What is Tether?
A Beginner´s Guide to Buying, Selling, Using, and Mining Tether:
An In-Depth Tether Guide by True Poker
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With the dawn of cryptocurrencies, there has been a lot of discussion about the nature of currency itself. Should it be nationalized? Should it be backed by a central bank or government? What about a gold standard? These are all questions that have been brought to the forefront of discussions around the globe as the features of cryptocurrencies are compared with the benefits of fiat currencies. In the midst of this discussion, one cryptocurrency, Tether (USDT) is seeking to combine the best of both worlds.
What is Tether?
Tether is a cryptocurrency that combines the features of blockchain technology with the benefits of fiat currencies. The platform is based on Litecoin’s (LTC) blockchain which provides high levels of security and transparency. Blockchain is the ledger that records all of the transactions. Once a transaction is validated and approved, it’s entered into the chain as a block. Once it’s entered as a block, it’s unalterable yet completely transparent. These are some of the defining characteristics that make cryptocurrencies unique and highly successful.
Tether also has features that traditionally accompany only a fiat currency. It’s 100% backed by their reserve system, meaning that however many tether are currently in the market, the same amount is held in their reserves. Also, every tether is always backed by traditional currency at a 1-to-1 rate. This means that 1 USD will always equal 1 USDT. This feature of Tether is very unique among cryptocurrencies, and it’s actually where Tether derives its name from. Tether turns cash into digital currency, which anchors or “tethers” the price of USDT to a specific national currency. Reddit and other sites can be helpful when trying to discover the definition of Tether.
How Do I Buy Tether?
Tether is an easy cryptocurrency to buy. You can buy Tether directly within the Tether app. This is the easiest and cheapest method once you have your account with Tether set up. Tether can also be purchased through their exchange partners, Bitfinex and Kraken. Those sites allow you to trade for USDT with Bitcoin. Bitcoin can be purchased at Coinbase or at a Bitcoin ATM with cash or with credit card.
How Do I Turn Tether Into Cash?
When you’re ready to sell your USDT, it’s just as easy to convert back to USD as it was to purchase the USDT to begin with. Again, use Bitfinex or Kraken, this time to transfer your USDT back into Bitcoin or your chose cryptocurrency. Depending on the exchange site used, you might need to turn your newly purchased cryptocurrency into Bitcoin before finalizing your cashout. Lastly, visit a nearby ATM to withdraw your cash.
How To Use Tether?
Tether is designed to be the same way as any other cryptocurrency or fiat currency is used. It can be sent to others easy through their mobile app. Or you can use it to fund your crypto exchange accounts and wallets. You can also convert your own fiat cash into a digital currency, while still holding it as USD, EUR, or JPY. Tether can also be used by businesses looking to transact with a digital currency that maintains the same amount of stability as a fiat currency.
Tether’s token, USDT can also be used for investing. While the exchange rate will always be 1-to-1 into USD, the value of it compared to other cryptocurrencies like Bitcoin fluctuates over time. This allows holders of USDT to watch the price and buy or sell depending on exchange rate into other cryptocurrencies.
What Is Tether Mining?
Mining a cryptocurrency is where users participate in the process of validating transactions that take place on the blockchain. This is done by miners giving their unused computer space to the blockchain in order to help power the network. The blockchain then accesses the power of a GPU and works it like a calculator, crunching transaction keys until a block is successfully mined. In turn, mining creates more of the token for that cryptocurrency, putting more tokens in circulation.
Tether is unique because it is a stable-coin, always linked to a fiat currency. In the case of USDT, which is pegged to the United States dollar, it doesn’t need to be mined like other cryptocurrencies. This is because Tether is backed by a reserve system, ensuring that there will always be more USD in reserve than there are USDT in the market.
How To Mine Tether?
Because Tether is based on the Litecoin blockchain, miners can help mine Litecoin and in turn help with the overall profitability of Tether. Users can also help contribute to Tether by using it as a way to tokenize their USD. By sending it to others, they will be helping grow the market cap for the coin. However, Tether cannot be mined in the traditional sense.
How Will Tether Scale?
The more a coin grows in popularity, the more transactions per second it needs to be able to handle. This discussion is called scaling, and it’s extremely popular and necessary within the cryptocurrency world. For example, Visa can process tens of thousands transactions per second. Meanwhile, other popular coins can only process ten transactions per second. Because Tether is linked with a reserve account and the value is always 1-to-1 with the USD, scaling doesn’t have the same level of importance as it does with other coins.
It will be interesting to see how the crypto community embraces a coin that tries to bring in elements of a fiat currency. Cryptocurrencies try to eliminate the exact needs demanded by a fiat currency that Tether is incorporating. One of the main attractors for Tether will be it’s user friendly mobile app. The easy to use system could be a hit among many fans and skeptics alike. While the price chart for USD will always remain the same, the chart for USDT’s value compared to other cryptocurrencies will ebb and flow. Time will tell if this hybrid coin will be as valued as other coins by the community.