USD₮ – Tether
Teth-er – to fasten or confine, tie to
USD₮ Tether is something of a ‘hybrid’ crypto-fiat coin. Its value is pegged (tethered) to the value of the USD fiat currency. It is also offered as a EUR₮ and rumors are that a Yen version will soon become available – JPY₮
Holding Tether will protect you from the inherent volatility of cryptocurrency but is exposed to the fluctuations of the equivalent fiat currency. If for example, the USD halved in value your USD₮ would do the same.
How does Tether work?
USD₮ Tether is based on the Omni Platform. This is a platform used for various digital assets which are connected to the Bitcoin blockchain.
Only central banks, backed by world governments, can declare their currency as holding value. If Tether simply claimed that their tokens were worth $1, that statement would be quite false, unless there was a tangible way to prove it. In other words, for USDT to hold any value it must be backed by the real thing – $ reserves. For 1 USD₮ to be worth $1, it must be redeemable at any time for $1 of fiat currency.
In the Tether Proof of Reserves system, the amount of USD₮ in circulation can be easily checked on the Bitcoin blockchain. The tools to enable this can be found at Omniexplorer.info. The corresponding amount of USD held in reserves is proved by publishing their bank balance whilst allowing periodic audits by appointed professionals. The amount of USD₮ in circulation must always correspond to the amount of USD in the bank account used by Tether Limited. This allows them to receive and send fiat currency to clients who purchase/redeem USD₮ directly on the Tether Platform.
To prove that the amount of USD in the bank account is the same or more than the USD₮ in circulation, Tether Limited publishes the bank account balance on its website’s Transparency page. Professional auditors will regularly verify, sign, and publish the underlying bank balance and financial transfer statement.
How to use Tether
Trading Tether for cryptocurrency can be done through a variety of exchanges such as binance. In addition, it is becoming more popular, being added to various exchanges over time. The Tether.to platform also allows the conversion between USD or Euro to and from your bank account. You can also trade to BTC on the Tether platform.
If you are a regular trader, the option to be able to convert to USD₮ on your exchange is an invaluable one. If you feel the market you are in is about to significantly correct and you want to temporarily come out of that market then a conversion to USDT whilst the market dips is a great tool to have. Then when you feel you’re ready to buy again and re-enter the market a simple trade from USD₮ say to BTC can be completed easily.
An example of the market pairs for USD₮ from binace is shown below:
Fiat for USD₮
The most popular way to obtain USD₮ is to exchange with another currency as we have seen. Exchanges offering fiat to USD₮ are:
USD₮ has a number of doubters and searches on the internet will show many results if you want to research further. We suggest that it is a great way to temporarily hold assets on an exchange if you are regularly trading in and out of various coins. It obviously is not a recommended way to store either fiat or cryptocurrency in any amount or for any long time periods.