What is Tether?
By Admin
What is Tether (USDT)?
ether (USDT) is a cryptocurrency whose value is pegged to the US dollar. As a so-called stablecoin, USDT aims for a fixed exchange rate of 1:1 to the US dollar. Tether is mainly used for trading against Bitcoin and other cryptocurrencies.
Tether is the stablecoin with the largest market capitalisation. Stablecoins are tokens based on blockchain technology whose value is linked to another currency or asset. USDT can be described as a hybrid currency, as the token itself is a cryptocurrency, but the value of a single token is pegged to the US dollar.
How does Tether (USDT) work?
USDT is issued by the company Tether Labs. Each USDT token is supposed to be backed 1:1 by Tether's reserve. While Tether Labs originally stated that it holds one US dollar as a cash reserve for each USDT, Tether now also uses other reserves to cover USDT. If the demand for USDT increases, fresh units are minted. If USDT are exchanged for USD again at Tether Labs, the USDT units are burnt.
Tether does not have its own blockchain, but can be issued on any blockchain. Currently, the most popular blockchains for issuing Tether are Ethereum (ETH) and Tron (TRX). USDT can be issued, traded or transferred like Bitcoin or other cryptocurrencies.
Why was Tether created?
The world's largest stablecoin was invented to solve two fundamental problems in the crypto space. One is to enable the cross-border transfer of a stable currency with low fees. The second is to facilitate lightning-fast trading of cryptocurrencies: Tether makes it possible to park trading profits in USDT without having to leave the crypto ecosystem.
Who invented Tether (USDT)?
Tether ,originally called Realcoin, was introduced on 9 July 2014 by Brock Pierce, Reeve Collins and Craig Sellars. In November 2014, the name was changed to Tether, as they wanted to prevent the cryptocurrency from being seen as an alternative to Bitcoin. During its beta phase, Tether entered into partnerships with the Bitfinex trading platform and with several start-ups supported by Brock Pierce.
What is the difference between Bitcoin and Tether (USDT)?
Compared to Bitcoin, the Tether price is hardly volatile because a single token is pegged to the US dollar. Furthermore, Tether cannot be mined decentrally either, but is issued by the company Tether Limited, which has its headquarters in Hong Kong. It is thus a centralised stablecoin
FAQ
Tether (USDT) is a popular stablecoin that crypto enthusiasts have used for years to leverage their cryptocurrency trades. USDT is pegged to the US dollar and, in theory, should not be subject to the market fluctuations that other cryptocurrencies, such as Bitcoin, experience all the time.
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