Tether Price

What is Tether (USDT)?

Tether (USDT) is a type of cryptocurrency called stablecoin. Stablecoins are digital currencies that aim to mirror the value of a specific fiat currency; in Tether’s case, it’s the U.S. dollar. The core concept is that each USDT token is equivalent to one U.S. dollar. The tokens are issued by a Hong Kong-based company Tether. They offer the benefits of digital currencies, such as fast transactions and freedom from intermediaries, while maintaining a stable value, a unique feature in the highly volatile crypto market.

Tether also has other stablecoins, such as:

• Tether gold (AUXT): pegged to gold’s price
• Tether euro (EURT): pegged to euro
• Tether peso (MXNT): pegged to the Mexican peso
• Tether yuan (CNHT): pegged to the offshore Chinese yuan

Who are the founders of Tether?

Tether was the brainchild of a group of early Bitcoin enthusiasts who were keen to provide a digital representation of traditional fiat currencies. This group, which included Brock Pierce, Reeve Collins, and Craig Sellars, launched the Tether platform and the USDT coin in 2014.

How does Tether (USDT) work?

Tether (USDT) operates differently from many cryptocurrencies like bitcoin or ether. USDT is built on top of popular blockchains, such as Algorand, Avalanche, Bitcoin Cash’s Simple Ledger Protocol (SLP), Ethereum, EOS, Liquid Network, Omni, Polygon, Tezos, Tron, Solana, and Statemine.

USDT is issued or destroyed in response to user demand. Unlike other decentralized cryptocurrencies, Tether has a central entity, Tether company, that oversees the operation and supply of USDT coins.

How do network consensus and validation work on USDT?

As Tether doesn’t have its own blockchain, the consensus and validation mechanisms of USDT rely on the underlying blockchain that it operates on. For example, if USDT is issued on the Ethereum network, it follows Ethereum’s consensus protocol.

Initially, USDT was designed to use the Bitcoin network via the Omni Layer protocol. However, Tether has evolved and can now operate on the Ethereum network as an ERC-20 token. This allows Tether to use Ethereum’s features like smart contracts and decentralized applications. 

The important thing to remember is that because Tether operates on different blockchains, you need to make sure the destination address is compatible with the blockchain you’re using. Always check the details carefully to ensure a smooth transfer of your USDT tokens.

What makes Tether unique?

Tether offers a significant degree of stability compared to other cryptocurrencies. Its 1:1 peg with the U.S. dollar makes it a popular choice for investors looking for a safe haven during volatile market conditions. This stability is also useful for transferring money quickly across countries, making USDT a convenient tool in the world of digital finance. Tether currently ranks 3 by market cap with a valuation of $133,403,081,553.

What makes Tether (USDT) different from other stablecoins?

While other stablecoins like USDT, USDC, and BUSD are all backed by the USD, there are key differences between them. All of them are designed to maintain a 1:1 ratio with the US dollar, making the USDT price more stable than traditional cryptocurrencies. They’re widely supported by major cryptocurrency exchanges and wallets and can be exchanged on a 1:1 basis for cash.

A significant distinction lies in the blockchains they’re available on. For instance, BUSD is limited to Ethereum and BNB Chain, whereas USDT and USDC are more versatile, appearing on various networks such as Solana, Algorand, and Avalanche. This multichain presence enhances transaction speed and could potentially lower fees.

However, USDT had some controversies over its reserve management. Tether coin price has sometimes dropped below the $1 mark, leading to questions about the full backing of its dollar reserves. 

USDC and BUSD have earned the backing of major financial institutions. However, there were some issues with their stability: a glitch in Binance’s collateralization system that led to BUSD depegging or the notable dip in USDC’s value following Silicon Valley Bank’s closure in 2023.

Tether security and supply

How is the Tether network secured?

The security of the Tether network depends on the security of the underlying blockchain on which USDT is issued. Tether also claims that every USDT token is backed 1:1 with traditional currency held in its reserves, and it aims to maintain transparency by publishing a record of its reserves regularly.

How many Tether (USDT) coins are there in circulation?

The total supply of Tether (USDT) coins is determined by the amount of U.S. dollar reserves that Tether has. The company claims that each USDT token is backed by one U.S. dollar held in its reserves. As of November 29, 2024, $133,205,067,986 USDT tokens are in circulation.

How and where to buy Tether (USDT)

You can buy Tether (USDT) on various popular cryptocurrency exchanges, such as Binance, Coinbase, Kraken, and Kucoin.

• Select a suitable cryptocurrency exchange where USDT is listed.
• Set up an account on the chosen exchange.
• Select Tether (USDT), and choose your preferred payment method.
• Purchase the amount of USDT you want.
• Get a crypto wallet where you’ll store your USDT. A hardware wallet offers higher security but requires an investment, while a software wallet is more accessible but potentially less secure.
• Transfer your USDT to your wallet for safekeeping.

It’s important to know the risks involved in investing in any cryptocurrency, including USDT, so conduct thorough research before making any investment decisions.

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