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You’ve probably heard about USDT, but what exactly is it? Tether is a cryptocurrency that belongs to the group of stablecoin or stable cryptocurrencies created by the company Tether Limited. The particularity of this currency is that it is linked with a 1: 1 parity to the USD or US dollar. It also represents the euro through its EURT token and plans to work with the Japanese yen in the future.
According to the company Tether Limited, Tether reserves are backed by the FIAT reserve, that is, the same amount of USDT in circulation is in US dollars in the company’s reserves. The difference in the use of this cryptocurrency is that whatever the US dollar costs, Tether will maintain the same value, since a stablecoin maintains the value of the currency that supports it. In this way USDT avoids the volatility that characterizes the most common cryptocurrencies.
History of Tether
It all started in 2014 when the creator of ICOs, J.R Willet began to develop the idea of creating Tether. While Willet worked on MasterCoin, Brock Pierce and Craig Sellars worked on its development. In 2014 both developers presented a project called Realcoin under the Omni Layer protocol, an improved version of MasterCoin.
Under this protocol both creators were able to use the blockchain technology of Bitcoin thanks to the Omni Layer protocol. Acting on a second layer built on the Bitcoin protocol.
Realcoin changed its name to Tether (USDT) on November 20, 2014. On that day, Tether CEO Reeve Collins not only announced the name change, but indicated the creation of three new currencies: USTether (USDT), EuroTether (EURT) and YenTether (YENT). That’s how three new stablecoins came to market.
The project began to grow rapidly in late 2014 and early 2015. During its evolution, in 2017 it was announced that Tether could be used on top of the Litecoin Omni layer, although due to little interest in continuing the Litecoin project it was abandoned. However, a few months later it would start producing additional ERC-20 Tether Tokens for US dollars and euros on the Ethereum blockchain.
This is how Tether had a presence on two of the most important platforms in the crypto world, Bitcoin and Ethereum. Thanks to this history, Tether’s presence on trading platforms was boosted and its development continued until today. Today the market capitalization of this innovative project is more than 16 million dollars.
How does Tether work?
Tether operation is directed by the Omni protocol which runs on a blockchain. In this way the cryptocurrency inherits the properties of the tokens that are used in that blockchain while benefiting from the capabilities it possesses.
The Tether project is currently running on Bitcoin, Ethereum, Tron, Liquidity Network and EOS. It allows users to store assets, links and perform transactions. Tether represents transparency so your transaction log is public.
To ensure users’ peace of mind USDT created the Booking Test, thus the system links the blockchain to the accounting of their bank accounts to carry out the “tether equivalence“, thus ensuring the collateral ratio 1:1 with the US dollar.
To use USDT from the start the first step is to go to the official website and register. SA process of identification with real data is regularly carried out. This data includes surname, financial address and up to contact number. In case you don’t want to go through this process, another way to get this cryptocurrency is by the exchanges but you still have to identify yourself.
If a user wants to exchange fiat currency for USDT it is as easy as depositing the dollars in the account of Tether Limited and then the company generates and deposits the USDT in the user’s bank account. If, on the contrary, the user wants to exchange USDT for USD (American dollars), he will have to deposit them in the Tether Limited account and exchange it for dollars. The company will destroy the USDT and send the fiat currency to the user’s account.
If you want to buy Tether you will know that you need a place where to store them, a wallet. Not any wallet is suitable for any type of cryptocurrency. For this reason below we will indicate you some wallets that will come great depending on the type of storage you are looking for.
First we have the hardware storage. This type of wallet stores your private key making it impossible to access it from the network which provides security to your cryptocurrencies. An example of hardware storage that you can use is Ledger Nano x. Here you can safely save any digital assets.
Regarding the desktop wallets you can opt for Exodus. This wallet has a very simple and clear interface which makes it ideal to start in the world of cryptocurrencies. Not only can you store USDT but it gives you the ability to save around 100 tokens.
Tether vs Bitcoin
Both cryptocurrencies act on the same blockchain but are very different. Let’s look at some of their differences.
- While Tether belongs to Tether Limited, Bitcoin is a completely decentralized cryptocurrency.
- USDT(Tether) has no volatility issues while Bitcoin is a totally volatile cryptocurrency.
- Bitcoin has hundreds of miners working daily to mine bitcoins while Tether is not minable.
USDT is limited to the production considered by the company to which it belongs, Tether Limited while Bitcoin has a limit of 21 million.
Where to buy Tether (USDT)?
If you want to buy USDT, of course we will recommend you to do it from Bitnovo. And this is not simply because we are in the brand’s blog, but Bitnovo is really a fast and secure way to buy your cryptocurrencies.
Our goal as a company is to make a person who just entered the crypto world can buy any cryptocurrency in a matter of minutes, without experiencing the problems that most crypto exchanges have.