How to buy Tether (USDT)
Tether is one of the blockchain-based assets produced by Tether Limited. Tether’s cryptocoins in circulation are linked to the price of the fiat currencies controlled by the government. Tether digital tokens, the native tokens of the Tether network, go by the symbol USDT.
Tether is the largest and most popularly used stablecoin. A stablecoin is a new breed of cryptocurrencies formed to stabilize cryptocurrency valuations. In essence, a stable coin is used as a medium of exchange and a mode of storage of value. This breed is opposed to the more popular and older cryptocurrencies such as Bitcoin and Ethereum, which are used as a medium of speculative investments.
More specifically, Tether is part of the fiat collateralized stablecoins. This means that it works like the fiat currency such as the dollar, euro, and yen that back each currency in circulation. Tether was specifically developed to bridge between fiat currencies and cryptocurrencies, providing users with stability, transparency, and minimum transaction fees.
History of Tether
Tether began its history when the Realcoin project was incepted. Realcoin was based on the idea that the Bitcoin blockchain could be a platform used for issuing fiat currencies. The Realcoin project made it to the financial market through its whitepaper back in July 2014. Realcoin’s whitepaper turned out to be a head-turner as it introduced innovative technical solutions and was backed by some of the most respected names in the industry including Brock Pierce and Reeve Collins.
In November 2014, however, the Santa Monica-based startup renamed the Realcoin project as the group was joined by the cryptocurrency exchange Bitfinex. The merger resulted in the formation of Tether Limited. Hence, Tether Limited came into existence and entered the market with a three-pronged approach and introducing Tether tokens as its native coin.
Up to this day, Tether Limited allows users to store and transfer Tether coins and integrates its other digital assets for trading on different online exchanges. Based on CryptoCompare data, 80% of all bitcoin trading is done in Tether, and the stablecoin is a major source of liquidity for the cryptocurrency market.
How Tether Works
Tether converts cash into digital currency, to anchor or tether the value to the price of national currencies like the US dollar, the Euro, and the offshore Chinese yuan. Every Tether token is also 1-to-1 pegged to the dollar, so 1 USD₮ Token is always valued by Tether at 1 USD.
Tether Limited is the one responsible for accepting fiat deposits and withdrawals. It is also in charge of creating and destroying its tokens and other digital assets. Through its managed website, users can store and transfer Tethers, work on Tether integrations with online exchanges and third parties, and have custody of the fiat reserves backing the Tether coins.
Tether is a unique crypto token as it runs on the Omni blockchain protocol. Omni is known as a versatile platform with its Bitcoin anchoring capabilities. Omni currently provides this service to several blockchain companies.
Why Tether is Valuable
Aside from being one of the largest cryptocurrencies in the market, Tether is important in the crypto circulation for a crucial number of reasons:
- Tether is a primary option among investors during a bear market to convert their stored crypto tokens to Tether, avoiding fees and volatility.
- Tether, just like Bitcoin, can be sent or transferred in any part of the world while escaping conversion of funds or paying extra transference fees.
- Stablecoins like Tether can be easily used as a payment for goods and services to merchants as their value is always equal to their fiat counterparts.
- Tether facilitates the transfer of real cash into digital cash.
With its several valuable functions, it can be said that Tether is here to stay.
