What is USDT (Tether)?

Tether (USDT) is one of the most widely used stablecoins. The cryptocurrency can be found on a variety of blockchains and has seen increased trading volumes and liquidity in recent years.

USDT is pegged to a one-to-one value with the US dollar, which is useful for cryptocurrency trading since it eliminates market volatility that is typical with BTC and other crypto assets. The extra fees and delays of switching between crypto and fiat currencies are also mitigated.

What is Tether (USDT)?

Tether (USDT) is the first stablecoin in the world (a cryptocurrency that mimics the value of a fiat currency). Bitcoin investor Brock Pierce, entrepreneur Reeve Collins and software developer Craig Sellers first published it in 2014 under the name Realcoin. According to recent data, Tether’s market capitalization has surpassed 40 billion USD and has not come to a halt here.

USDT has been integrated into various platforms such as Bitcoin Blockchain, Ethereum, Tron, EOS, Liquid Network, Omni, Binance Smart Chain, etc. Buying, selling, and hoarding USDT is therefore simple and quick.

How does USDT work?

Tether’s appeal as a stablecoin stems from its dollar-indexed value. Its value is based on the value of the US dollar and is fixed to it. The only reason why 1 USDT is worth 1 US dollar is because the tether issuer holds a USD reserve to back every USDT in circulation.

USDT is not affected by cryptocurrency price swings but subjects to fluctuations in the price of the underlying fiat currency (US Dollar). For instance, if the dollar depreciates due to economic upheaval, USDT will devalue by the same amount.

When you place a buy order, the system will generate an amount of USDT equal to the number of US Dollars that you bought at the rate of 1 USDT = 1 USD, and when it’s a sell order, the system will convert an amount of USDT equal to the precise amount of USD you want to sell. This is a mechanism that ensures that the amount of USDT in circulation is always equal to the value of Tether’s reserves.

Tether Limited built a transparent system to check the quantity of USDT in circulation, which is known as the Tether Proof of Reserves. Bank accounts are published on the Transparency page on the website to prove that the value of their holdings is equal to or greater than the amount of USDT in circulation. They are also audited by auditors on a regular basis.

Benefits of USDT

Stable price

USDT has low volatility and is commonly used as a medium of exchange to purchase and sell other cryptocurrencies. Since cryptocurrencies are extremely volatile, you can switch to USDT to lower your risk when a coin is moving down and you can easily purchase a coin in USDT without having to deposit when the particular coin is moving up.

Minimize transaction time

Since the crypto market is fast-moving, you must always seize the opportunity to make a profit whenever possible. Deposits and withdrawals in US dollars from banks or a third-party financial intermediary with exchanges often take 1 to 4 days to process. As a result, holding USDT is advantageous because transactions can be completed instantaneously.

USDT is already listed on big exchanges such as Binance, one of the largest centralized exchanges in the world.

Low transaction fees

When transferring money in fiat, transaction. In case you use a currency not supported by the exchange, a foreign currency conversion fee must be added, whereas transaction fees between Tether wallets are completely waived when you transfer USDT.

Wallet options to store USDT

Despite the fact that some are skeptical about the solvency of USDT’s issuer, stablecoin remains popular on global crypto exchanges.

USDT is a digital version of the US dollar. Instead of keeping bills in a leather wallet, you can hold USDT units in a virtual account or physical device. In general, a USDT wallet’s key features of a USDT wallet enable you to store, receive and send USDT to other wallet addresses.

Ledger

  • Tether and over 1000 other crypto assets are supported by Ledger’s two wallet versions (S and X).
  • Both models support USDT but the difference is that you can control the Model X on your mobile phone.

Trezor

  • Trezor is another hardware wallet manufacturer that supports Tether with two models called Trezor One and Trezor Model T.
  • Trezor Model T is the newest version and features a touchscreen.
  • Limitation: Trezor wallets are only available for desktops.

Coinomi

  • Coinomi is a cross-platform software wallet that allows users to store over 1,500 different cryptocurrencies including USDT.
  • It has built-in exchange features that allow you to exchange the cryptocurrencies that are being held to USDT and vice versa.
  • Coinomi is available on iOS, Android, Windows, Mac, and Linux.

EzDefi

  • This is a wallet alternative that is gaining in popularity.
  • There are 2 modes suitable for all types of investors: EZ for newcomers and SECURE for experienced investors to enhance security.
  • Users can store more than 1000 different coins in their ezDeFi wallet.
  • The ezDefi mobile application integrates many decentralized features, such as multi-chain, multi-address, cloud backup, and app-extension sync to support investors in exchanging transactions quickly
  • EzDefi is available on iOS, Android, Windows, Linux, and Mac.

CONCLUSION

Stablecoins bring lots of convenience to the crypto trading market because they eliminate the need for traders to convert fiat currency and crypto several times. As a result, USDT is a useful asset to have on hand when trading cryptocurrencies.

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