✔️ Information reviewed and updated in February 2024 by Pedro Martínez González
While cryptocurrencies like Tether have a large number of elements to classify them as a great innovation and advancement of technology. We can also find some weak points in them, such as low scalability. Although of all, volatility is perhaps the weakest side of digital currencies.
And it is that one day we can see a cryptocurrency trading over 10 dollars and suddenly, it already fell to 2, for example, and then it rose again to 30. That is why today we will tell you about Tether, the one that promises be the most stable cryptocurrency on the market.
▶ What is Tether?
Tether is a cryptocurrency that was created with the aim of making transactions between cryptocurrencies easier and reducing their volatility. To do this, it uses as a strategy the creation of a 1 to 1 parity with the dollar.
Through the use of Blockchain technology, it is possible to make Tether work for transactions and payments. It is not necessary to exchange USDT to another virtual currency, as this currency allows direct exchange for fiat money.
In this way, it could be said that a Tether will be equal to a dollar or any other fiat money pair. Thus, the process of exchanging dollars for virtual currencies will be much simpler, acting as just another conventional currency, with its own exchange rate.. In addition, this coin is expected to have great support in terms of pairs.
Ultimately, Tether is expected to be one of the most efficient ways to end currency instability. Having a one-to-one parity will not only reduce volatility, it also gives users certainty and security.
▶ Differences between Tether and Bitcoin
- Stability: By having the support of real or fiat money, the currency gains much greater stability, since it does not depend on codes and the work of users. Thus, the volatility that currencies such as Bitcoin, for example, can have is avoided.
- Pairs: Another point that you should take into account is that Tether has pairs of all kinds, for example, dollars or euros. In the same way, it works like a currency in the exchange market, being subject to market prices.. In the case of Bitcoin, this does not happen, since it does not have a parity with real currencies.
- Blockchain: Tether, like most cryptocurrencies, is based on Blockchain technology. In this case we find that the blockchain used is not our own but is part of the Litecoin blockchain which uses the latest and fastest technology.
- Transaction speed: Thanks to the incorporation of the Litecoin Blockchain in Tether, the speed of transactions improves significantly. This means that the capacity of the network to process operations becomes greater by moving more transactions in much less time.
- Commissions: Regarding operations between cryptocurrencies or in your Wallet, Tether does not charge commissions for it as Bitcoin does.. Where we can find costs, although these are low, is in the exchange of cryptocurrencies to fiat money. This makes USDT much cheaper to use than other currencies.
- Transparency: For many, this is one of the most critical differences when it comes to Tether's operation. And it is that, compared to many cryptocurrencies, Tether provides clear month-to-month information about your balance sheet. Although it is still necessary to reveal information such as the money reserves for its parity.
- More Token than cryptocurrency: Finally, you should know that Tether is not really a cryptocurrency at all. This is due to the fact that it operates more as a kind of exchange vehicle in transactions, which is why many consider it a Token.
▶ Technology as support
To work, Tether was born under the Bitcoin Blockchain which allowed it to grow until it reached a point where it required greater capacity by moving to the Litecoin Blockchain. This change allowed him to revolutionize the speed of his transactions by increasing his capacity.
The connection to the Blockchain is very important, since it allows making operations, changes, transactions and more. To connect, Tether uses open source software known as Omni. This protocol is responsible for linking Tether users to the Litecoin blockchain.
Tether tokens operate through a kind of holders or digital assets, since they store real money values. After a hack that this virtual currency suffered, some algorithm and Scrypt change that used Litecoin were introduced. It was also decided to use a Hardfork to temporarily fix this problem.
▶ How can I get my own Tethers?
If you want to obtain Tether coins, you should know that the only option is to buy them, since by the nature of these coins it is not possible to mine them. And it is that, by not storing value as such, you cannot receive them for mining or performing any task.
Being relatively popular and for its value as a bargaining chip, You can find Tether in many exchange houses or exchanges, even in the most popular ones in the world. This makes obtaining these virtual currencies much easier, you just go, buy them and that's it. Also, they are available in many pairs.
▶ Is it worth it?
While the information about money and how Tether is backed with real currencies is not that clear yet, this coin seems to have some popularity in the market.. It is hoped that this will put an end to currency volatility.
In addition, its performance as a currency of exchange is very efficient so it is likely that it will soon gain much greater relevance in global markets and in local markets. In this way, Tether could become a relevant cryptocurrency in the market due to its 1 to 1 parity with fiat money.