Buy Tether (USDT)
Cryptocurrency volatility is a double-edged sword. On the one hand, volatility offers excellent opportunities for investors. But, on the other hand, volatility makes it difficult to use cryptocurrencies as a store of value.
Tether is a cryptocurrency issued by the Tether Limited project. Representatives of this project claim that the price of Tether is secured by the American dollar, which is stored in the company's bank accounts.
The exchange rate of the USDT coin is stable. Even during hard times, when Bitcoin fell heavily, Tether remained stable. Its fluctuation range was higher than usual, but the average price remained 1 USD. This dynamic continues to this day. Let's understand what this cryptocurrency is and why many people buy USDT.
What is Tether (USDT)
Tether is a cryptocurrency that uses Blockchain to make transactions. The crypto is pegged to traditional currencies, specifically the US dollar. During the development of the cryptocurrency, the Omni protocol was used. Later, more advanced versions of this Stablecoin (a cryptocurrency with a stable exchange rate) were released based on the Etherium and Tron networks.
In fact, USDT cryptocurrency is the digital equivalent of the US dollar. Therefore, it is very convenient for digital trading currencies on cryptocurrency exchanges. Moreover, deposit and withdrawal of USDT are much more accessible than duplicate transactions with fiat (classic) dollars.
Crypto-enthusiasts are optimistic and often use USDT for cryptocurrency transactions. But there are those who believe Tether is not trustworthy because it is stable rather than volatile. Be that as it may, a considerable portion of transactions in the cryptocurrency market is paired with USDT. This means that there are reasons why people buy Tether.
Moreover, there is nothing to fear. There may be a risk of problems with this cryptocurrency, but so far, Tether has more pros than cons and is actively used by coin holders.
Creation of USDT
The Tether project was created in October 2014. It was developed based on the Omni Layer blockchain protocol as a more stable alternative to Bitcoin. At first, it was called RealCoin. Towards the end of 2014, the project was renamed.
The first marketplace to provide trading with Tether was Bitfinex. It was later revealed that Tether Limited is a subsidiary of Tether Holding Limited. The co-founders of the Bitfinex exchange founded this holding. It turns out they are related projects.
To promote and popularize the project, the Mastercoin Foundation was created (it later changed its name to Omni Foundation). At the helm of the company stood:
CEO - US entrepreneur Brock Pierce;
The CTO was Craig Sellars. A developer focused on blockchain innovation.
They also teamed up with entrepreneur Reeve Collins (later made famous by his BLOCKv platform for generating new digital assets) in 2014 to create the start-up Realcoin. It was headquartered in the US.
Realcoin is the first name of Tether. And it is the most popular asset created thanks to Omni Layer. In 2021, 75%+ of transactions on this platform take place on Tether.
Tether's latest significant events:
- April 2019 - according to an official statement from Stuart Hogner, the company's general counsel, only 74% of assets are backed by fiat.
- September 2019 - a token linked to the Chinese yuan is released.
- January 2020. - Launch of the gold-backed coin (XAUt).
- July 2021 - large P2P exchange Chatex introduced token support.
Key benefits of USDT (Tether)
Since earlier, we have touched on the advantages of USDT cryptocurrency, let's take a closer look at them.
If you are hesitant to buy USDT, here are the main advantages of this cryptocurrency.
- Stability. Tether's cryptocurrency linkage to the US dollar allows you to maintain the value of your funds, regardless of large fluctuations in cryptocurrency exchange rates. As a result, the Tether is a safe haven for the crypto market, where you don't have to look at the exchange rate every day, and fear quotes collapse.
The USDT crypto exchange rate remained stable even when the entire crypto market and Bitcoin quotes fell by 60% within 48 hours.
- Fiat reserves. The company claims to have 100% fiat currency reserves on the platform. This means that anyone can exchange their USDT into USD, and there is enough fiat money for everyone. In reality, crypto is only 74% backed by real USD.
And those funds mainly consist of securities and loans provided to similar projects. However, the same Bitcoin and Ethereum have no reserves, so USDT is more reliable and less likely to fit the notion of a bubble.
- Level of adoption. Crypto investors use USDT as a "safe haven" tool. Outside of the cryptocurrency market, the coin is used as a common means of payment to buy and sell goods, services, subscriptions, etc. For example, sites with sensitive content started adding payment with Tether cryptocurrency in early 2020.
- Cheap and fast online transfers. The Tether platform has been integrated with the OMG Network Plasma (OMG) sidechain of the Ethereum blockchain. Major cryptocurrency exchanges use OMG-based Blockchain Tether. So now traders can get their money faster, react to market conditions and save on commissions if needed.
- High level of capitalisation. Talks about the support of the coin by the cryptocurrency community and its high popularity. Today, Tether (USDT) capitalises $68.3 billion and ranks 5th in the cryptocurrency ranking.
How USDT works
The user, who can be either an individual or an entity, deposits classic money into the bank account of Tether Ltd. The company then issues USDT tokens at a rate of 1 USD = 1 USDT and lends the user USDT in the deposited US dollars.
For example, if a person deposits 1,000 USD, Tether will credit him with 1,000 USDT. Sometimes figures can be different because the coin is stable, but there are some minor fluctuations.
Only the amount deposited is taken into account. Now the user has the right to make transactions using this crypto, for example, to buy other cryptocurrencies for it. You can also freely engage in trading. After completing the financial activity, the user returns the Tether crypto to the deposit, the company burns the deposited USDT crypto and gives USD back in return.
Characteristics of the coin
Tether cryptocurrency (USDT) has its features and characteristics.
The issuance of USD takes place instantly. Then, the user transfers funds to the company's account and receives Tether.
USDT is a cryptocurrency that can be stored like the same Bitcoin, Litecoin, or other altcoins that function under the same rules.
Users store purchased or mined tokens in wallets that support Omni Layer.
Initially, the asset backing Tether was the US dollar, then other methods of collateral were added. As a result, Tether is now backed by several financial instruments - fiat, assets and loans.
Essentially, you can invest in Tether when you feel your volatile cryptocurrency could fall in value.
Other features include:
- A high level of stability. Even during difficult times for the crypto market, Tether has been stable.
- Low risk of volatility. Even in the case of small sharp fluctuations caused by Bitcoin's fall, Tether quickly returned to USD 1 price, deviating from the original price only for moments.
- Transparency. Reserves are posted daily on the project's website.
- The convergence of the cryptocurrency and currency markets has allowed rapid exchange between digital and classic currencies.
How to use Tether
Continuing our review of Tether, let's move on to using cryptocurrency. It is widespread to buy Tether on exchanges like Binance, to buy Bitcoins and altcoins. It can also be withdrawn from the exchange to any cryptocurrency wallet compatible with Omni Layer, Ethereum, TRON, EOS, Algorand, Solana and OMG Network. You will have to pay a small fee for reverse transactions (USDT to USD).
Many exchanges buy and sell Tether for Bitcoin, including the platforms mentioned above. You can also buy USDT through Tether. This project supports transfers in dollars to a bank account.
This stable cryptocurrency, like IOTA is often used for transactions on individual online resources, transfers between users, and moves money between exchanges. One of the most important ways to use Tezer is to purchase crypto on services that do not accept fiat money.
Suppose the exchange where you want to buy some cryptocurrencies for investment purposes does not accept regular money. In that case, you can deposit Tether coins, which are the equivalent of an evergreen currency. Once deposited with Tether tokens, the user can purchase any crypto for their portfolio. Thus, USDT helps in investing.
Where to buy USDT
If you wish to buy Tether in Kenya, you can do so on cryptocurrency exchanges. Your job is to transfer US Dollars during the transaction, and you will get Tether in return. To make the exchange as secure as possible, it is advisable to set up several security methods on your exchange account, such as two-factor authentication.
You will also be asked to verify to work with Tether. You will be charged a small transaction fee, but it rarely exceeds 1% of the amount transferred.
Cryptocurrency exchange services.
This method is also accepted. Users exchange the same dollars or other currency for individual cryptos through fiat and cryptocurrency exchange services, such as Etherium, Bitcoin, or Tether.
How else you can earn with Tether
The USDT token cannot be mined. This means that issuing a USDT coin is only possible by depositing classic (fiat) funds.
This contradiction in the nature of cryptocurrencies can be explained by the following purpose - the desire to act as an intermediary between fiat and crypto-assets. As a result, the maximum number of USDT blockchain coins issued is limited only by the number of real dollars deposited into Tether's balance sheet.
A great option to invest in Tether in Kenya is staking.
Popular crypto exchanges offer to freeze Stablecoins in an account and get interested in it. And the terms can be flexible and fixed. Unfortunately, the rates are higher than for dollar deposits in banks.
The emergence of Tether Stablecoin has brought convenience to the cryptocurrency world, as the need to repeatedly exchange fiat into and out of crypto has been significantly reduced. It turns out that USDT is a necessary and useful asset for crypto trading.
Despite various reserve availability issues, its volume over the past couple of years gives credence to Tether's value as a stable coin. In addition, USDT is also represented in the crypto market by other BUSD, USDC, TUSD and PAX coins.
Bitcoin fans believe that Tether is obscenely similar to fiat money because of its centralisation. The system issues approvals and depends on a third-party entity, which a "proper" cryptocurrency should not have.
Concluding this article, we can see that USDT is an unusual and effective currency with its risks and benefits. All you can do - decide what you should do according to your goals. Don't be afraid and keep improving your skills and the quality of your life. The world belongs to enthusiasts who keep cool!