Discover the advantages offered by Tether. Tether was the first stable cryptocurrency and these days it’s the one with the highest volume of negotiation and liquidity. Learn all of its features, here
Cryptocurrencies still don’t have a more massive use because of their biggest weakness: the volatility of their value. In this scenario, stable cryptocurrencies have been positioned as an effective solution for using the best of the blockchain technology, without our worrying about the constant fluctuations in price. Among all of the stable cryptocurrencies, the most renowned and used these days is Tether (USDT).
What is Tether?
Tether is a stable cryptocurrency. This means that it’s a type of cryptocurrency that maintains a fixed value, linked to a fiat currency, in this case, the American dollar. Whereas Bitcoin and Ethereum change their exchange rate every minute, 1 USDT will always be1 dollar.
The USDT is, currently, the fourth cryptocurrency in capitalization, with 74 billion dollars. It’s exceeded only by Bitcoin, Ethereum, and Binance Coin. Further, USDT is the first in volume of transactions, ahead of Bitcoin.
This stable cryptocurrency is very attractive for merchants. At present, it’s also used a lot in sending remittances in emerging markets. Traditional means for sending money, like western Union, are slow and expensive, whereas transfers with USDT are immediate and fees are much lower.
In many developing countries, where their national currencies are undoing heavy devaluation processes, more and more people are turning to USDT as a secure way of protecting their savings.
Experts reassure us that the USDT is not a replacement for Bitcoin, but a complement. In the future, they say, stable cryptocurrencies could function better and faster than credit card payments in the electronics industry.
At present, various exchanges like Bitpay, Coinbase commerce and Bitfinex Pay already accept USDT for paying for goods and services. Further, other platforms, like Cash App and Venmo, permit payments with this stable cryptocurrency.
Advantages and disadvantages of Tether
The USDT has the same value as the traditional dollar; however, it offers many more advantages. The first is times for transactions. Whereas through the traditional banking system, a transaction can take between 1 and 4 days for completion, on the blockchain with USDT it takes mere minutes. At any hour and day of the week.
The second advantage is the transfer fees. In the bank system, SWIFT transfers can easily cost more than 30 dollars., whereas the USDT doesn’t charge any tariff when making transfers between USDT wallets.
The USDT also has a few disadvantages. Doubts still persist about whether the Tether company maintains a ratio of 1 to 1 between its bank reserves and the existing USDT tokens. Plus, since it’s a cryptocurrency controlled by a company, it’s not decentralized.
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