What is Tether (USDT) cryptocurrency?

What is Tether (USDT) cryptocurrency?

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Notice: This article is for informational and educational purposes only, and you should not take it as financial advice.

Tether is the only blockchain-based cryptocurrency that has coverage for all its tokens in another currency such as the dollar, euro or Japanese yen, which are held in a particular bank account. Tether tokens, the original Tether network tokens, are traded under the USDT symbol.

Tether belongs to a type of cryptocurrency called Stablecoins. They should, therefore, as the name suggests, be more stable than other cryptocurrencies. Tether’s goal is to maintain stability, unlike other popular cryptocurrencies such as Bitcoin and Ethereum, which are characterized by high price volatility.

History of Tether

The Realcoin project is the initiator of Tether. In 2014, Realcoin entered the cryptocurrency market, while white paper created a huge confusion among other players for several reasons. First and foremost, it offered several revolutionary solutions that other crypto players were unable to achieve due to technical reasons.

However, after several years of work, they decided to change their name to Tether. Technically, stablecoin Tether has entered the market with a triple approach. They presented their services to investors with three stable currencies as part of their strategy. The USD Tether is their first token, and the value of the said token is in the ratio of 1:1 with the US dollar. The second token depends on the value of the euro, while the third token known as YenTehter focused on the Japanese yen. They covered the three largest world markets.

How does Tether work?

Tether is specifically designed to build the necessary bridge between fiat currencies and cryptocurrencies and offers users stability, transparency and minimal transaction costs. It is pegged to the US dollar and is 1: 1 against the USD. However, Tether Ltd. does not provide any guarantee of any right of redemption or exchange of Tether for real money, Tether can’t be exchanged for USD.

In fact, this cryptocurrency allows individuals to use the blockchain network and related technologies for transactions in traditional currencies while reducing the instability and complexity often associated with digital currencies. In January 2021, Tether was the third-largest cryptocurrency by market capitalization, with a total market capitalization of $24.4 billion and a token value of $1.00.

We must certainly emphasize that Tether is one of the most stable but also one of the most important cryptocurrencies on the market. It offers potential investors stability, security but also the flexibility that plays the same role as the US dollar for stock exchange trading.