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Untethering Tether: Frequently asked questions about USDT

Untethering Tether: Frequently asked questions about USDT

Untethering Tether: Frequently asked questions about USDT

Mon Jun 15 2020 05:00:00 GMT+0000 (Coordinated Universal Time)

Digital assets are one of the most helpful and beneficial inventions in the modern world. Because of these decentralised assets, companies, financial institutions, and people are given efficient and cheap means to invest, purchase, and send cross-border transactions. Moreover, the presence of cryptocurrency is slowly revolutionising the traditional banking system with cost-effective, transparent, and sustainable means. 

However, despite the benefits of cryptocurrency, people are still hesitant to dip their feet in the crypto market because of the complicated technology that surrounds it. Additionally, some people find it difficult to understand how digital assets work. 

Digital currencies are also affected by the changes in the economy. Since they are not handled by any government authority or banks, cryptocurrencies are easily affected by market fluctuations. Because of the quick changes in the crypto economy, people are ambivalent about investing in digital assets. 

The crypto sphere experienced its biggest market crash in 2018. Due to this event, many investments and businesses suffered big losses. This huge plunge was caused by the uncertainty towards cryptocurrency, low liquidity, and the young market.

Fortunately, cryptocurrency’s volatility can be stabilised with the use of stablecoins that are also digital assets. However, the only difference is that they are pegged after fiat currency, allowing them to have a more stable nature than regular altcoins. 

There are various stablecoins in the market. However, one stablecoin continues to top the charts in terms of reliability, stability, and availability. So, if you’re interested in investing in cryptocurrency and you want to know the best stablecoin you can use, read this USDT review. We’ll provide you with the frequently asked questions about Tether, the number one stablecoin in the market!

Meet Tether (USDT)

One of the most sought after and purchased stablecoins in the market right now is Tether. Also known as USDT, Tether was created to give more traction in cryptocurrency investments. Every Tether coin is pegged after $1, meaning there’s a 1:1 ratio in every Tether conversion you make. 

For example, if you convert your $10,000 into Tether, it will automatically be converted to 10,000 Tether coins. Once you’re ready to take out your investments, you can easily have them converted back to digital assets. 

With a market capitalisation of $4 million, Tether stands as the fourth largest stablecoin in the crypto market. What makes Tether appealing to investors and crypto enthusiasts is that it can cater to both fiat and digital assets alike.

Due to this hybrid nature, it offers more protection from the sudden fluctuations in the market. Additionally, crypto coins such as Ethereum and Bitcoin are linked to Tether, which makes it easier for them to be converted into USDT. 

Frequently asked questions 

Diving into the crypto world is no easy task. Especially if you’re a beginner in the trade; even seasoned crypto traders get confused with some of the concepts relating to digital assets. So, before entering the digital realm of investments, here are some of the frequently asked questions that can help you kick start your cryptocurrency portfolio. 

1. How does Tether work?

 Every transaction made with Tether has a 1:1 ratio. You can convert both dollars and cryptocurrency to Tether if you want to protect your investments from the sudden fluctuations in the market. 

Tether is built over blockchains of different cryptos such as Bitcoin, Ethereum, EOS, and Tron. This is possible through the Omni and Liquid Protocol. Through this elegant technology, tether coins can travel seamlessly to convert any cryptocurrency and fiat currency into ‘tethers’. 

All the transactions and the back-up fiat funds for Tether record can be on Tether’s official site. Initially, Tether was created to utilise the Bitcoin Network as its blockchain by using Omni Layer. Because of this, Tether’s transactions are stable, efficient, and secure. 

2. What fiat currencies does Tether use as back-up?

Tether supports various currencies such as USD, EUR, and Chinese Yuan. However, its initial fiat collateral is US dollars.

3. Where can I buy Tether?

Tether is available on many crypto exchange sites. You can purchase Tether from the following crypto exchanges and methods:

  • Bitmex - Bitmex is one of the most competitive cryptocurrency exchanges offering Tether. This exchange is managed by skilled and experienced crypto experts, developers, and economists. Right now, Bitmex trades various digital assets such as Bitcoin, Bitcoin Cash, Litecoin, Ripple, and USDT. 
  • Bank transfer - After crypto exchange sites, you can also purchase Tether using bank transfer. You can use SWIFT or SEPA if you want your funds exchanged for Tether. Moreover, this will be much more convenient since you can apply using any bank you prefer.

  • Coinmama - Coinmama is another exchange site where you can purchase Tether coins. Moreover, you can select from different types of cryptocurrencies since they offer a wide variety of coins that you can invest in.

  • Stormgain - StormGain is another reliable crypto exchange especially if you’re a margin trader. Moreover, it has a low commission rate of 0.08% which gives you more advantage if you want to save more. Additionally, you can purchase major cryptos such as Bitcoin, Litecoin, and Etherum. 

4. How does Tether protect my funds from the volatility of cryptocurrency?

 Since Tether is ‘tethered’ to fiat currency, every crypto asset you convert into Tether is backed up with real-world money. Moreover, since they are modelled after real money, they are not easily affected by sudden changes in the crypto market. 

5. Is Tether safe/ Is Tether legit?

Since Tether also functions within the blockchain, you can expect that every node within the network is protected by strong cryptographic codes. Moreover, the blockchain technology used by Tether is layered with the Omni Platform, making it even more secure from different types of breaches. However, if you want to add extra protection to your Tether funds, you have to take care of your wallet address to avoid hackers and phishers from accessing your account. 

6. Where can I use my Tether?

You can use Tether for protecting your investments. Moreover, if you’re currently investing in different types of crypto coins, you can convert them into Tether to protect them from the price drop in the market. 

7. How transparent is Tether?

All Tether coins are backed up by real-currency reserves. You can see the Tether record when you visit Tether’s official website. They keep a record of their fiat currency assets to inform users of the current value of their reserve. 

8. What are Tether’s country restrictions?

Unfortunately, despite Tether’s attempts to make itself available worldwide, there are still countries where you cannot purchase Tether coins. These restrictions include economic regulations and government-mandated laws. 

Here are the following countries that don’t accept Tether: Cuba, Democratic People’s Republic, Republic of Korea (North Korea), Iran, Pakistan, Syria, Government of Venezuela, and Crimea. Before you purchase Tether, it's best to check on their site if they cater to your region. This is to ensure that you can maximise your Tether coins. 

9. Where can I store my Tether funds?

There are various wallets that you can use for your Tether coins. Depending on your preference, you can opt for software, cold wallet, or web wallet. If you’re looking for the perfect wallet to store your Tether funds, you can use the following: 

  • OmniWallet - Omniwallet is one of the most popular and secure wallets that you can use for your Tether funds. Because of its complex algorithm, this wallet ensures that no hacker can breach your account. Moreover, you can connect this wallet to Chrome extension, making it accessible anytime. 
  • Tether Wallet - Tether features its own wallet that you can use. You can access the wallet on the Tether site itself. However, it’s more advisable if your wallet is not on the web for more security.
  • Ledger Nano - Ledger Nano is one of the safest Tether wallets you can invest in. If you want to give your funds extra protection, this wallet is the perfect option for you. Additionally, since this wallet is not connected to the internet, you don’t have to worry about your funds getting hacked.

10. Can you invest in cryptocurrency without using Tether?

Yes. However, since cryptocurrencies are highly volatile, you can expect your funds to experience certain fluctuations. Using Tether will help give more stability to your crypto funds. 

11. Is Tether a good investment?

Yes. Using Tether is good if you want to do big investments. Moreover, you can preserve your assets’ value if you convert them into Tether. This will give you a good chance to sell for a higher price when the time comes. 

12. Are there other stablecoins in the market?

Yes. There are other stablecoins that you can use such as TrueUSD, MakerDao, and Havven. If you want to look for different stablecoins you can visit various crypto exchange sites such as Stormgain, Coinmama, Bitfiniex, and Kraken. 

13. Can you trade Tether?

Yes. If you want to trade Tether, you can check crypto exchange sites where they accept Tether trading. However, you should check the market since the price of Tether can also change along with the market. 

14. Can I buy Tether from Tether’s site?

Other crypto exchange sites, you can also acquire Tether coins from Tether Limited. All you need to do is sign up and follow the instructions on their website. They can cater to any crypto wallet you are using.

15. Can I acquire Tether with cryptocurrency?

Upi can cash out your  Tether coins through crypto exchange sites such as Binanca, Kraken, and Bitfinex. If you want to trade using digital assets, the fastest coins that exchange Tether are Ethereum, Bitcoin, Litecoin, and Ripple. You may try other currencies as well. 

16. How much is Tether worth?

There are two types of transaction fees you have to pay with USDT. The first  is a trading fee when you purchase Tether coins. Then, you have to pay a second fee once you decide to sell your USDT coins. 

Additionally, there are also withdrawal fees that you have to pay when you send your Tether coins from wallet to wallet. The fee of each transaction differs depending on the wallet and crypto exchange site you are using. Moreover, these fees can also be affected by the current market price. 

17. Is Tether fully backed by USD?

No. Tether isn’t fully backed by US dollars. Only 74% of Tether’s assets are anchored by real-world currency. Despite this concern, many investors and crypto enthusiasts still use Tether because of its reliability and benefits. 

18. Is Tether used by a lot of people?

Yes. According to research conducted by Coinmetrics, Tether is one of the most used stablecoins in the market. Moreover, they also discovered that every year, Tether has a trading volume of at least 46 times per annum. Additionally, studies show that Tether has the most liquidity flow compared to most stablecoins. Currently, Ethereum has the most volume of USDT reading. 

19. How did Tether begin?

Tether was released by Tether Limited in October 2014. Before it was called Tether, USDT was initially called Realcoin. The founders of Tether were Bitcoin Foundation’s Brock Pierce, Craig Sellars, and Reeve Collins. 

20. How to mine Tether?

Mining Tether is the same as mining regular crypto assets. Tether companies generate a large amount of energy to yield Tether coins. Since the equipment used for mining Tether is an expensive hardware, the hours of mining depend on the power of the machine used. 

21. What’s the future of Tether?

Tether will continue to grow in the coming years. Since many people will want to invest in cryptocurrency, the demand for stablecoins will increase to safeguard their assets. Additionally, the sudden changes in the crypto market will compel investors to purchase stable coins to back-up their assets.

Tether Advantages

Tether has a lot of advantages that can benefit you if you want to grow your crypto assets. Additionally, you can add more protection to your investments when you back them up with USDT. Moreover, you can easily convert your funds back to crypto or fiat once you want to start using your funds. 

  • Security

 Tether is a very secure stablecoin that uses layers and layers of blockchain algorithms. Moreover, all of your transactions are protected even if you transact using different types of wallets. 

  • Reliable customer service 

Other than Tether’s reliable fiat currency, they also have a commendable customer service that their customers keep coming back to. Moreover, they provide careful guidelines that can help you navigate through your Tether experience. 

  • Fast transactions 

 Transactions using Tether are just as fast as other cryptocurrencies. Moreover, it just takes a few seconds to get finished. Additionally, even if you use Tether to convert different types of crypto and fiat currencies, you can easily have your transactions processed in a jiffy. 

  • Transparency 

 Tether keeps a record of all their transactions in a ledger that you can find on their website. Additionally, the amount of the back-up currencies that they have for their Tether coins are also available on their website. 

  • Read Tether Reviews

 Reading Tether cryptocurrency review is a good way to get a good grip in understanding the nature of Tether. Additionally, crypto experts and seasoned investors will provide you with good tips and advice on how to effectively use your Tether coins to grow your investments. 

Investing in cryptocurrency is a good way to grow your money. Just remember that before you dive right into the world of digital assets, make sure that you’re prepared and knowledgeable in the things you can encounter so you can avoid losses in the future. 

Words by: Rain Quintana

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Untethering Tether: Frequently asked questions about USDT