What is Tether?09 Dec, 2019 David Kemp
Bitfinex cryptocurrency exchange released Tether in 2015. The coin was designed to make possible purchasing cryptocurrencies for fiat money and this way solving the existing issue. Almost immediately USDT was introduced on the cryptographic exchange Poloniex.
Tether cryptocurrency is based on blockchain. Since its value is pegged to the US dollar, Tether can be considered as a hybrid of digital and fiat money. The cryptocurrency dollar is based on the Omni platform. It is used for digital assets. The direct exchange of dollar to USDT can be done with the help of Kraken exchange. The article "Kraken Bitcoin Exchange Review" will guide you through this exchange and make you know all the ins and outs of it.
One of the major problems is the centralization increase. This issue is a result of a tight pegging to US dollar. Therefore, if the exchange is facing fiat shortage, selling USDT would not be possible. The only way of solving this issue would be Tether, by transferring the required amount of dollars to the platform.
Advantages and disadvantages of Tether
The cryptographic currency has many advantages. Such as there is no need for making complex calculations when performing buy-sell transactions of the coins using Tether. Trading on the exchange without the digital dollar can be performed in the following way: at the very beginning the trader needs to find the best applicable currency pair. The most commonly used one is Bitcoin or Ethereum. Firstly he needs to determine the amount of these coins required for buying preferred coins. Afterwards, perform the exchange and purchase them. Such transactions with using digital dollar are running regularly without any peculiarities.
Advantages of Tether:
- Security. Cryptocurrency has received a modern security system that provides high reliability. User information is hidden. Although the coin is pegged to the US dollar, it is digital, being based on blockchain.
- Transaction fees. Banks are taking commissions for transferring classic dollars. Sending Tether is free of any hidden additional charges.
- Transaction speed. Transferring big amounts of digital money may take hours or even days. Though, when it comes to Tether, the other side can receive it within a minute.
- Stability. A tight peg to the US dollar successfully solves the cryptocurrencies high volatility problem. That is why many investors move to Tether when the digital asset market collapses.
When discussing Tether’s weaknesses, the only thing coming to mind is the possible centralization growth. The tight peg to dollar increases such risks, even though the developers assure this will never happen.
Tether’s release has provoked the cryptocurrency exchanges development and made digital money more convenient to buy and sell. Many investors took advantage from opportunities offered by USDT. If you are planning to buy cryptocurrency on exchange that is not working with fiat money, you should definitely take Tether into consideration. This digital dollar significantly simplifies the process and lets you save on fees and commissions.
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