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An In-depth Look at Tether (USDT)

Tether is among a crop of crypto coins that work to make the cryptocurrency space less volatile. Tether, however, does a lot more. Read on to learn more.

By Steve Mercure

Thumbnail Image for Blog Article An In-depth Look at Tether (USDT)
date_rangeMarch 23, 2020 remove_red_eye 3525
If you have been in the cryptocurrency scene for a while, you may have experienced the coins’ volatility firsthand. The price fluctuations get so intense that industry players thought it prudent to have a group of coins that champion for stability. Such cryptocurrencies are called stablecoins. Tether (USDT) is one of them.

What is Tether?

Tether is a cryptocurrency that is anchored on the Tether blockchain. Its coins in circulation, traded under the symbol USDT, have a value that is pegged on a traditional fiat currency. In the case of Tether, the coins are set on the U.S. dollar. The said amount is kept in a nominated bank account.

The Tether network was launched in July 2014 as RealCoin. It was rebranded later the same year to take the name of the company that is supposedly responsible for keeping the coins’ equivalent in reserve. USDT started trading in early 2015.

Tether’s features explain how it differs from speculative cryptocurrencies such as Bitcoin and Ethereum. Essentially, a stablecoin is a cryptocurrency that is fiat collateralized, in this case with the dollar. However, not all stablecoins are collateralized by fiat.

The cryptocurrency world has cryptocurrency collateralized stablecoins as well as non-collateralized stablecoins. The former use cryptocurrency reserve as the coin’s collateral while the latter are not collateralized but operate as reserve banks do. Just as fiat currencies, stablecoins control the requisite supply of coins depending on the economic situation.

Because of the reason above, stablecoins serve to keep the valuation of cryptocurrencies stable. They, as such, are an appropriate mode of exchange or a form of storing value. Unlike the other cryptocurrencies, stablecoins are not suitable for speculative investment.

Tether is a key source of liquidity in cryptocurrency trades. Data retrieved from CryptoCompare indicate that 80% of all Bitcoin trade deals are conducted in Tether. So, what does this information mean for anonymity buffs? Does the question “can Bitcoin be traced?” bother you and do you wonder how you can use the best Bitcoin mixer to cover your Tether transactions?

Well, stick around, you will soon find out the answers to these questions.

How Tether Works

Tether is affixed on the Omni Platform. Omni Platform/ Layer is a fully decentralized open-source asset platform on the Bitcoin Blockchain. The platform serves the needs of users who desire to create and trade custom digital assets and cryptocurrencies.

As a software layer that rests on the most popular, overly-secure, and most audited blockchain, Omni transactions are simply Bitcoin transactions. They help bring out the next-generation characteristics of the Bitcoin Blockchain.

Omni Core is a heightened Bitcoin Core that comes with not only the features of Bitcoin but also the features of the advanced Omni Layer. Through the Omni Layer, users can create and distribute custom currencies, undertake Blockchain-based crowdfunding, and trade the various compatible cryptocurrencies peer-to-peer.

Features of Tether (USDT)

Tether combines the best of the two worlds; traditional fiat currencies and blockchain technology. To bring the benefits of these two worlds to life, the stablecoin possesses these characteristics.

Stable Currency

It easily converts to digital currency so it can anchor its value to that of national currencies such as the U.S. dollar, the offshore Chinese yuan, or the Euro.

Transparent

The value of the reserves in fiat currency that are deposited in a nominated account is published daily. These values have been shown to match or exceed the corresponding Tether in circulation.

It is 100% Backed

Every Tether coin in circulation is backed by reserves that consist of traditional cash and currency equivalents, receivables from loans that Tether has lent out to third parties. Every Tether coin is pegged 1:1 to the dollar.

Widespread Integration

USDT is the most elaborately integrated digital-to-fiat crypto coin today. You can buy, sell and use it in all major cryptocurrency exchanges.

Secure

Tether’s technology-enabled blockchain gives users access to world-class security while at the same time staying in line with industry regulations and international compliance standards.

Anchored on the Blockchain Technology

The Tether platform is an Omni layer built over an open blockchain. The platform makes the most of the transparency and security the technology delivers.

These features make tether easy to work with to attain whole anonymity. Tumbling Bitcoins in the internet’s Best Bitcoin mixer is easy because of the simple conversion processes.

The Tether Rationale

One key characteristic of the Tether coin is its stability. Considering that the vast majority of interest made from cryptocurrency accrues due to the coins’ volatility, you may be tempted to question the need for Tether. The coin seeks to maintain fixed crypto prices thus eliminating bubbles, bumps, and dumps.

Holding Tether is akin to having your dollars in a somewhat risky account where they accrue 0% interest. So, if holding Tether seems risky and comes with no financial gains? What would be the motivation to buy the coin?

The truth is, Tether is indispensable, especially, to investors and crypto traders who use the coin as a convenient alternative to fiat. This mentioned class of individuals rely on Tether to cut on transaction durations and costs, and to maintain price stability.

Applications of Tether

To understand the applications of Tether, it is prudent to subdivide the applications not according to use cases but rather according to the category of users that it benefits. In this regard, Tether is designed to serve exchanges, individuals, and cryptocurrency merchants.

That, notwithstanding, the network has benefits that cut across the various user categories. These include considerably low volatility accompanied by a familiar unit of accounting, Besides, it offers flawless migration of world’s assets to the Bitcoin Blockchain, and bestows the properties of Bitcoin on to other classes of assets.

For Exchanges

Cryptocurrency exchanges face several challenges associated with accepting fiat transactions. These include complicated legacy financial systems that are risky, expensive, and slow. The hazards that come with relying on such a system include picking the appropriate payment method for the exchange, integrating cryptocurrency exchange platforms with banks that do not have the necessary API, and depending on banks to provide compliance systems, build trust, and enforce security.

High costs, especially, for small value transactions, longer durations (3 – 7 days) for wire transfers, and unfavorable and poor currency conversion environments are other complications that crypto exchanges face when they work with banks.

Working with Tether helps banks to eliminate the issues highlighted here above. In the process, such exchanges derive numerous benefits that include the ability to allow cryptocurrency-fiat as a method of depositing, withdrawing as well as storing value. As compared to a legacy bank, crypto-fiat transactions allow exchanges to move cash freely, quickly and at considerably cheaper rates.

Besides, exchanges get to transfer the role of fiat custodianship and the risks associated with it to Tether Limited. Using Tether also eases the process of listing more tethered fiat currencies.

Through Tether, crypto exchanges can secure assets of customers only through the accepted crypto processes. To effectively carry out this role, Tether has multi-signature security as well as a retinue of all applicable wallets. Moreover, the platform conduct audits easily and securely. Tether makes exchanges versatile; anything you can do with Bitcoin as an exchange is also possible with Tether.

Exchanges that rely on Tether minimize their exposure to counterparty risks associated with holding fiat in the exchanges’ vaults.

For Individuals

Today, Bitcoin users are diverse and range from the average trader trying to make a profit, to the long-term investor who wants to store his Bitcoin anonymously and securely. It could also be a tech-savvy shopper who knows that Bitcoin transactions will help save on credit card fees. To all these people, Tether offers the following advantages:

• Transact in fiat value pseudo-anonymously.
• Keep fiat/USD in cold storage through secure private keys.
• Avoid the risks associated with traditional bank accounts.
• Eliminate the risk of storing crypto in exchanges and instead, move cash easily.
• Enhance the capabilities of applications that employ Bitcoin.

In this regard, Tether provides a host of solutions to an increasingly diverse group of people. From the philosophical users that believe that crypto can curtail the dominance that governments have over their hapless subjects, to individuals seeking convenient ways of remitting payments to associates across the globe.

Using the combo of Tether and tumbling Bitcoins via the best Bitcoin mixer in existence, cryptocurrency enthusiasts can easily transact privately and anonymously.

For Merchants

For merchants, the key concern is building and maintaining the business. However, inexistent global payment solutions that are inexpensive and ubiquitous force entrepreneurs to spend more time than they should, looking for something that works. For this crop of businessmen, Tether offers the following solutions:

• Ability to price goods in USD as opposed to Bitcoin. Doing so eliminates the hazards associated with the ever-swinging rates or purchase windows that come with using Bitcoin.
• Cuts down on the conversion fees associated with changing cryptocurrency to fiat.
• Gives heightened privacy while reducing the cost of transacting. Besides, businesses avoid chargebacks.
• The crypto nature of Tether implies that you can undertake micro-transactions.

Because of the applications and benefits highlighted above, users will find that the Tether network is private and that the USDT is a secure transit currency that eases the movement of cash from the real state to digital cash. It leverages the benefits of blockchain technology to offer secured payments.

It is cheaper and way faster than USD. It also is efficient, especially, for inter-cryptocurrency conversions. Besides, it has a global acceptance since platforms that earlier lacked USD withdrawal options now use Tether. Such platforms open up many novel possibilities and newer markets.

How to Buy and Store Tether

Buying USDT

The easiest method of buying USDT is to get in place of another cryptocurrency. A whole list of USDT/Cryptocurrency pairs is available here. Aside from these pairs, several exchanges such as Kraken, Bitfinex, Exmo, and Coinut list trading pairs for USDT/USD.

Storing USDT

USDT, like any other cryptocurrency, is safer in a wallet that is independent of an exchange. The safe wallets you can use are either hardware or software. Some of these are Ledger, which is compatible with desktop and mobile, and TREZOR.

The software wallets are Coinomi and Exodus. Both wallets are compatible with both, desktop and mobile.

Note: When migrating coins from an exchange to an independent wallet, it is prudent to look for the best Bitcoin mixer. The need to cover your transactions should be your top priority.

The Tether Controversy

Writing a proper Tether guide cannot be complete without dabbling with controversy. The coin and the entity behind it have had their fair share of velitations. In late 2017 and early 2018, several major online publications did stories that highlighted concerns about Tether. These articles talked about the fears and doubts that roamed the nooks and crannies of the cryptocurrency space back then.

An article posted on the Bitcoin Magazine mentioned a bizarre case of a hacker allegedly taking away $31 million from the Tether platform. The article went on to talk about the connection between Tether and Bitfinex, stressing why this connection reeked of malice.

Another article associated Tether Limited with a cover-up. The article alleged that the dollar reserves that Tether claims to hold for every coin in circulation could not be verified. This claim surfaced after Tether Limited terminated a contract it had with an audit company that was hired to verify the existence of a reserve.

In Summary

Tether (USDT) is a stablecoin whose role is not only to keep the cryptocurrency markets stable but also to offer the cryptocurrency exchanges with a faster and cheaper means of doing fiat to cryptocurrency conversions. The benefits are immense and serve the needs of individuals and cryptocurrency merchants as well. Besides, the coin heightens the features of the Bitcoin network to be more productive and relevant. The ease of converting crypto using tether does also ease the process of tumbling Bitcoins, especially, when undertaking substantially large transactions.


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