Tether (USDT): Real World Fiat Currency, Through Blockchain Technology
In this article, we are going to look at the anatomy of Tether (USDT). What makes it a popular stablecoin, and why it is growing rampantly? So, without wasting a minute, let us start digging!
What is Tether (USDT)?
The most popular stablecoin- Tether, doesn’t need much of an introduction. This stablecoin offers a fixed exchange rate in many types of fiat currency. With Tether, USDT is pegged with the U.S. Dollar. Simply put, Tether is a name for the U.S. Dollar, which is converted into cryptocurrency through blockchain technology.
What’s the point of pegging to fiat currency with crypto, you may ask:
Well, pegging the exchange rate allows an easy transfer of fiat currency equivalent when it comes to exchanging from one currency to another. Also, Tether allows freedom from traditional fiat currency regulations and fiat currency volatility. In a way, you can call it a crypto-turned fiat currency. Therefore, depending on the currency rate, one unit of USDT will be equal to one unit of the U.S. Dollar. Tether is also commonly pegged to Euro, which forms EURT.
How does Tether work?
Omni platform is what this cryptocurrency is based on. Although the Omni platform also lends support for many other bitcoin blockchain-based digital assets. For instance, there are Tether based Bitcoin and Tether based Ethereum coins that are already in the market.
The concept of collateral currency works behind Tether. It simply means an equal amount of U.S. Dollar equates to the same unit of USDT. Also, it is a mandate that the USDT is always available to the user for redemption at any point of time. Currently, USDT is only converted to U.S. Dollar fiat currency and is offered by a handful of crypto exchanges.
Using Tether is a boon for traders:
All Tether transactions take are a few minutes: USDT offers many helpful factors that can solidly help a trader. The first way in which it is helpful is the fact that it saves a lot of time in comparison to the traditional bank transfers, which takes days. Tether transactions get successfully completed within a few minutes. The quick transaction quality of Tether allows traders and investors to take advantage of arbitrage opportunities.
The transaction fees: You remember the cost of bank transfers that taxed the sender with heavy SWIFT charges, sometimes middle-man fees, foreign exchange conversion rate charges, etc.? Now, if you look at the transaction fee of Tether, it would be a big sigh of relief. Well, Tether charges ZERO Fees for a transfer between Tether wallets!
Stable price: The stablecoins give a crypto-volatility immunity. The volatile nature of cryptocurrency is not unknown. It can take the user to great heights and can also plunge the user to deep valleys. Traders do require a sense of stability for operating their businesses. And that is where the stable nature of Tether comes in play.
Tether’s performance in the real world:
Due to the unique beneficial nature of Tether, it is celebrated and adored by many platforms. Recently, on 10th Feb., Tether was launched on Algorand’s Next Generation Blockchain Platform, as its first-ever stablecoin. This kind of market news shows how Tether is seen in the light of being a trustworthy, stable, and efficient stablecoin.
On the other hand, the success of Tether has also made Tether the company to launch a digital asset called- ‘Tether Gold (XAU₮).’ The vision behind this gold supported digital asset is to offer exposure to the traditional asset- the physical gold (XAU). The growing demand for a digital exposure to gold inspired Tether to launch this gold supported digital asset. On this matter, the CTO at Tether- Paolo Ardoino shared:
“Tether Gold provides the combined benefits of both physical and digital assets, removing the drawbacks of holding gold in more traditional ways, such as high storage costs and restricted access.”
Conclusion:
Tether in the world of crypto volatility is a rock that can assure you stability. Its past performance has proved its mettle in terms of exceptional quick transactions, fair fiat currency rates, zero Tether wallet transaction fees, and so on. In our view, Tether is a sensible choice which brings you a lot of practical advantages.
