Tether is a stable coin (a kind of cryptocurrency) that actively operates to maintain stable valuation via market techniques. It’s the biggest in the stablecoin market, with 64% of the total $130.2 billion stablecoin market capitalization. The second largest stablecoin supply (USDC) is almost three times less than USDT. Tether is used by investors looking to hedge against the intrinsic volatility of their crypto investments while maintaining value in the crypto market. This post discusses more about how Tether (USDT) works.
How does USDT work?
Since Tether’s cryptos belong to the stablecoin digital asset subset, their prices are pegged or anchored to an asset that’s less volatile. Stablecoins are a critical link between cryptocurrencies and the real world. With their costs attached to stable assets like fiat currencies, stablecoins like tether promise to protect cryptocurrency holders from volatility. These coins are suitable for trades and transactions between and on blockchains.
Tether tokens are fixed to a fiat currency at a ratio of 1:1. This means if you want to convert USDT to USD, your rate will be one tether coin for one U.S. dollar. For instance, if you have 500 tether USDTs, converting them to cash will earn you $500. Once a user redeems their tether coins for fiat money, they are destroyed and taken out of circulation. This matches demand and supply to ascertain that every tether coin stays attached to the American dollar, providing investors and traders with a safe, stable option to store value.
How to mine Tether
Tether can’t be mined because its coins are attached to the USD’s value, meaning mining them would be against this cryptocurrency’s purpose, avoiding the cryptocurrency volatility challenge. However, there are means through which one can earn free Tether, including:
- Play games: Gaming lovers can play blockchain-based games like Bitsler that award gamers with crypto to earn free tether tokens. Through play-to-earn games, users can gather USDT by completing tasks and participating in in-game activities
- Respond to paid surveys: Taking part in online surveys is among the quickest ways to get free tether tokens. Some apps and sites offer cryptocurrency rewards to market research participants. Users can use their feedback/ opinions to earn rewards in the form of USDT
- Watch videos: Some websites usually award users with cryptos, including USDT, to watch educational or entertainment videos
What USDT holders can do with their tokens
Since USDT is supported by dollars and gold, it has multiple benefits that make it unique. Its outstanding features include:
- Minimal commissions
- Rapid transactions
- Reliable support
- Stability
USDT holders can use their tokens to conveniently pay for bills, services, and purchases. In addition, Tether’s extensive adoption of renowned businesses internationally makes it a chosen currency. Also, users can convert their USDT into other different stable currencies.
How Tether is secured
At the moment, USDT coins can be provided on multiple blockchains, including:
- Ethereum
- Bitcoin
- OMG network
- Tron
Considering that tether coins and smart contracts are held on these cryptocurrency networks, base security is dealt with by the miners and nodes responsible for securing the networks using Proof-of-Stake or Proof-of-Work. These platforms perform frequent audits to ascertain updated and secure code compliant with the existing framework. Additionally, Tether verifies that USDT complies with every network.
Endnote
Tether is a stablecoin that enables crypto investors to avoid cryptocurrency volatility. Before buying a tether, learn what it is and how it works to decide if it’s a worthy investment.
Filed Under: Guides
Latest Geeky Gadgets Deals
Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. Learn about our Disclosure Policy.
Credit: Source link