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Tether or USDT is a fixed price digital currency (Stable coin) that protects people’s capital against currency market fluctuations. In this article, we are going to examine Tether currency in full, so stay tuned until the end.

What is Tether?

The daily price fluctuations of digital currencies are sometimes so great that they are no longer for normal purposes. Although price fluctuations may make some traders profitable, they limit the effectiveness of digital currencies in foreign exchange transactions.

Digital currencies previously used in the Dark Web gradually found their way into the mainstream market. Of course, at that time, small capitalists were not eager to invest in it. Due to price fluctuations in the digital currency market, they gradually became interested in it.

Banking and financial institutions around the world also reacted to digital currencies and everyone was arguing about it. High price fluctuations have made digital currencies a potential asset. Of course, price fluctuations in the field of cryptocurrency may act as a double-edged sword.

For example, in 2017, when the price of digital currencies was at its highest possible, many investors wanted the cryptocurrency market. In addition, price fluctuations may drive investors out of the market. The decline in the price of digital currencies in the market is also quite noticeable. It affects the volume of transactions and interest rates in the market.

To be able to use digital currencies in daily trading, price fluctuations must be eliminated and this is where this currency comes into play. It is a Stable Coin that, with its stable purchasing power and very low inflation, motivates investors to keep it by converting them instead of holding tokens and coins. In other words, Tether is a fixed-price currency code whose currency is a Fiat currency (such as the US dollar).

What is the Tether currency?

The Tether currency code is a combination of Fiat and StableCoin, the value of which is determined by the US dollar and other Fiat currencies.

Tether is a digital asset issued by Tether Limited that operates on the Omni protocol. In other words, every Omni transaction contains a tether which is with the same hash in bitcoin transactions.

Tether is the most popular stablecoin in the world, serving as an alternative to the US dollar in popular exchanges such as Bitfinex and Poloniex. When we say that Tether is getting along with US dollars, it means that for every new unit of Tether that is coming, 1 US dollar goes to the bank treasury; Of course, keep in mind that the US dollar is not immune to changes in the global currency market and inflation.

Tether is for helping to reduce price fluctuations in digital currencies. Tether also allows users to use digital currencies as Fiat currency, so its value does not fluctuate and should always be around $ 1. The euro is another currency through which Tether determines its token price, as it controls the EU market.

In general, using Tether currency brings many benefits to users. Some of the most important of which you see below:

Cryptocurrency transfer:

Tether facilitates the transfer of real cash to digital currency and converts it to other digital currencies due to the secure payment on the blockchain at a very high speed compared to Fiat money.

The reception :

Platforms working with digital currencies have made significant progress since the adoption of Tether. In addition, platforms that were initially unable to use the US dollar were allowed to enter new markets by adopting Tether.

Excellent support:

Your investment in the digital currency market is financed by Tether. The amount of Tether in circulation is always commensurate with the financial support provided for it.

How does the price of Tether stay at $ 1?

Hong Kong-based Tether Limited has set a US dollar of financial support for each Tether unit in circulation. In other words, the company is a trusted intermediary for Tether. The difficulties in collecting Fiat currency with cryptocurrency are through simple methods that do not affect the security and transparency of financial audits.

Tether is based on the Omni protocol. It is a multi-functional platform in several digital currencies related to the Bitcoin blockchain. Each USDT equals $ 1, meaning it can be repurchased at any time for $ 1.

In this regard, the customer who charges Kraken bank account in US dollars will receive one USDT per Tether at the rate of 1 US dollar. In addition, users can exchange their digital currencies with Tether on currency exchange platforms. If users top up their bank accounts in Fiat currencies, Tether Limited will deposit the equivalent of Tether tokens into their wallets, so users can use Tether wherever they want.

There are many questions about the security and decentralization of the network. An overview of the performance of the Tether mechanism will show that the performance of the system is dependent on the stability of Fiat exchange rates. For example, suppose an exchange office fails to pay Fiat currency, or dollars, to customers who have sold their USDT. In this case, the company must prepare the dollar cash for this exchange within a specific time frame. In fact, by examining this issue, we find that it is a central system and contradicts what it claims.

Tether applications

The main purpose of Tether is to provide liquidity and protect people’s capital against market fluctuations. The value of USDT tokens is the exchange rates of Fiat currencies so they do not fluctuate or fall in price like other digital currencies. It also makes stable coins less risky than other cryptocurrencies.

Another advantage of it is that it can be changeable with Fiat currencies. It is why traders and investors in the digital currency market are very eager about it. When the market is in a downturn, especially in countries where it is very difficult to convert cryptocurrencies to fiat money, it is the best option to protect the assets of capitalists.

Tether relationship with Bitfinex exchange

Allegations of Tether’s covert relationship with the Bitfenix exchange have been leaked to the media. The Chief Financial Officer and the Chief Strategy Officer are common to both organizations. New Tether accounts go to Bitfenix. So it is easy to see why both organizations had liquidity problems at the same time after the US Bank and Wells Fargo ceased to operate. As a result, Bitfenix does not currently serve US customers. Its market is no longer just for the US dollar but instead uses the USDT exclusively.

Other research has been published on the behind-the-scenes collaboration between Bitfenix and Tether. Researchers believe that Bitfenix has launched it in the market regardless of demand. In fact, according to researchers, Bitfenix has created artificial demand for bitcoin and other digital currencies. Thereby boosting their market value.

When the price goes down, they can convert this to Bitcoin and then sell the bitcoin after the price rises. Thereby increasing its reserves again. When the price drops again, they set the Put Option by default to repurchase it. It claims that the hacker attack it or the corresponding dollars disappeared!

Types of USDT

This currency is available on 3 different Chinese blocks, you can use any of them.

1- Bitcoin blockchain: This type of it is located on the Bitcoin Omnilayer blockchain. It is not much due to the low speed of this network.

2- ethereum blockchain: This type of currency is on the Ethereum, which is the ERC20 algorithm. The speed of this network is high and the fans of this type of it with the ERC20 USDT mark are very high.

3- Chronetron block: This type of it is also located on the Chronetron block. It is the TRC20 algorithm. This network is also in competition with Ethereum and has a high speed.