Buy Tether (USDT)
Tether is the most famous stablecoin, accounting for over 65%+ of all transactions on exchanges. Its stability is achieved by being backed by US dollars. There have been many scandals surrounding the project, and financial regulators have initiated investigations, but in 2021, Tether is still ranked #3 in the top coins. A detailed review of USDT cryptocurrency will allow you to evaluate its functionality and prospects.
What are stablecoin and cryptocurrency?
Let's sort this mess out, understand what stablecoin is, and see the difference between stablecoin and other cryptocurrencies.
Stablecoin is a cryptocurrency that claims to be backed by fiat currencies - dollars, pounds sterling, shekels, rubles, etc.
The idea is that, unlike cryptocurrencies such as Bitcoin, StableCoin prices remain stable depending on which fiat currency backs them.
Different Stablecoins use different strategies to achieve price stability. Some are centralised, others decentralised.
Cryptocurrency is software code; it has no offline version. Therefore, all-digital money lives only in the networked space. At the same time, they are not backed by gold. Anyone with enough money to buy special equipment can mine (produce) cryptocurrency, but there are restrictions on mining coins, so the rate of digital money must rise.
Market capitalisation helps investors gauge the size of a company. This figure is calculated as follows: the price of one share, in this case, one cryptocurrency, is multiplied by the total number of shares, i.e. coins, of the company placed on the market. Thus, the entire cryptocurrency volume shows how many cryptocurrencies are currently in circulation.
As we understand, cryptocurrency, unlike stablecoin, is not backed by fiat money. So, no doubt, the market capitalisation of conventional cryptocurrencies is not as large as that of fiat. That's why cryptocurrencies are more volatile and less stable.
What is Tether (USDT)?
Tether (USDT) was the first cryptocurrency to achieve Stablecoin status. It is a category of digital assets whose value is pegged to the exchange rate of fiat money.
The name Tether itself was first given to USDT Stablecoin by the issuer of the same name, Tether Limited. Over time, the same company issued several other assets to peg them to other fiat currencies:
- Japanese yen (JPYT);
- Euro (EURT);
- Offshore Chinese yuan (CNHT);
- Gold token (XAUT) - the equivalent of one troy ounce of gold.
But it is the token pegged to the dollar that has become the most in-demand stablecoin globally. Therefore, in the cryptocurrency community, the word Tether is understood chiefly as USDT.
It is worth keeping in mind that this asset is not the same as the dollar. Its primary purpose is to facilitate the trading of digital currencies and transfer funds between users. However, we will cover this in more detail a little later.
History of USDT
The emergence of the Tether cryptocurrency was preceded in 2013 by developing the Mastercoin protocol (later renamed Omni Layer). It was based on the Bitcoin blockchain and was its second layer. It also had its cryptocurrency of the same name. The protocol enabled fast P2P transactions without intermediaries and acted as an interface between the blockchain and users. By creating Omni Layer, developer J.R. Willet helped individuals and companies to generate new Bitcoin blockchain-based coins.
The Mastercoin Foundation (which later changed its name to Omni Foundation) was established to promote and popularise the project. At the helm of the company stood:
- CEO - US entrepreneur Brock Pierce;
- The CTO was Craig Sellars - a developer focused on blockchain innovation.
They also teamed up with entrepreneur Reeve Collins (later made famous by his BLOCKv platform for generating new digital assets) in 2014 to create the start-up Realcoin. It was headquartered in the US.
Realcoin is the first name of Tether. And it is the most popular asset created thanks to Omni Layer. In 2021, 75%+ of transactions on this platform take place on Tether.
So, the company has conducted an initial coin offering (ICO). Using the Mastercoin protocol, the developers created the first Realcoin tokens in October 2014. According to Brock Pierce, each was backed at a ratio of 1 to 1 by the organisation's dollar reserves. The project was designed to address the volatility of the crypto market. Thanks to it, 1 USD always equals 1 Realcoin, rather than the current, ever-changing price of BTC.
Features of the USDT cryptocurrency
Tether is a stablecoin. That is a special kind of cryptocurrency with real backing in assets. It solves the problem of volatility that is common in the digital currency market, as stablecoin exchange rates are more stable. That is a significant coin feature, as most cryptocurrencies are unsecured.
As we wrote earlier, the company behind the development has issued several types of tokens equal to different base units of fiat or precious metal:
The platform's cryptocurrencies are denoted with the symbol ₮ + USD, EUR, CNH.
The most popular coin is backed by dollars. It is the one that is referred to as Tether by default.
Tokens are generated in parallel on multiple blockchains:
- Bitcoin (via Omni Layer protocol);
- Ethereum (ERC-20 standard);
- TRON (TRC-20 protocol);
- Liquid Network Sidechain;
- Bitcoin Cash (Standard Ledger protocol), etc.
With the launch of cryptocurrencies on the Liquid Network, users can conduct more confidential and decentralised transactions (atomic swaps). But in the summer of 2021, most of the coins are generated on TRON and Ethereum. However, this could change, as it was also announced in April 2021 that Stablecoin would be released on the Statemint Tier 1 blockchain on the Kusama network and then on MainNet Polkadot, which is highly scalable. In addition, token generation on the Avalanche network was also announced.
Benefits of Tether
Because of the hype that cryptocurrency has generated worldwide, people are confused about where to invest and what to buy. Listed below are the benefits of Tether stablecoin. That list of benefits will make it easier for you to understand why you should invest in Tether:
- Centralised exchanges (CEX) use stablecoin to 'bring' fiat into the market without entering into agreements with banks. It eliminates the middleman in the chain and reduces bureaucracy. In addition, stablecoin transactions are more rapid and more affordable than bank transactions. Most of the pairs on cryptocurrency exchanges are traded precisely to the digital version of the dollar. It is one of the highest benefits.
- Thanks to Stablecoin, large investors can enter large sums of money into the market and then go on to invest in other coins.
- The platform allows exchanges, payment services, wallets, and ATMs to easily use USD-linked tokens (send, store, receive). And cryptocurrency is integrated into most major platforms.
- Each token has 100% collateral with company reserves (USD, securities and other assets, outstanding loans to partners). Binding to USD: 1 to 1. That means 1 USDT equals 1 USD.
- The platform adheres to the principles of 100% transparency. Information about the status of reserves is updated every day.
- By transferring other cryptocurrencies to Stablecoin, an investor can wait out a period of volatility, a price drop in the market. When the situation stabilises, they can invest in coins again.
For example, you have some Bitcoin, the exchange rate of which is volatile. As a result, you are afraid that the value of your cryptocurrency will fall. To protect yourself, you can transfer your BTC to USDT, as the USDT exchange rate always equals $1. Then, when your fears of the cryptocurrency's price dropping are over, you can transfer USDT back to BTC.
It is a terrific plus in USDT's favour. This way, you can determine for yourself another way to use this cryptocurrency and understand why you should buy USDT.
- All kinds of transactions are done through a distributed registry. It guarantees security and transparency. In addition, the platform owners adhere to international regulations and standards when it comes to protecting these transactions.
- Stablecoin's exchange rate is stable because of its peg to the dollar. As a result, the coin, backed by real assets, could potentially occupy a fiat niche in countries with unstable economies and soft national currencies.
As you see, the list of advantages of this currency is impressive and very heavy. Indeed, the dollar is currently the most universal and stable currency globally.
Where to buy Tether?
Buy via an exchange.
Stablecoin is traded on most major centralised platforms: Binance, Huobi Global, KuCoin, Kraken. Therefore, you can buy Tether in South Africa through these platforms. It is also a top pair on decentralised exchanges: 0xProtocol, Curve Finance, DODO, Mdex BSC. Also, the wide choice is because the token has many standards. Choose platforms carefully, with maximum capitalisation and a good reputation.
How to start investing in Tether (USDT) in South Africa?
If you want to invest in Tether in South Africa, you can't mine stablecoin. However, there are other ways to make a profit. For example, you can do stacking through exchanges or use the token to buy/sell other assets.
Tether is among the most popular pairs. It is profitable to buy other cryptocurrencies at a drawdown in their exchange rate and then swap back to USDT during a rise. This way, you don't have to worry and risk losing your gains due to market volatility.
You should not expect the crypto-currency price to rise, but its rate will be stable. This is an option for those who want to keep their savings and protect them from inflation (if it is fiat) or market downturns.
Here are some ways to benefit from this coin and invest in it at the right time.
Where to store USDT cryptocurrency?
Most wallets support digital currency, but you need to look at which protocol the tokens are generated. For the ERC-20 standard, Ledger Nano S, Edge, MyEtherWallet, and those created through Omni - OmniWallet, Coinomi, Ambisafe will do. It is possible to register with the platform's official wallet. TetherWallet is available on Android and iOS devices.
Should you buy USDT?
Tether is a handy tool to combat the high volatility of the crypto market. Investors' worries that the token's price will collapse in 2020 and early 2021 have proven unfounded, and the project has only continued to expand, confirming its financial reserves. Therefore, you can buy coins to save and multiply savings transactions with other cryptocurrencies.
Be observant, follow the news of the crypto-world and try to study the topic thoroughly to minimise the risks.
Remember: one who earns a lot is not the one who works hard but uses the available resources correctly. Good luck!