The world of cryptocurrencies has witnessed tremendous growth and innovation, and amidst this rapid evolution, Tether has emerged as a significant player. If what is Tether or USDT? is the question that brought you here, know that it is the most renowned stablecoin till date.
With its value pegged to the USD, Tether has become a staple in the crypto market, providing stability and convenience for traders and investors. In this blog post, we will learn all about USDT!
What is Tether (USDT)?
History of USDT: In July 2014, a team led by Brock Pierce, Reeve Collins, and Craig Sellars established a digital currency known as USDT, which was associated with Tether, a company initially headquartered in Hong Kong. Originally named Realcoin, the currency was developed using Bitcoin’s blockchain on the Omni platform. Its primary purpose was to tackle the challenges of excessive price fluctuations and the seamless conversion of fiat currencies to cryptocurrencies.
USDT is kept pegged to the USD at a 1:1 ratio through holding reserves of commercial paper, cash, treasury bills, and other assets that match the total USDT in circulation.
After its initiation, Tether (USDT) has undergone adaptations to function on various blockchains, including Ethereum, EOS, Tron, Algorand, and OMG.
At present, Tether holds the position of the third-largest cryptocurrency globally in terms of total market capitalization, surpassing all others except for Bitcoin and Ethereum. This achievement also solidifies its position as the most prominent stablecoin in the market.
How Does Tether (USDT) Work?
Similar to various other digital currencies, Tether is transferable between different blockchains. It currently exists on several blockchains, including its original platform Omni on Bitcoin, as well as Liquid, Ethereum (ETH), TRON (TRX), and other supported networks.
Now, how does Tether (USDT) work? You have to convert your fiat by depositing it to Tether’s reserves, after which the ecosystem turns it into an equivalent amount of USDT tokens.
So if you deposit $10 into the Tether reserve, you will be provided with 10 USDT tokens, keeping up with the 1:1 peg of Tether (USDT) to USD.
As for how USDT is burned, if you choose to redeem your Tether (USDT) tokens for fiat again, the associated USDT is burned, taken out of circulation, and your fiat fund is retired to you instead.
Recent Developments in the Tether (USDT) Ecosystem
Tether has been part of many a decentralized projects worldwide, fostering growth and innovation in blockchain in general. For example, Tether has recently partnered with the Government of Georgia and signed a Memorandum of Understanding (MOU). The target is to build up Georgia as a hub for blockchain and decentralized technologies not only in the US, but across the globe.
Tether’s recent projects also include the launch and successful one-year completion of ‘Plan ₿‘, an initiative aimed at establishing a European crypto hub in Lugano. Notably, Lugano now embraces Bitcoin, Tether, and its own LVGA tokens as viable payment methods for taxes, public services, tuition fees, and parking tickets.
To further support the crypto landscape, Tether has allocated a 100 million Swiss francs fund to aid crypto startups, with an additional 3 million Swiss francs dedicated to assisting local businesses in adopting cryptocurrencies.
The ‘Plan ₿’ forum, organized as part of this initiative, has emerged as a leading conference in Europe dedicated to Bitcoin and freedom. In tandem with these developments, the adoption of cryptocurrencies in daily transactions has been on the rise in Lugano, facilitated by the MyLugano app, which accommodates Bitcoin, Tether, and LVGA. Further, Tether and the City of Lugano have also partnered with Swiss Universities to bring Bitcoin education to the general populace.
These advancements have had a positive impact on the economy, promoting sustainable Bitcoin mining practices, and also fostering a new generation of blockchain-savvy workers and students.
Is USDT safe to Buy? How is Tether (USDT) Backed?
Tether (USDT) has had a tumultuous history, with the parent company being questioned on the existence of the promised fiat reserves. However, as of now, Tether (USDT) claims its value is fully backed by assets in its reserve so each unit of USDT is truly anchored to the value of 1 USD. Therefore, if you want to convert your USDT into fiat at any point, you should be able to do it without much ado.
You can check the quarterly attestations published by Tether (USDT) to see how they break down the reserves held by asset classes. As of right now, the Tether reserve has a mix of cash, cash equivalents like US treasury bills and money market funds, commercial papers, corporate bonds, loans, and even some other investments into digital assets and more.
As for the question ‘Is USDT safe to buy?’, while the decision remains completely up to your research, Tether is currently the top stablecoin across the markets. This attests to positive investor sentiments surrounding Tether (USDT) around the global markets, as does the fact that most crypto exchanges use Tether as the quote currency in their crypto pairs.
Comparison with Other Stablecoins
| Stablecoins | Issuer | Key Strengths | Target Users |
| Tether | Tether Limited | Dominant force in the markets, high liquidity, wide acceptance | Traders, investors seeking stability and ease |
| USDC | Circle | Transparency, regulatory compliance | Users prioritizing accountability and regulation |
| DAI | MarkerDAO | Decentralization, community governance | Users valuing decentralization and community input |
How to Buy USDT?
To trade in crypto pairs involving USDT, you can head over to a global crypto exchange like Milionero! You simply need to sign up on the platform, complete KYC requirements, and pick a crypto pair involving USDT that appeals to you the most.
Sign up on Millionero to start crypto trading today, and pave your way to financial freedom!
Conclusion
Tether’s significance in the crypto market cannot be overstated. As a leading stablecoin, it offers stability, ease of use, and widespread acceptance, attracting a large user base of traders and investors. Recent developments, partnerships, and integrations have further solidified Tether’s position and utility. However, it is crucial to remain vigilant about potential risks and concerns, stay informed, and adapt strategies accordingly.
With Millionero, you have a simple and beginner-friendly platform to guide your trades from start to finish. Visit our website today to learn more about our services!