Tether is a cryptocurrency token issued by Tether Limited. The Tether (USDT) rate is tied to the US dollar and does not experience as much fluctuation as the rates of other cryptocurrencies. Tether was originally released on the Omni Layer platform, which is an add-on to the Bitcoin blockchain. Cryptocurrency Tether is one of the most interesting financial instruments in the cryptocurrency industry. The main global idea of Tether: bypassing restrictions on the part of the banking system in the process of interacting with cryptocurrency. Thus, Tether developers decided to fulfill all the requirements of financial regulators who do not perceive digital assets as traditional. And the main problem is the too high volatility of other cryptocurrencies. In order to take profits or simply go into a stable currency, we had to conduct exchanges for fiat. In order to eliminate this complexity, Tether was developed and pegged to the US dollar. Due to this, you can fix in the USDT token without fear of high volatility.
USDT is the fiat equivalent that interacts with cryptocurrency. Tether also took care of the euro lovers by issuing the EURT token.
Short story
Tether was created in October 2014 with the explicit goal of destroying the inherited financial system. This is achieved by providing customers with the opportunity to complete transactions with traditional currencies through the blockchain, without the volatility or complexity usually associated with digital currency.
Soon, rumors appeared in the cryptocurrency community that this company was associated with the Bitfinex crypto exchange, which was the first to integrate this token into its service. In the same year, Tether cryptocurrencies integrated the Poloniex American cryptocurrency exchange into its service. Soon, cryptocurrency appeared on all trading platforms.
The entire Tether network is built on three levels. The first is the bitcoin blockchain and the Tether transaction system, which is integrated into it using the Omni protocol. At the second level is the Omni protocol itself. This technology allows you to create and destroy cryptocurrency, track its movements, as well as conduct transactions. The third level is directly Tether Limited. He is responsible for accepting fiat currencies from users and issuing cryptocurrencies in their place, maintaining reserves, and also for public reports. Moreover, Tether Limited makes decisions and integrates cryptocurrency into various exchanges, wallets, other projects, etc.
Each issued USDT token goes through 5 stages of development. First, the crypto user deposits in fiat to the Tether bank account. Under this deposit, the service issues cryptocurrency in a ratio of 1: 1. That is, for every real dollar, the platform issues one USDT token
Further, the user receives cryptocurrency and uses it at his discretion: stores it in his wallet, exchanges it on exchanges, etc. When tether is withdrawn to fiat, the crypto service destroys the token and pays the client money. An important role in this entire process is played by the Proof of Reserves concept. Within its framework, Tether confirms to users that all cryptocurrency in circulation is provided with real money. For this, the crypto service publishes daily data on the bank account in which fiat money is stored. At the same time, the data on transactions in the blockchain is completely transparent and anyone can get acquainted with them.
Following the widespread success of the Bitcoin based Omni Layer Bitcoin-based USDTether, Tether is now collaborating with Ethfinex. Tether based on Ethereum (ETH) and ERC20 compliant. The new tokens are in no way associated with the current USDT issued on the Omni Layer protocol and serve as an addition.
At the same time, USDT is also pegged to the dollar and there are no changes, except that now stablecoin can be used on the Ethereum network. If the OMNI standard token works with the bitcoin system, the transaction fee is taken in Satoshi and it is necessary to wait for confirmation on the network to transfer funds, which can be very time-consuming, then the Ethereum standard token moves on the network much faster, which is very convenient for those who running at speed. The commission compared to OMNI is much lower and is taken in ETH. On trading platforms, withdrawal fees are withdrawn in USDT units (each platform may have different amounts)
The developer of the Tron blockchain protocol and the issuer of stablecoins Tether announced the start of cooperation, within the framework of which the Tron USDT token was launched.
The token will be able to carry out the processes of issuing, storing and transmitting under a smart contract on TRON, with a completely free and transparent process, zero commission for transfers and instant delivery; he will also be able to write highly expandable programs based on a smart contract. TRC20-based USDT provides interoperability with TRON-based protocols and Decentralized Applications (DApps). Trading platforms set their withdrawal fees.
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