THE CLEAR INTRODUCTION TO THE FIRST STABLE COIN (USDT) IN CRYPTOCURRENCY
You have probably heard of bitcoin and other cryptocurrency assets. You have been informed from different angles about the controversies surrounding digital trading, the gains, the loss, and the inevitable risk people encounter constantly in Nigeria.
Wherever you are today in Nigeria, you have probably heard different stories (false or not) from traders about their happy days and sad days. Maybe you have been reshaping your interest and decision about going into crypto-currencies according to your crypto information sources ( friends, family, relative colleague…). You are confused about your personal needs. Should you learn now and make money later or leave the field for risk-takers?
The urge to Nigerians have to make money has led too many of us to indulge our savings in trading without acquiring critical and significant information put in place to guide and alert them. Trading in bitcoin, Ethereum, USDT is not just about risk-taking. Most gamble with the solid thought that they are trading. If they are lucky to make money, then they are experts. If not, trading is bad. When you gamble, be aware that the deal is 50/50. It’s either you lose or gain. Most Traders never want to believe this in Nigeria.
There has been serious volatility in bitcoin and other crypto assets in the past years but Tether (USDT) was discovered by Brock Pierce, a crypto investor, and his colleagues (Craig Sellars and Reeve Collins) to reduce the market volatility and create motives for users to have control over their finance.
WHAT IS USDT AND HOW IS IT DIFFERENT FROM OTHER CRYPTO ASSETS?
USDT (Tether) market value disclosed that USDT remains the fourth biggest crypto-currency asset and the first stable coin in the world. Like other stable coins, it’s essential for crypto trading as it permits a trader to avoid market volatility which may affect their trading experience negatively.
Tether was designed to hold the same value as $1 US. Although it has experienced a rise in volumes on different Blockchain over the past few years but informed people stable their claim that it’s reliable to manage loss compared to other crypto assets. Stable coins reflect the value of fiat currencies as they remove extra cost and time delays in conversion.
Tether is often ranked as the coin with the highest daily trade volume-the trading rate surpasses bitcoin sometimes. USDT was originally introduced under bitcoin through Omni-Layer but it has been migrated to other Blockchains such as Algorand, Solana, EOS, TRON…
Cryptocurrency is often classified as a volatile game and Tether’s main objective is to minimize the volatility rate and other hidden challenges traders face. In Nigeria, some traders are yet to figure out how it differs from other assets. Others are being careful and avoiding their first shocking mistake. Most of them jumped into the bitcoin business with little or shaky understanding of how it works, hence, their tremendous loss. They wouldn’t like to repeat the same mistake.
USDT has as well experienced unexpected controversies just like many other crypto assets. It once reached $1.2 at some time but since 2019, the rate has been stable with the help of high trading volume and crypto market development.
Some curious investors and traders are worried tethers owners lack enough dollar reserve to prove its dollar peg. According to one study, tether was created to sustain the key price decline in bitcoin in 2017. Many keep suspecting that USDT might be a crypto tool put in place to alter the unstable prices of bitcoin.
Sometimes around May 2021, tether (USDT) revealed the report of its stable coin. Only 2.9% of the whole was in cash while the remaining large fraction was classified as an unsecured, short-term debt (some kind of commercial paper). Tether was then compared to several traditional money market funds and was regarded as one of the 10 biggest commercial paper holders in the world according to JP Morgan Chase and Co (A financial money holder that deals in investment banking, financial services, and asset management). JP Morgan analysts added that loss of confidence in tether can lead to “severe liquidity shock to the broader cryptocurrency market.” There should be objective prevention of sizeable tether’s withdrawal as the outcome to this may affect valuable assets that are beyond crypto.
HOW TETHER (USDT) WORKS AND WHY IT IS IMPORTANT?
The appeal of the tether is based upon its pegging to fiat currencies and unlike other crypto assets, USDT strength lies upon its relative stability. Tether was designed to match one-to-one with a single USD. Every USDT in circulation each equals $1. Apart from this fact, Tethers is flexible enough to hold other valuable assets, real-world cash as collateral. Tether’s token move across the Blockchain like other crypto assets offers stability and simplicity of fiat currencies and is tethered to other real-world currencies on a one-to-one rule. This transaction proposes low price volatility to users.
WHY IS TETHER (USDT) IMPORTANT?
Tether regulates the relation between crypto and fiat currencies, It presents a platform whereby traders utilize the one-to-one trading means with USD, preventing the volatility of other currencies. Tether also involves risk-taking and has controversies surrounding it; nevertheless, the transaction stability offers ease of trading with other coins, disrupted the traditional financial system, and permits investors to own digital assets similar to fiat currency.
Some of the key features of tether that attract investors are:
- Stability as USD is still considered stable.
- 1 to 1 rule (USD to tether)
- Possess multiple use cases compared to traditional
- Can be operated on different Blockchains.
Check out the 5 steps in tether token’s lifecycle:
- A KYC will verify a tether user; could be an individual trader, business merchant, or a trading firm. They will deposit fiat currency into their tether’s bank account.
- Tether issues tether token to the wallet address supplied by the user. These tokens will be equal to the exact amount of money deposited by the user (1 to 1 basis).
- The user then uses the tether token to carry out a transaction. It can be used, transferred, or kept for future use.
- A user can redeem a tether token back to fiat currency by transferring it to their bank account at tether.to
- Tether removes the tokens from circulation and sends the same amount of fiat currency to the user’s account.
As an investor, be open to new ways, tools, and platforms for trading. Discover how tether can influence your trading experience and generate more profit for your investing business. But acquire enough knowledge about how these crypto-assets work before jumping unprepared.