Demystifying the world of Tether blockchain and Tether USDT
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Demystifying the world of Tether blockchain and Tether USDT
The cryptocurrency ecosystem is fast-paced and volatile. New coins come up every day with many disappearing as fast as they emerged. Still, others have managed to stick around and provide alternatives to the more established cryptocurrencies such as Bitcoin and Ethereum. Tether USDT is one of the digital coins that has generated a lot of interest over the last few years.
It is a blockchain-based cryptocurrency which stands out because it is asset-backed. This means each Tether token comes with an equivalent value of a single U.S. Dollar. To fully appreciate what Tether is all about, you need to look at how it works and what it intends to achieve.
This post delves into Tether to demystify the crypto coin and help you make an informed investment decision.
Tether Explained: Breaking down Tether Cryptocurrency
One of the biggest downsides of cryptocurrencies since the launch of Bitcoin in 2009 is their volatility. For instance, between June 26, 2019, and July 2, 2019, Bitcoin price jumped to $14,000 and plunged to $9,600. The price was later to jump to rebound to $12,000.
Every other alternative coin seeks to provide solutions for weakness in the cryptocurrency ecosystem but none has fully dealt with volatility. The idea behind Tether platform is to provide stability in the use of cryptocurrency. It falls in the class of cryptocurrency known as stablecoins. These new coins seek to revolutionize the crypto landscape with price stability and steady valuations.
Tether, launched in 2014, is a fiat collateralized stablecoin which means it is pegged against the U.S. dollar. It was issued on the Bitcoin blockchain via the Omni Layer Protocol. The crypto coin maintains a 1-to-1 ratio with the U.S. dollar in terms of value.
TetherUSDT builds a gateway between fiat and cryptocurrencies to improve transparency and stability whilst lowering transaction costs. For this model to work, the developers behind Tether USDT hold in reserve assets of equal value to the cryptocoin.
In essence, cryptocurrency users and traders can now leverage the mutual benefits of open blockchain technology and traditional currency. You can now convert your cash into a stable coin equivalent.
Why the Hype around Tether?
The amount of research and innovation in Tether explained the splash it created on launch in 2014. It is a coin based on years of scientific and academic research in a bid to overcome challenges experienced by other cryptocoins. Tether USDT makes things easier for traders and users who want a straightforward way to transact.
You can now purchase Tether USDT with fiat currency and use the same for other transactions online. You can use this cryptocoin to buy other cryptocurrencies or send to other users.
This cryptocurrency also speeds up the rate of online transactions, normally, USD deposits and withdrawals can take days but you can speed things up by using Tether USDT. Transactions using this stablecoin are also cheaper and hassle-free.
The biggest advantage of Tether USDT is in price stability. Many would-be investors in cryptocurrency keep off the market due to price fluctuations. This new digital token offers a timely solution because its price is always backed by the USD. You can use it to buy other cryptocurrencies or store your assets. These advantages of Tether USDT answer many questions surrounding the reality of Stablecoins.
Wrapping Up
Tether is one of the most dominant topics in the cryptocurrency industry today. It’s thus important to stay up-to-date with everything happening around this innovative stablecoin. With the right information, you can then make the right crypto investment decision.
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