Tether is a cryptocurrency of the stablecoin family. But what is stablecoin? These are steady coins with extremely low market volatility. In this example, manufactured by the corporation Tether Limited. The particularity of this currency is that it is linked with a parity of 1:1 to the USD or American dollar.
According to the Tether Limited company, Tether USDT reserves are backed by the FIAT reserve , that is, the same amount of USDT in circulation is in the company's reserves. The difference in the usage of this cryptocurrency is that whatever the US dollar costs, Tether will remain the same value, as a stablecoin preserves the value of the coin that supports it. In this manner, USDT avoids the volatility that characterizes the most cryptocurrencies.
History
It all began in 2014, when JR Willet, the inventor of ICOs, began to explore the concept of Tether. While Willet was working on MasterCoin, Brock Pierce and Craig Sellars were working on its development. In 2014 both developers introduced a concept named Realcoin using the Omni Layer protocol , an upgraded version of MasterCoin.
Because of the Omni Layer protocol, both creators were able to use the Bitcoin blockchain technology under this protocol. Taking action on a second layer based on the Bitcoin protocol.
On November 20, 2014, Realcoin was renamed Tether (USDT). Tether CEO Reeve Collins announced not just the name change, but also the introduction of three new coins: USTether (USDT), EuroTether (EURT), and YenTether (YENT) on the same day. This is how three new stablecoins were introduced to the market.
How does it function?
The functioning of Tether is guided by the Omni protocol which operates on a blockchain. on this manner, the cryptocurrency inherits the qualities of the tokens that are utilized on the blockchain while benefitting from the capabilities it provides.
Tether is currently built on Bitcoin, Ethereum, Tron, Liquidity Network, and EOS. It enables users to save assets, links, and transactions. Tether stands for transparency, so your transaction log is available to the public.
To ensure the users' peace of mind, USDT created the Proof of Reserves, which links the blockchain to the accounting of their bank accounts to carry out the "Tether equivalence," ensuring a 1:1 collateralization ratio with the US dollar.
The first step in using USDT is to visit the official website and register. Following that, a real-world identification process is carried out. This information includes your last name, bank address, and perhaps a phone number. If you do not want to go through this rigorous process, you can simply obtain this cryptocurrency through exchanges like Binalex.
The USDT wallet
If you want to purchase Tether, you will need a wallet to keep it safe. Any wallet will not work with any cryptocurrency. As a result, we've compiled a list of wallets that will be ideal for you depending on the type of storage you require.
First and foremost, there is hardware storage. This type of wallet secures your cryptocurrencies by storing your private key and making it impossible to access it from the network. Ledger Nano x is an example of hardware storage that you may utilize. Any digital asset can be safely stored there.
Exodus is an option for desktop wallets. This wallet has a very simple and clear interface, making it ideal for those just getting started in the world of cryptocurrencies. Not only will you be able to store USDT, but you will also be able to store approximately 100 tokens.
Why is Tether stable and how is USDT issued?
Tether is a cryptocurrency with a physical backup and token burning issuance strategy. Tether Limited, which controls the fiduciary currency reserves that guarantee the existence of a certain number of USDT, is the only entity in charge of both generating new tokens and withdrawing them from circulation.
When users deposit US dollars into company bank accounts, new USDT tokens are created. Tether Limited creates tokens on behalf of these deposits in this manner, which must have a 1:1 parity. That is, for every dollar invested, a USDT token is issued.
If, on the other hand, a customer chooses to claim their tangible US dollars, all they have to do is deposit the USDT they have in a wallet controlled by Tether. The corporation is in responsibility of destroying them, or "burning" them in the ecosystem, in order to send the money to the user's bank account.
Tether is a cryptocurrency with no supply restriction as a result of these factors. Similarly, it maintains a constant price since its goal is to be a digital version of the dollar rather than a vehicle for speculation.
When Tether loses its peg, it uses an arbitration procedure. If the price of the token falls in relation to the dollar, investors may acquire USDT at the lower price and sell it back to the firm at a 1:1 ratio. In this manner, they benefit from the price disparity, and as the hours or days pass, the price tends to climb and regain parity with the dollar.
If the token's value climbs above the dollar price, these same traders may purchase USDT from the corporation and resell it to other investors for a profit. In the long term, the increased supply in the Tether market will cause its price to fall, re-stabilizing it with the dollar. These are the market's natural moves to preserve the stability of cryptocurrencies like USDT, whose use is primarily centered on being a method of protection.
Where can I Buy or Sell Tether (USDT) in UAE?
If you wish to purchase or sell USDT in UAE, we strongly advise you to do so using Binalex. This isn't just because we're on the company's blog, but because Binalex is a quick and secure method to acquire cryptocurrency. Our company's purpose is to make it easy for everyone to buy USDT in a couple of minutes, without the issues that other crypto exchanges have.
