The world of cryptocurrency is very vast. Indeed, while some of these virtual currencies are quite popular, such as Bitcoin, Ripple, and others, some remain very discreet but important. This is the case with Tether, which you will discover here. This virtual currency continues to surprise with its costs and other characteristics.
If you haven’t heard of it yet, you’re at the right place. Not only will you find out what it really is, but it’s also an opportunity to discover how it works. In short, here you will learn several pieces of information that will certainly help you get started once and for all.
What is Tether?
Tether is also known as Tether USD. Its trading symbol is USDT. It is, in fact, a digital token issued on different blockchains. It is backed by US dollars through the guarantee of the company Tether Limited. It was launched in 2014, but at that time, it was known as Realcoin.
It is the first stablecoin of its kind, even though this virtual currency is the younger sibling of Bitcoin, which is very popular today and can be found on the Bitcoin Era app at very good prices. Its rate is about 1 dollar. It is important to know that Tether Ltd also offers other products like Tether Gold, Tether EUR, and Tether CNH.
How does Tether USD work?
The basic principle here is simple. This virtual currency is 100% collateralized by dollar reserves held in the bank account of its founding company. This means that each Tether corresponds to approximately 1 existing US dollar. You can thus understand that it is easy to exchange this cryptocurrency for US dollars and vice versa.
The price is therefore maintained through a balance between supply and demand. Since the demand is constant at one dollar, you can easily acquire this cryptocurrency at a very low price. If the price of this virtual currency rises, it will be possible to purchase it from the company and sell it for a higher price on the market.
This balance is based on the trust given to the company. To maximize this trust, Tether Ltd provides all the information related to the management of this cryptocurrency transparently. You simply need to visit the company’s official website. On the other hand, the company conducts regular audits to show that it really holds an amount equivalent to the US dollars.
On which blockchains is Tether issued?
In its early days, this electronic currency was issued on the Bitcoin Omni layer. Today, its circulating supply is distributed across several blockchains, including Ethereum, Tron, Omni, Liquid, Bitcoin Cash, EOS, and Algorand.
What is Tether used for?
The interest in this cryptocurrency is twofold. Its primary interest is to allow virtual currency exchange platforms to have access to US dollars without having to manage actual dollars. Trading platforms that only deal with cryptocurrencies will find this type of currency convenient.
Another interest of Tether is its ability to offer users a way to hedge against volatility, without having to actually sell their cryptocurrency. This also helps avoid the corresponding tax exchanges.
This is what you need to know about this new electronic currency. You can understand that it is also an investment that can bear fruit in a few years.
