Tether
USDTQuite a number of crypto enthusiasts have uncleared answers to the question: what is USDT? This page will uncover loads of information about the subject matter and expatiate in simple, clear terms all there is to know about tether. However, before going full-scale, you can check through major key points highlighted below to aid your understanding of the stablecoin.
Tether Exchange Rate
USDTKeypoints On the Question - “What is USDT”
- Tether is both a protocol and a cryptocurrency.
- As a protocol, it is referred to as Tether, meanwhile as a currency it is tether.
- Tether offers several cryptocurrencies all of which are stablecoins. Its most popular coin is USDT. Tether (USDT) is widely used within the crypto market with about 73 billion tokens distributed around the world (as of the time of writing).
- Some other Tether-issued currencies include: Tether gold (AUXT), Tether Euro (EURT), Tether Peso (MXNT) and Tether Yuan (CNHT). Three of these stablecoins are pegged to the value of currencies while one last one is pegged to the value of gold.
Tether is a Stablecoin
All of the currencies issued by Tether belong to the class of crypto coins that is called stablecoins. Stablecoins are cryptocurrencies with less rate of volatility. The prices and value of this class of crypto assets are pegged on less volatile assets like legal tender currencies (US Dollars, Chinese’s Yuan).
How Does Tether Work?
The Tether USDT coin defies the character of the cryptosystem on two fronts. Unlike many cryptocurrencies, USDT is not mined neither is it decentralized. It follows a centralized control mechanism where the company - Tether retains the right to control the amount of issuance and circulation of the coin. The interaction of the supply and demand of the coin is controlled manually by the company.
Tether is backed up by assets in the company’s reserve to ensure that USDT maintains a one-to-one exchange ratio to the US Dollar. Not just this, but that at every point where a USDT needs to be converted to US dollars or other fiat.
As a way of maintaining transparency and accountability, Tether has been mandated to publish a financial attestation of assets in its reserve. The attestation is published quarterly and reveals the asset classes that the company saves. With recourse to its last publishing, Tether’s reserve contains cash, commercial papers, corporate bonds, loans, digital currencies and some other asset classes. Tether adopts the IOU (I owe you) model such that the company promises instant exchange of stablecoins for currencies.
A Brief History of Tether
The first ever mention of Tether was in 2014 when it issued its first digital currency called the real coin. The real coin was a dollar-backed currency that served the purpose of transferring fiat currencies on the Bitcoin blockchain. It was founded by iFinex Inc. in Hongkong. Real coin was later rebranded into tether later in 2014. Ever since its inception, Tether has branched off into different other blockchains (Solana, Tron, Ethereum, Avalanche, Polygon and some others) and has launched several currencies. Records as of May 2022 showed that on the grounds of market capitalization, USDT tokens ranks third largest cryptocurrency within the market.
How is Tether Backed?
Tether runs in a centralized crypto system and has its value backed by different assets and resources owned by the founding company. These assets have equivalent value as the Tether currency and are kept in the reserve to facilitate immediate exchange of tether for fiat.
Tether vs. TerraUSD
One feature that both cryptocurrencies have in common is the level of volatility. They are both stablecoins with values dependent on the value of the USD. This means that in value, Tether and TerraUSD can be equated because one unit of these currencies are always valued at $1. The difference however, is in the mechanism through which these values are maintained.
Tether is a collaterized stablecoin with a system that ensures its continued value through the company’s assets and reserves. Hence, when the value of resources in the reserve is equal to the value of tokens in circulation or even less, then Tether has reached full reserve. TerraUSD on the other hand is an algorithmic stablecoin meaning, it is backed up by programmatic language rather than cash reserves. This maintenance scheme is a more volatile method when compared to Tether's as it has fallen below its price peg several times and was even suspended from the Binance exchange platform.
Tether vs. Bitcoin
Tether and Bitcoin vary on many grounds. However, the most obvious difference is the level of volatility. While Tether is a stablecoin whose value is pegged to the value of a real commodity (gold and USD), Bitcoin is a free ranging coin. It is not anchored on the value of any commodity. Its value is dictated by the interaction of demand and supply.
Another striking difference between both currencies is the level of control and third-party intrusion. Tether maintains a centralized financial model meanwhile, Bitcoin is decentralized. One last difference to touch on is the fact that Tether is strictly a value storage instrument unlike Bitcoin that is designed to make money and serve as an investment with Returns of investment.
Tether vs. DAI
DAI is very similar to Tether. They are both stablecoins however, they find their backing in different ways. While Tether is backed up by assets of equivalent value, DAI is a DAO-backed stablecoin. It maintains a decentralized system which differs from Tether's system. It is operated by a decentralized autonomous organization (DAO).
Tether vs. USDC
Tether and USDC are the two biggest stablecoins in the market (as of the time of writing). They both have 80% combined market share of the total stablecoin market with USDT owning about 50% and USDC about 30%. Generally, USDC is believed to be less volatile with its backup in cash and cash equivalents while USDT is backed up by assets of equivalent value. They both maintain a price peg of 1 coin to 1 USD.
Is Tether a Good Investment?
As earlier mentioned, Tether is more of a currency for storing value rather than earning returns on investment. Hence, if measured using investment as a metric of importance, Tether alongside many other stablecoins may not stand a chance. Investment is not a strong-point feature for the Tether currency because it does not directly increase in value. Tether is an avenue to escape the high volatility of the cryptosystem while still engaging the system. So, while nothing is guaranteed in the crypto network, Tether is closer to guarantee than many other tokens.
How to Exchange USDT
Exchanging USDT is one of the simplest exchange procedures in the cryptosystem. Being a popular coin, it has an inexhaustive list of crypto exchange platforms that supports it. However, as seamless as it is to find the USDT currency and to hold it, a wrong choice of an exchange platform or wallet may ruin the entire seamless process. Hence, it is important to engage reviews and to research several options before making a choice. One of the safest and most efficient is Swapzone. It is a popular exchange platform with a long list of coins.
The platform is easy to use with simple trading procedures, affordable rates, and thousands of users. To exchange USDT, visit the Swapzone, there open an account with all the required information, and follow the instructions outlined. The entire procedure can be completed in a few minutes.
Popular pairs to convert Tether
Frequently asked questions
What is the Tether exchange rate?
An exchange rate is the rate at which one cryptocurrency can be exchanged for another through a certain crypto exchange provider. Cryptocurrency exchange rates on Swapzone reflect current prices of crypto assets and are updated every 30 seconds for you to keep track of any market changes and fluctuations to profit when buying the dip or going with the best exchange rate and the lowest exchange fees. All cryptocurrency exchange providers have their own rates, which depends on supply and demand, mining rewards, costs and so on. See what else might affect the rate in our article on prices.
There are two types of exchange rates aggregated by Swapzone – fixed rates and floating rates. To receive the exact amount of crypto that is displayed at the beginning of the exchange and shield yourself against the market's volatility, opt for fixed-rate offers. If you're ready to take a risk and receive less or more than the sum displayed, go with floating-rate offers but bear in mind that floating rates may drastically change any second. You can refresh your memory on how to get the best exchange rate here.
Where to find the lowest transaction fees?
Crypto transaction fees may vary depending on the network (Ethereum transaction fees tend to spike during the congestion on the network), your chosen cryptocurrency, an instant exchange provider as well as its transaction processing speed and internal policy. These fees may be relatively low but it’s crucial to know they may be imposed in the first place.
If you want to exchange cryptocurrency with the lowest fees, beware of the offers with a grey-colored “Transaction fees are not included” label displayed under the exchange rate. To avoid having to pay an unexpected amount of fees during the exchange, opt for those that do not have that label. Read our articles to learn more about how to exchange cryptocurrency with the lowest fees and find out which assets have the lowest transaction fees.
What is average transaction time?
Transactions usually take from 5 to 30 minutes to be processed, especially if you choose currencies with speedy networks. However, there are several factors that may affect and slow down the exchange process, i.e. transaction volume, blockchain capacity, network updates, cryptocurrency itself and the capacity or chosen exchange platforms.
The processing may take longer due to the large transaction volume, congestion of the network, blockchain overload and market overload, technical issues or system failures, lack of liquidity or network maintenance.
The transaction may be also stuck if you forget to add a required Extra ID, mistake networks or use the wrong wallet for a chosen crypto asset. If you worry that the exchange processing is taking too long, please, contact us at [email protected] or via our live chat on the landing page.
How to choose a cryptocurrency wallet to store Tether?
To exchange, buy, sell or trade cryptocurrency and store your crypto keys safely and securely, you need a crypto wallet. Choosing the best cryptocurrency wallet is a question of preference and need. To learn more, read our guide on how to choose the best cryptocurrency wallet for your needs.
There are several types of wallets for different crypto assets and tasks. Software wallets, or hot storage wallets, are connected to the Internet and come in many forms: Web, Desktop, Mobile or Browser Extensions. If you want to build a large crypto portfolio, you might want to look at multi currency wallets like Exodus, MetaMask, TrustWallet, Atomic or Guarda. If a coin or a token of your choice isn’t available there, you can always opt for a single-currency wallet that is usually designed by the project that launched the asset.
If you take safety and security matters seriously, go for hardware wallets, or cold storage wallets, like Ledger or Trezor, or even paper wallets. We strongly recommend you to do your research before creating a wallet: read the reviews to see what the community thinks, learn about the fees a particular wallet imposes for performing transactions, check out supported currencies and networks and see its security policy.
What is the best cryptocurrency exchange for beginners?
There are loads of different crypto exchange services, with new platforms emerging every month. Exchange providers differ by supported currencies, liquidity providers, fees, customer support, user interface, level of privacy and anonymity and customer support, which makes it hard for beginners to understand which one to choose. To learn more about what these exchanges offer and how you can assess them, read our guide on how to choose the best exchange platform.
To navigate them through the field full of services, we conduct research and thorough analysis of the market & list both prominent and promising exchange providers, keeping in touch with their teams 24/7. We give you all the necessary data on the offers they provide as well as their brief history, KYC/AML policies, reliability and advantages, while also indicating their downsides so that you don’t have to do that yourself.
What is Swapzone?
Swapzone is an instant non-custodial cryptocurrency exchange aggregator that helps users make an informed choice when exchanging crypto assets. To make this possible, we gather the information on the exchange providers, select the parameters for comparison, aggregate and sort available deals & give an option to make a swap through providers' APIs in the same interface with a common user flow for every exchange. Still have doubts? Here's 9 reasons why you should use Swapzone to exchange crypto.
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