What is Tether (USDT)?

Souce

Tether (USDT) is the third largest cryptocurrency in terms of capitalization and the first in terms of trading volume in the world, whose rate is always stable due to its parity with the US dollar.

Imagine for a moment a cow or any animal tied in the barn by some structure, or our cell phone connected to a wiffi line.

Tether creates a new bridge between cryptocurrencies and Fiat currencies, creating a new digital asset with all the benefits of being based on blockchain, offering investors an easy way to access a "one-to-one" trade with the USD, without the innate volatility of other cryptocurrencies.

While providing this stability, investors can have a digital asset similar to a fiat currency, but with the ease of trading other currencies in the crypto markets. The key features of Tether make it a popular currency.

For this reason, Tether (USDT) is considered a stable coin.
"A stablecoin is a type of cryptocurrency backed by reserve assets and offers minimal price volatility."

Each unit of tether that is put into circulation is backed 1 to 1 (ie one Tether USDT is one dollar) by the corresponding unit of fiat currency, held on deposit by Tether Limited - based in Hong withepaperTether

Thanks to this parity, the tether has no supply limit. It also offers people a cryptocurrency capable of acting as a medium of exchange and a store of value.

Suppose you want to convert 50 USD to USDT. You would get the same amount in USDT (50 USDT), but your resources would be easily traceable, tradable, and redeemable just like a cryptocurrency.

I give you another example this time, from the perspective of a regular trader ... Let's say there are open positions in the bitcoin market (BTC). If the market turns down, traders can convert their BTC to USDT until the (likely) end of the bear cycle to prevent their resources from losing value. This opens up the opportunity to buy back the BTC at a lower price using the same USDT and wait for the price to rise again.

Tether (USDT) collated with Fiat money

Tether (USDT) belongs to the classification of stable coins collateralized for fiat money, currently they are the most used by the confidence that gives the most conservative investors to have a backing in State currency, as well as to present a simple business model in technical terms. In this case, the issuer of the stablecoin Tether must have a demonstrable support in USD, in a 1: 1 ratio. That is, for every stablecoin issued, there must be, one US dollar backing it.

However, it should be noted that Tether (USTD) has challenges as long as they remain on the market. With a fiat money guarantee, the counterparty problem is reintroduced into the process, having to rely on a third party, for example, a bank, for custody of the backup. In this case, the decentralized essence of cryptocurrencies can be affected.

Tether main features:

• It is a stable currency guaranteed in fiat money.
• The Tether balance is incomparable, in addition to making it possible to exchange your tokens for real money in a simple way. The cost of the Tether depends on the direct form of the currency with which it operates. 1: 1 ratio (USD to USDT)
• There are only fees when exchanging Tether for real fiat money. while in transactions between virtual currencies or between wallets they are null.
• Tether is a transparent and reliable platform because its balances are published in real time, this allows to identify probable errors to take the main corrective measures.
• It is considered as an engine that promotes financial transactions and not as an asset to invest or with which it is viable to obtain goods and services, in the same way that occurs with other cryptocurrencies.
• Enables rapid transfer of crypto funds between exchanges to spot and take advantage of opportunities that present themselves without delay.

Uses of the Tether (USDT)

• USDT has been a very accepted cryptocurrency by many exchange houses, if it is very easy for anyone to buy to exchange other cryptocurrencies from several Exchamge.

• Use USDT to analyze the market situation. The value of USDT can reflect in a certain way the movement of the cryptocurrency market, a thermometer of entry and exit of capital in the market.

• Minimize investment risk with USDT. When the market is in an adjustment period, it is possible to convert your cryptocurrencies for USDT so as not to suffer the devaluation of your asset. When the market starts to recover, simply buy cryptocurrencies with USDT on your account.

Conclusión

Stablecoins came to bring many benefits to the world of cryptocurrency trading as they reduce the need for traders to convert multiple times between fiat currencies and cryptocurrencies. In addition, they reduce the risk of losses that can be caused by market volatility. As such, USDT is a useful asset to have on hand for crypto trading.

---

Thank you teacher @ yhoan2on for your class I hope to continue learning.

Grateful:

@steemcurator01
@steemcurator02
@steemitblog
@yohan2on