.


Wallets


There are many great options for storing Tether. Please refer to this article to determine which is best for you. At BitPrime, we highly recommend buying a Trezor or Ledger device for the ultimate security, although good free options include Jaxx Liberty and Exodus.

A wallet is essentially a bank account for your cryptocurrency and the wallet address is like your account number. The sender of the cryptocurrency needs a wallet address so they have somewhere they can send it from their wallet, much like a bank transfer. This wallet is giving you access to the blockchain where you can view your balance, send and receive cryptocurrency.

For information please read our beginners guide to cryptocurrency wallets.

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Storing your coins with Wallets

A wallet is essentially a bank account for your cryptocurrency and the wallet address is like your account number. The sender of the cryptocurrency needs a wallet address so they have somewhere they can send it from their wallet, much like a bank transfer. This wallet is giving you access to the blockchain where you can view your balance, send and receive cryptocurrency.

For information please read our beginners guide to cryptocurrency wallets.

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POLI - internet bankingPOLI is secure and fast. It links directly to your internet banking – login with your normal details and the rest is easy. No extra fees or surcharges. Watch this short video to see how it works.

About Bitcoin

Bitcoin (BTC) is a form of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds. Transactions are stored on a distributed, immutable, online, public ledger known as a blockchain. Bitcoin was the first truly decentralised cryptocurrency which was created by a programmer under the pseudonym Satoshi Nakamoto and was released in 2009. The system is peer-to-peer, verified by network nodes and recorded in a public distributed ledger called the blockchain. Bitcoin can be exchanged for other currencies, products, and services with over 100,000 merchants and vendors accepting bitcoin as payment. Bitcoin can also be held as an investment. There are only a fixed number of Bitcoin will ever be mined (21 million), it’s not controlled by any one government or central bank, and there’s no such thing as quantitative easing or fractional reserve banking. These qualities make Bitcoin excellent as a store of value and a long-term safe-haven asset, similar to gold.

A Bitcoin success story that went viral on social media is Kristoffer Koch from Norway. Koch invested around $27 in Bitcoin in 2009 and then forgot about it for four years. He remembered about his Bitcoin wallet in 2013, which had then grown in value to $886,000.

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