Buy Tether (USDT)
What is Stablecoin?
Stablecoins are cryptocurrencies designed to minimise volatile price fluctuations in the cryptocurrency environment. It can be done by linking each token to the cryptocurrency's underlying fiat money or exchange-traded commodities, such as precious metals. Created with the same characteristics as other popular cryptocurrencies, Stablecoin offers simple transactions through an existing cryptocurrency infrastructure with untrusted networks using an appropriate blockchain browser. This allows payments requested in a specific fiat currency or precious metal and can protect recipients from sudden price changes.
Although USDT's reserve and issuance system are controversial, compared to most stablecoins, USDT still offers the most extended performance history and the highest solvency.
Pros and cons of Stablecoins
Stablecoins are a versatile medium of exchange in the cryptocurrency world, their main advantage. However, due to high volatility, cryptocurrencies cannot be widely used in everyday transactions such as payment processing. Stablecoin exchange rates are predetermined and predictable, which solves this problem.
By providing protection against volatility, stablecoins are also involved in integrating cryptocurrencies with traditional financial markets. Currently, the two markets exist as separate ecosystems with somewhat limited interaction. However, with a more stable form of digital currency, cryptocurrencies will likely be used more often in credit and leverage markets, which have so far been dominated exclusively by fiat currencies issued by governments.
In addition to their usefulness in financial transactions, stablecoins can be used by traders and investors to hedge their portfolios. For example, allocating a certain percentage of a portfolio to stablecoins reduces overall risk effectively. At the same time, holding assets that can be used to buy other cryptocurrencies in a falling market also appears to be an effective strategy. Similarly, these coins can be used to "lock in" profits made when prices rise without withdrawing the money into fiat.
Despite the potential of stablecoins as a means of widespread cryptocurrency adoption, they still have some limitations.
Stablecoins backed by fiat are less decentralised than conventional cryptocurrencies, as a central entity must hold the supporting assets. As for cryptocurrency-backed and unsecured coins, users must trust the community (and the source code) to guarantee the longevity of such systems. Moreover, these are still new technologies, so they take time to reach maturity.
General description of USDT
Tether (USDT) is a stablecoin cryptocurrency designed so that an underlying asset backs each token for it in USD. Each USDT token is pegged to a US dollar, held on Tether Limited's reserve balance and obtained through the Tether platform. Tether has been issued on the Omni, Ethereum, Tron, EOS, Liquid and Algorand blockchains.
Key USDT statistics:
- The average time a token stays at an address before it is transferred - 6 weeks.
- Total USDT in circulation - 6,673,040,700.24 USDT.
- 55.33% of transactions in USDT are in Eastern trading sessions.
- Western trading sessions account for 44.67% of trades in USDT.
A quick guide to the history of Tether will help you better understand if you should buy USDT.
The token was issued in 2015 by Tether Limited. Rumours soon emerged in the cryptocurrency community that the company was linked to Bitfinex, the exchange platform that first integrated the token into its service. Paradise Papers' investigations confirmed this connection.
In the same year, Tether was integrated into its service by the US exchange platform Poloniex.
On 14 March 2019, the company said that the "backing" of the tokens was now understood to mean not only securing them with cash US dollars but also securing them with loans made to sister companies of Tether Limited.
On 30 April 2019, the company said the tokens were only 74% secured by real US dollars.
On 23 January 2020, the world's largest porn site Pornhub added Tether (USDT) as a payment option.
How does Tether work?
Tether operates as a digital token built on several blockchain protocols, including Bitcoin, Ethereum, Algorand, OMG, EOSIO (EOS), Tron (TRK) and SLP blockchains. These available options allow more assets to be created in their own blockchains. In fact, the Ethereum blockchain currently occupies the largest market for USDT.
To better understand how USDT works, we must look at how it is created. Tether was originally released using the Omni Layer protocol.
The Omni Layer protocol is a decentralised, open-source platform built on top of the Bitcoin blockchain. This blockchain-based technology allows Tether Limited to mint and burn tokens in its custody based on the amount of fiat reserves (USD) that must match the USDT offering.
In theory, each token has a corresponding USD held as collateral in the company's reserves. According to Tether Limited, it is technically possible that the total number of Tether tokens in circulation could be tracked and reported through a protocol. However, this assertion has raised one of the biggest criticisms of USDT, which is their reluctance to be fully audited.
Initially, the project stack (tools for functioning: from language to compilers and frameworks) was built on the Bitcoin blockchain only and divided into three layers (still applicable in 2021):
Lower: the Bitcoin distributed ledger with an open transaction log thanks to the consensus system.
Middle: the Omni Layer protocol. It enables the creation/destruction of tokens (expressed in metadata stored in the distributed ledger), tracking USDT movement, and P2P buy/sell transactions. Storage on OmniWallet browser wallet or cold wallet (i.e. without internet connection) has also become available.
The top one: the commercial organisation Tether Ltd. Its responsibilities include:
- receiving/sending payments in fiat and generating/destroying the appropriate amount of stablecoins;
- storage and publication of reserve information;
- integration with wallets, platforms, services;
- management, modification of applications developed under the project.
The company has also developed the Tether Treasury wallet. New tokens are generated on it.
Always try to research the cryptocurrency thoroughly if you want to buy USDT.
Before discussing its benefits for crypto trading, let's take a look at its main characteristics:
- Stability and collateral. Each token is pegged to a specific fiat currency, so its value remains the same. Furthermore, stability of value is ensured by a 1:1 ratio, i.e. 1 USDT will always be equal to 1 USD.
- Transparency. If you have any doubts about the reliability of the fiat reserve, do not worry. Tether publishes daily reports, and you can verify that all USDT in circulation corresponds to the reserve.
- Blockchain technology ensures that it is safe to use. Tether is based on open blockchain and other similar technologies, and because of this, it can take advantage of the features that make blockchain secure and transparent.
How can these features of Tether be used at different levels of crypto-trading? Exchanges, individuals, and vendors can all benefit from Tether.
So, why buy Tether? Why invest in Tether? The Tether cryptocurrency review outlines its main uses for different groups. Below we've highlighted three main target groups and highlighted the benefits of Tether.
- Private investors, traders.
- Fast cryptocurrency transactions between wallets, exchanges.
- Secure storage of funds.
- Tool for the perfection of tactics in currency arbitrage (buying and selling with the purpose to make a profit due to further counter deals).
- Crypto exchanges.
- Alternative, faster and more profitable way for depositing and withdrawing fiat on the platform.
- User asset protection. Multi-signatures are possible.
- Facilitation of online settlements of fiat balances between exchanges.
- Blockchain companies.
- A tool to offer their services in different digital currencies.
- IT is a way to reduce time and costs, as it is not necessary to cooperate with financial institutions (including banks).
- Pricing in a currency familiar to users (analogous to USD).
Where can I buy Tether?
Tether cryptocurrency is among the most sought-after assets among cryptocurrency traders. The daily volume of this coin exceeds $4 billion. Approximately 30% of this volume is distributed among three exchanges - Binance, Huobi, OKEx. USDT/BTC is considered the most remarkable pair on these exchanges. You can buy Tether in Qatar on these verified exchanges.
Some platforms even allow you to exchange Tether for fiat money. For example, the Kraken exchange will enable you to sell or buy digital currency for dollars. It is also possible to convert the coin into fiat using exchange services.
Investing in USDT
If you want to invest in Tether in Qatar, classic investing here makes no sense. You can't expect the cryptocurrency price to rise, but its exchange rate will be stable. So it is an option for those who want to keep their savings and protect them from inflation (in the case of fiat) or market downturns.
Popular crypto exchanges offer to freeze your stack of stablecoins and get interested in it. And the term can be flexible and fixed. The rates are higher than for dollar deposits in banks.
The big future
Tether could help us take a new look at the use of cryptocurrencies, as it is designed to be used with many existing cryptocurrencies. Right now USD Tether, or USDT, is mostly used, but we can safely assume that other variants are being developed.
However, this technology is at an early stage of development. When it becomes mainstream, we will be able to see the impact it has on our finances. We are happy to see such promising initiatives emerging in the crypto industry, and we hope this project will open up even more opportunities for everyone. Believe in yourself! Good luck!