Tether (USDT) Review – Crypto Coin Judge
A digital token backed by fiat currency provides decentralized method of exchanging value while using similar accounting unit. The token users and other market participants can enjoy the benefits of latest blockchain technology along with its implanted consensus system having less volatile currencies and assets. Therefore, to maintain the accountability and stability in exchange price, Tether Limited has proposed the new way of maintaining 1-to-1 reserve ratio between cryptocurrency token called “Tethers.” By utilizes Proof of Reserves, bitcoin blockchain and other audit methods, Tether ensures that issued tokens are fully backed and reserved for all times.
The transactions done through fiat currencies are very slow and expensive, and completely depend upon the prevailing exchange rate and transaction charges. This is the prime reason for the usage of cryptocurrencies (Bitcoin, Ethereum, Litecoin, Ripple, Dogecoin) at the first place. Actually, when your transaction currency goes digital, it will increase the speed and stability of transaction by accomplishing the same within a matter of minutes. It will ultimately reduce the burden of doing paperwork that needs to be done with fiat currencies. But, there is only one drawback – you cannot do the cross platform currency transaction, that means you are not able to transfer your bitcoin currency in the form of USD in your client’s account. Also, you cannot do any transaction to your service provider in the form of bitcoin through bank transfer or in USD. This is the point where Tether comes in the existence.
The fiat-pegged crypto currencies provided by Tether solution is called as “Tethers”. All the tethers will be initially issued on bitcoin blockchain through Omni layer protocol so that they can exist as a cryptocurrency token. The Tether unit issued for the circulation is supported by one-to-one ratio that is one 1 USD₮ (Tether) is equal to 1 USD dollar as per the corresponding fiat currency unit. After the issuing of Tethers, it can be used like a bitcoin or any other cryptocurrency that you can store (like bitcoin store), spend or transfer. In this way fiat currency has gained the cryptocurrency properties and its price will be permanently fixed to the price of the fiat currency.
By using digital token supported by fiat currency, organizations and individuals can enjoy the benefit of robust and decentralized way of value exchange while using a familiar accounting unit. This innovative creation of blockchain technology offers cryptographically secured and auditable global ledger for its users.
What is Tether?
Tether Limited is the company behind the Tether Tokens. These tokens are supported by actual fiat currency assets that include Euros, USD, and soon will be supporting Japanese Yen too. In other words, you can say it is a digital currency which can convert digital currency into conventional currencies like Dollar, Yen and Euro. The value of one Tether is equal to one underlying unit of the currency that supports it. For instance – U.S dollar, and it is backed by 100% actual assets in the reserve account of the Tether Platform. The Tether is “tethered” or anchored, therefore provides excellent protection against the volatility of cryptocurrencies.
It allows businesses that include payment processors, wallets, ATMs and financial services to use fiat backed tokens supported by blockchain technology. Moreover, Tether enables the users to receive, send and store digital tokens person-to-person globally, with the advantage of quick and secure transactions for a fraction of cost of any alternative. Tether combines the perks of open blockchain technology and traditional currency that include:
Stable currency – It can convert cash into digital currency.
100% backed – Every Tether is supported by 1-to-1 through traditional currency held in the Tether Reserve Account. It means that 1 USD₮ is always equal to 1 USD.
Transparent – The Tether Reserve holding are always published on daily basis and subject to the regular professional audits. The circulated Tethers will always match with the Tether reserve account.
Extensive Integration – In today’s market, Tether is considered as extensively integrated digital-to-fiat currency. It is used for buying and selling at Shapeshift, GoCoin, Bitfinex and other exchanges.
Blockchain technology – Tether Platform is developed on open blockchain technologies to leverage the transparency and security features provided by it.
Secure and safe – Tether is backed by blockchain- enabled technology to deliver high-end quality security features while meeting the controls of international compliance standards and regulations.
Here are the benefits of Tether over other fiat-pegged currencies
1- Tethers can be utilized like a bitcoin such as in a decentralized cryptographically secure environment, in a p2p and pseudo-anonymous manner.
2- It can be easily incorporated with exchanges, merchants and wallets, similarly to bitcoin or other cryptocurrencies.
3- Tether Limited works on simple and effective approach for conducting Proof of Reserves. It efficiently works in reducing their counterparty risk as the custodian of the reserve assets.
4- The best part is that Tether redemption will not encounter with any liquidity constraints or pricing. Its users can enjoy the benefits of quick selling and buying as many tethers as per their wish at very low charges.
5- In comparing to the complicated derivative strategies or collateralization techniques, Tether offers easy 1-to-1 backing implementation which can be easily understood by the non-technical users.
6- Tethers are free from any market risks like liquidity crunches, black swan events, etc. because they are sustained according to one-to-one ratio rather than trusting on market forces.
7- It comes with Omni Layer protocol properties that provide the benefits of wallet encryption, decentralized exchange, bitcoin based transparency, accountability, etc.
Tether Innovation for safe and secure exchange and wallet audits
Currently, the exchange and wallets audits are unreliable and insecure for doing transactions. Many times, insolvency has been occurred in Bitcoin ecosystem either through outright fraud, hacks or mismanagement. According to Tether, exchange and wallet audits are not trustworthy and do not provide guarantee to the users of the solvency of the custodian or exchange. As such, there is a great scope of improving the exchange audit processes; Tether Limited has come up with Proof of Reserve concept to eliminate this risk.
The Tethers Proof of Reserves configuration is beneficial for simplifying the process of proving by ensuring that total number of circulated tethers is always backed with equal amount of fiat currency. In Tether configuration, each tetherUSD used in the circulation represents the 1 US dollar held in their reserve i.e. one-to-one ratio.
What problems are solved by Tether?
Tether has resolved many problems for different user groups that include Exchanges, Merchants and individuals. Let’s read about the problems and its solutions provided by Tether to the user groups:-
1. For Exchanges
Accepting fiat deposites and withdrawals by utlizing legacy finacial system can be complicated for Exchange operator. Key issues include:
✓ Difficulty in finding right payment providers for the exchange
✓ Prohibitive costs for small value transfers
✓ Problem with currency conversion fee
✓ Integration of the platform with banks having no APIs
✓ Take taken to clear international wire transfers
Tehther offers best solutions to resolve all the above complications with outstanding benefits that include:-
▪ Allowing the acceptance of cryptofiats as deposit, storage and withdrawal, rather than using the methods of payment provider or legacy bank.
▪ Secure customer assets by accepting cryptoprocesses.
▪ Multisignature security with HD wallets, cold and hot wallets, etc.
▪ Audits are more secure and easy in a crypto enivronment
▪ Easy to add other tethered fiat currencies as trading pairs to the platform
▪ Tether can be used to do any exchange that can be done with Bitcoin
Exchnage users understand the risk that can come by holding fiat currencies on an exchnage. Tether belives that using the coin exposes exchange users to minimum risks compared to continully holding fiat on exchanges.
2. For Individuals
Today, there are numerous Bitcoin users around the world, like the long term investors seeking to store Bitcoin in a safe and secure way. Traders who want to earn profits on daily basis, tech savvy shoppers who want to maintain their privacy and many others have found Bitcoins useful for various purposes. Tether belives that it can offers similar useful benefits for all those individuals like:-
▪ Make safe and secure transactions in USD/fiat value, pseudo anonymously, by eliminating the role of any middlemen/intermediaries.
▪ Eliminate the risk of fiat storing on exchange by making crypto fiat in and out of exchanges easy.
▪ Don’t need to open fiat bank account for storing fiat value.
▪ Individual can use tethers to do all those things that can be done with Bitcoin.
Tether can prove beneficial for Merchants in different ways, like:-
▪ Price goods in USD/Fiat value, not in bitcoin
▪ Offers novel services due to fiat crypto features
▪ Eliminates the conversion from Bitcoin to USD/Fiat and other related fees and processes
▪ Ensure greater privacy while preventing chargebacks and reduce fees
▪ Merchants can do anything with Tether that they can do with Bitcoin
Tether cannot be mined as mining is against Tether’s purpose and nature of currency that is always linked with USD value.
Features of Tether Wallet
Tether will convert your money into one-to-one backed stable currency and allow doing more with your hard earned cash.
Transact with Currency – Send, receive and store one-to-one backed digital currency on different tether-integrated platforms, exchanges and wallets.
Fund your Account – By using other tether supported wallets, you can add value to your exchange wallets and accounts.
Diminish Instability – Convert your cash into stable digital currency and hold it in form of USD, JPY or EUR.
Send to Others – Transfer your digital currency to other tether-enabled wallets and exchanges.
How to buy Tether?
Using USD₮ is fairly very simple. Once you are on exchanges such as Bittrex or Poloniex, it can be easily utilized for buying Bitcoin and other crypto coins. Moreover, you can conveniently transfer them from an exchange to any other Omni Layer supported wallet.
Tether will cost no fee on any transaction, although external wallets and exchanges can charge little fees for it. In other words, you can convert USD to USDT or vice versa, via external exchanges or wallets. Users need to pay fee for it.
Tether vs. Bitcoin
Unlike bitcoin, Tethers are supported by the reserve of fiat currency held by the Tether Limited. Bitcoin was designed to provide an alternate to traditional currencies to operate on 1-to-1 level outside the scope of financial institutions and national borders. On the other hand, Tether was founded with the aim of integrating the fiat currencies with blockchain technology by converting physical cash into digital asset.
Tether Price and future predictions
At the time of writing this article, Tether costs $1.00USD (-0.50%). If you want to get good returns with virtual currencies then USDT can prove to be a profitable investment for you. If you buy Tether today then you will surely get high returns in future.
Tether is designed on the basis of blockchain technology and provides most secure and tested blockchain and public ledger. They are based on one-to-one ratio and free from the market forces, liquidity constraints or pricing. Tethers have trustworthy Proof of Reserve implementation and are subjected to regular professional audits. They focus on making their integration with existing businesses in the cryptocurrency environment.