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What is Tether?
Tether is a centralised innovation in the blockchain space that has made it possible to convert any fiat currency into a corresponding cryptocurrency. When Tehther Limited receives any fiat currency, they will then immediately accord the resultant Tether coin with all the functionalities of the blockchain, while at the same time allowing the Tether retain the simplicity, stability, and usability of the ‘Tethered’ fiat currency. Examples of stablecoins issued with Tether is the Chinese Yan, CNH₮, and the US Dollar, USD₮
As a stablecoin, Tethers eliminate the volatility associated with Bitcoin and other altcoins, while retaining all the other blockchain capabilities and awarding them to the world’s assets.
Tether is made possible by the Omni layer Protocol operating on the Bitcoin blockchain. It uses what is known as Proof of Reserves. Tethers maintain a near-perfect 1:1 parity with their underlying assets
Some major features of Tether include:
Because Tethers are backed by fiat currency, users can have the benefits of digital, blockchain-based transactions without being subject to the volatility of most cryptocurrencies.
Tether claims that its fiat reserve account is regularly audited to verify that its reserve accounts can actually back up the value of Tethers in circulation. The balance is updated regularly and is publicly accessible at all times. Additionally, all Tether transactions are recorded on the public blockchain.
Low transaction fees
There are no transaction fees when sending money between two Tether accounts or any two blockchain-based wallets capable of storing Tether. However, converting Tethers back into fiat currency may require paying some service or transaction fees to the parent company.
What is USDT?
Tether created USDT, a cryptocurrency pegged to the US dollar. The USDT coin was created in a bid to support crypto to USD trade on other exchanges. When you want to sell more volatile cryptos like Bitcoin and exchange them to USD, then USDT offers some compelling advantages when compared to exchanging into actual USD.
Some of the benefits for traders include faster transaction times (seconds vs. days) and lower transaction costs. For exchanges, it means that they don’t need to hold USD denominated bank accounts, which at times can be a liability as the established financial services industry moves between supporting and blocking cryptocurrencies.
So if you submit some USD to be converted to Tether, you get the same amount of USDT, which is USD Tether (USDT), that can now be tradable, exchangeable and redeemable as a cryptocurrency.
How to buy USDT?
Tether tokens can be purchased on a number of popular cryptocurrency exchanges, including Bitfinex, Kraken and of course Blockbasis .
While the value of Tether tokens is pegged to the US dollar, some exchanges do not offer direct USD/USDT pairings, and you will need to use Bitcoin or another cryptocurrency to trade for Tether.
How is Tether different from Bitcoin?
Unlike Bitcoin, Tether tokens are backed by reserves of fiat currency held by the company, Tether Limited. Bitcoin was designed largely to serve as an alternative to traditional currencies, operating on a peer-to-peer network outside of the scope of national borders and financial institutions.
Tether, on the other hand, was designed specifically to integrate fiat currencies with the blockchain by converting physical cash into digital currency.