The volatility of some first-generation cryptocurrencies amazes all traders, both experienced and newbies. This is the main reason why shortly after the release of Bitcoin and other leaders, the idea of creating stable coins that would provide good profitability and have low volatility arose. This is how the Tether (USDT) cryptocurrency was born.
Tether is a token (referred to as USDT) issued by Tether Limited, a company registered in Hong Kong in 2014. And it, in turn, is owned by the same people who rule the Bitfinex crypto exchange (that is notorious primarily for the fact that in 2016 it was scammed and stolen 120 thousand bitcoins which at the current rate would be equal to about $5 billion). However, if clients already own USDT, then they shouldn`t panic and change tether to lto because of the fear of theft — over time, asset protection algorithms have changed dramatically and now such a scam is simply impossible.
The token rate is backed by the US dollar, and the daily volume of transactions in this currency is at least $1.5 billion. Customers can buy this coin on almost any cryptocurrency exchange, and they need a reliable hot or cold wallet to store tokens.
Pros and Cons
The main advantages of this stable coin:
- a stable exchange rate due to the binding of each token to the US dollar;
- transparency of financial transactions;
- fairly low fees for processing all transactions;
- prevalence and popularity that encourage developers to develop the whole system;
- availability of a reserve fund.
However, it is worth being aware of certain disadvantages, which include the incomplete anonymity of users and the impossibility of mining. Also, some experts talk about problems with the scalability of the cryptonet.
What are Tether`s Prospects?
This token can be safely called one of the most popular stable coins — the demand gave impetus to the formation of its own market, where fiat money and cryptocurrency assets combined. These factors make it possible to predict that this token has quite good prospects.
However, customers should carefully follow the news, as in recent months information has constantly popped up that the creators of the coin are sinning by withdrawing reserve funds to offshore accounts. If these assumptions are confirmed, then most exchanges using Tether in their operations may suffer significantly, as well as the owners of this cryptocurrency.