Easy Tether (USDT) Guide 2024: What & How USDT Works? Where to Buy?
What Is Tether (USDT)?
Tether USDT is a stable cryptocurrency pegged to different fiat currencies. In the case of Tether USDT, it is pegged to the U.S. Dollar. iFinex, a Hong Kong registered company owns Tether and also the crypto exchange BitFinex.
In July 2014, Tether was launched as RealCoin. But in November of the same year, it was rebranded as Tether. Tether USDT is based on the Bitcoin blockchain and supports Bitcoin’s Omni and Liquid protocols along with Ethereum, TRON, EOS, Algorand, Solana, and Bitcoin Cash (SLP) blockchains.
As of January 2024, Tether USDT is the third-most cryptocurrency after Bitcoin (BTC) and Ethereum (ETH). It is the largest stablecoin with more than $90 billion market capitalization!
What Is A Stablecoin?
A stablecoin is a cryptocurrency that maintains a steady valuation with low volatility. It does so due to its pegging with gold and real-world currency aka fiat currency, for example, US Dollar, Euro, and Indian Rupee.
Centralized companies issue stablecoins to maintain the peg by using collateral or algorithms to manipulate stablecoins supply, depending on the demand.
Currently, Tether is the largest stablecoin with approximately 53% of the total stablecoin market capitalization. The second and third-largest stablecoins are USD Coin (USDC) and Binance USD (BUSD) respectively.
How Does Tether (USDT) Work?
Tether’s stability comes from its currency reserves because the company that owns Tether claims to hold assets and currencies like the US dollar equal to or greater than the total USDT in circulation. In simple words, for every Tether token in circulation, the company owns one dollar in its reserves.
Most major crypto exchanges list Tether USDT. As an investor, when you buy $100 in Tether USDT, you will receive 100 USDT tokens. Likewise, the company would boost its reserves by $100 to maintain a 1-to-1 dollar peg. As soon as you redeem the tokens for fiat currency, Tether tokens are destroyed and removed from circulation.
What Makes Tether (USDT) Unique?
Since its inception in 2014, Tether has been accepted for its legitimacy, though often challenged. It is widely accepted by investors, vendors, crypto exchanges, and protocols within the blockchain space as a means of exchange and a payment method.
Like other cryptocurrency tokens on the blockchain network, Tether enjoys the same luxuries of peer-to-peer trading and proof-of-work or proof-of-stake security. But Tether isn’t volatile like other cryptocurrencies, thanks to its large physical reserve as gold and fiat currencies.
How Many Tether (USDT) Coins Are in Circulation?
As of January 2024, there are a total of 94.9 billion Tether USDT in circulation. This circulation number of tokens might increase or decrease based on demand and market liquidity.
You can easily purchase Tether USDT tokens through cryptocurrency exchanges.
How to Use Tether USDT?
As discussed, Tether is a stablecoin and most major cryptocurrency exchanges list it. You can buy Tether USDT from popular cryptocurrency exchanges like Coinbase, crypto.com, Kraken, etc.
You can use Tether USDT in exchange for goods from vendors or in exchange for a different currency. You can buy USDDT to lend, purchase NFTs, and participate in ICOs. Tether is a flexible stablecoin with versatility and can be used almost anywhere to transfer and transact value.
How Is Tether (USDT) Secured?
Tether USDT is issued on multiple blockchain cryptocurrency networks: Bitcoin, Ethereum, EOS, Tron, Algorand, and OMG Network. All these blockchain networks host smart contracts and tokens. The base of the security is handled by nodes and miners to keep the blockchain network secure using Proof-of-Work or Proof-of-Stake.
All these platforms regularly conduct audits to keep the code up-to-date, secure, and compliant. In the same way, Tether also ensures the USDT token remains compliant with each of the networks to provide greater security.
Where Can I Buy Tether?
As discussed above, you can buy Tether USDT from most major cryptocurrency exchanges. Here’s a list of the 5 best USDT cryptocurrency exchanges:
Binance: Binance is a popular and one of the largest crypto exchange platforms. It offers a user-friendly interface, high liquidity, competitive trading fees, and a wide range of trading pairs.
Kraken: Kraken is a well-established cryptocurrency exchange with strong security, a transparent fee structure, and a user-friendly interface. It offers a wide range of trading pairs, including USDT pairs.
Bitpanda: Bitpanda is a European digital asset brokerage based in Vienna, Austria. It was founded in 2014 and offers features like automatic purchase to precious metal trading.
KuCoin: KuCoin is known for being the global crypto exchange with features like extensive trading pair selection and trading features. It offers a secure and user-friendly trading platform.
Huobi Global: Huobi Global is another well-known cryptocurrency exchange with secure and intuitive trading platform. It offers trading pairs and advanced features like margin trading and future contracts.
It’s easy to pair your Tether holdings with other cryptocurrencies. Most of the centralized and decentralized exchanges allow to pairing of USDT with other cryptocurrencies.
Through the cryptocurrency exchanges mentioned above, you can easily convert Tether USDT into Bitcoin (BTC), Ethereum (ETH), or any crypto you want.
How to Buy Tether?
If you think that purchasing and holding Tether USDT fulfills your financial goals, then you can buy USDT in only five steps.
Before you buy USDT, the first step is to research the best cryptocurrency exchange. A cryptocurrency exchange allows you to buy and sell cryptocurrency instantly.
Create an Account
Suppose you have chosen the crypto exchange, then the next step is to create an account with the platform. So, upload your personal and financial documents into the platform to verify them and create an account.
Transfer Fiat Currency into the Crypto Exchange Account
The next step for you is to add fiat currency to the account. You have to use the deposited funds to buy Tether.
Buy Tether USDT
Now, you can log into the crypto exchange account and place the trade to purchase USDT. And now, you’re the proud owner of Tether USDT. But there remains one step to secure your investment.
Store Your Tether
After purchasing Tether USDT, you can access and view your investment in a digital wallet. There are several types of crypto wallets to store your USDT:
Hardware Wallets: If you want to secure your Tether USDT by storing them offline, then you can use a hardware wallet. Some top hardware wallets are Ledger Nano X, Trezor Model T, etc.
Software Wallets: If you want to store your USDT online way, you can download software for your desktop and mobile. For example, Exodus is one of the top mobile wallets to store your USDT.
Crypto Exchanges: The easiest one is the crypto exchange itself. All the major exchanges offer built-in wallets for their customers. Binance and Kraken are two of the crypto exchanges with built-in hot wallets.
The Bottom Line
Tether USDT plays a crucial role in the decentralized finance sector. As a medium of exchange, stability, and wide acceptance, USDT is used in DeFi protocols for lending, borrowing, and earning interest. It’s also a cost-effective way to send money across borders. With its multifaceted uses, continuous popularity, and high trading volume, Tether USDT has established itself as a significant stablecoin.
Easy Tether (USDT) Guide 2024: What & How USDT Works? Where to Buy?