Tether (USDT) is no ordinary cryptocurrency. Tether is a very special cryptocurrency pegged to $1. Unlike most cryptocurrencies, Tether is not affected by market fluctuations, meaning the market drop will not affect Tether. Therefore, we can say that USDT is the most stable currency in the market.
Tether was first introduced as RealCoin in July 2014. Tether Ltd., which was then responsible for maintaining the reserve amounts of the fiat currency. It was renamed Tether in November. Subsequently, it began trading in February 2015.
Besides using the same blockchain as Bitcoin, Tether also uses the same algorithm as BTC (SHA-256) as its encryption algorithm. The separation in the Bitcoin blockchain is a special part of the Tether protocol called the Omni layer. This structure ensures that Tether (USDT) encryption is open source.
All chains are initially published on the Bitcoin blockchain over the Omni Layer protocol and spawn as a cryptocurrency. Each Tether issued is rate one-to-one with the corresponding fiat currency held in a warehouse by Hong Kong-based “Tether Limited”. (1 Tether = $1 USD).
Crypto Compare data, also quoted by The Wall Street Journal, shows us that 80% of Bitcoin transactions are made through Tether. In this context, we can say that USDT is an important source of liquidity for the cryptocurrency industry.
Examining the Tether blockchain
The Tether network consists of three layers. The first layer Bitcoin blockchain and Tether transaction system is the Omni protocol. The second layer contains the Omni protocol itself. This technology helps you create and destroy a cryptocurrency, monitor circulation, report and store crypto in a secure environment.
The third tier is Tether Limited. The company is responsible for accepting users’ fiat currencies and issuing USDT in return. In addition, Tether Limited reserves the right to combine USDT with various exchanges, wallets and other projects without asking its users.
Why investors to use Tether (USDT)?
Tether is safer than other cryptocurrencies, which are more volatile and prone to unpredictable price movements. In addition, some users prefer the Tether network, which they think is faster and more practical, over their banking system for money transfers.
Also, some exchanges accept Tether USDT as a trading pair, allowing their users to exchange a US dollar pegged token with other cryptocurrencies. Given the high volatility rates in Bitcoin, this can come in very handy.
Visits: 52
