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When asked what USDT is, many of you who are new to the cryptocurrency market do not understand correctly about this electronic coin. In this article, Kienthuccoin will provide the most basic, necessary, and detailed information to explain what USDT is and how USDT works thoroughly.
What is USDT?
What is USDT? USDT (or Tether coin) is a cryptocurrency with a value guaranteed in USD at a ratio of 1:1 issued by Tether Operation Limited in 2014.
USDT is designed to increase liquidity and minimize maximum price fluctuations. It thus becomes a secure medium of storage and stable exchange rather than a speculative form of investment.
Since its launch, USDT has been the most popular stablecoin in the Cryptocurrency market, with a market capitalization of more than 60 billion USD. Although there have been many competitors in the Stablecoin market, such as USDC, BUSD, DAI, etc., USDT is still the stable coin with the largest market share (up to more than 60%), far ahead of the No. 2 position is USDC with only about 20%.
What is the purpose of USDT?
To answer the question of the purpose of USDT, USDT is used to store, trade and exchange other coins in the market.
Thanks to blockchain technology, USDT possesses all the advantages to overcome the limitation in the payment problem of today's currencies. It makes it easier to transfer money between countries, saving costs and ensuring user security.
In addition, when Bitcoin and other Altcoin movements are affected and fluctuate greatly, USDT is a haven to ensure users' assets do not lose many thanks to the stable nature of but in times of market crisis.
How USDT Works
The USDT coin works as simple as this:
- Step 1: Use cash to buy USDT.
- Step 2: Now, Tether will produce one similar Token. The USDT you buy is valued at 1 USD you deposit.
- Step 3: You can trade freely, buy, sell and exchange freely.
- Step 4: You don't like to play anymore, so you will sell your USDT to Tether to withdraw real money or sell it to exchange or someone.
- Step 5: If you want to sell it back to Tether, Tether will pay you back and permanently destroy that Token.
Investment opportunity with USDT
Stablecoin is a very important piece of the puzzle in any ecosystem. Currently, USDT accounts for a large market capitalization in the Stablecoin market, so keeping an eye on USDT metrics can partly gauge the movement of money.
You can track the following metrics to project cash flow:
- Capitalization of USDT
- Capitalization growth rate
- USDT trading volume on the ecosystem
Classification of USDT on Blockchains
After many years of formation and development, Tether has released versions of USDT on many different platforms, including Tron, Ethereum, EOS, Liquid, Alrogand, Solana, etc. In which, the two most noticed platforms are Tron and Ethereum.
USDT on Ethereum
In September 2017, Tether decided to issue USDT on Ethereum's platform according to the ERC20 standard. The value of USDT on Ethereum's platform is currently over $2 billion.
USDT on Tron
After issuing USDT on Ethereum, Tether issued more USDT according to Tron's TRC-20 standard on April 16, 2019.
USDT on Other Platforms
Other Versions of USDT:
- USDT – Omni: The first version of USDT, released on October 6, 2014, on the Omni Layer of the Bitcoin Blockchain.
- USDT – EOS: Released on the EOS platform on May 31, 2019.
- USDT – Liquid: Released on the Liquid platform on July 29, 2019.
- USDT – Solana: Released on December 9, 2020, on Solana platform.
- USDT – Alrogand: Released on February 10, 2020, on the Alrogand platform.
How to distinguish USDT wallet address on each Blockchain
USDT is deployed on many different Blockchains. Moreover, the place to check USDT transactions will differ on each Blockchain. Therefore, you need to know how to distinguish the Address on each Chain to avoid loss.
When transferring USDT from the exchange to Non-Custodial wallets or between Non-custodial wallets, there are a few points you need to keep in mind:
- The sending and receiving addresses need to be on the same Blockchain.
- Paying special attention to the deposit and withdrawal operations on the exchanges, you need to pay attention to the Blockchain used to send/receive tokens.
- When making a money transfer, pay attention to check that the deposit and withdrawal address is correct.
Distinguishing signs of wallet addresses of some popular USDT-enabled Blockchains:
How to distinguish USDT wallet addresses OMNI, ERC20, TRC20.
Note: Networks like Binance Smart Chain, Matic (Polygon), Heco, Fantom, Avalanche C-chain, etc., use the Ethereum virtual machine to have the same wallet address as ERC-20.
Conclusion
Suppose you decide to participate in the cryptocurrency market. In that case, you should still buy USDT to reserve because it will be a powerful weapon to help you avoid losses when the market fluctuates. Hopefully, the article “What is USDT? What you need to know about the stable coin USDT” can help you read more deeply about it. USDT and develop the right investment strategies.
What are the frequently asked questions about USDT?
Why buy USDT?
- Price stability
- Fast
- transaction times Attractive transaction fees
- Transparency
Is there a fee to use USDT?
Once on exchanges like Poloniex or Bittrex, USDT can be used to buy Bitcoin and other cryptocurrencies. Users will also easily transfer USDT from an exchange to any Omni Layer wallet.
Transactions via Tether are completely free, although other wallets or exchanges may charge a one-time fee. To convert from USDT to USD or vice versa via Tether.to platform, users have to pay a small fee.
Where is it safe and reputable to Buy and sell USDT?
There are many reputable USDT exchanges such as Huobi, Remitano, Binance, muabannhanh.io, etc., but they are quite expensive, and the cost is high. To ensure safety and save, you can refer to buy on Bitcoin exchange Vietnam.
