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Cryptocurrency

What Is Tether Cryptocurrency? Why Is It So Controversial?

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Tether is one of the most popular blockchain-based cryptocurrencies around the globe. However, the token‘s circulations equal the amount of U.S. dollar involved, making it reliable crypto with the price fixed at USD 1.00. Stablecoins make it easy to track the physical fiat currencies such as Euro, Dollar, Japanese Yen, and much more.

The tokens developed by crypto exchange BitFinex, trade under the USDT symbol. In October 2021, USDT was ranked the 5th largest cryptocurrency by capitation, with a market share worth $68 billion.

Understanding The Tether

This digital currency belongs to a family of cryptos known as Stablecoins that protects the coin’s value from fluctuating. Unlike other cryptocurrencies like Ethereum and Bitcoin, whose prices keep swinging, USDT is very stable.

Besides, this digital currency is categorized under crypto-collateralized Stablecoins, making it stable like the traditional currencies like U.S. Dollar, Yen, Euro, and much more.

This crypto is designed to bridge digital and fiat currencies by offering maximum transparency with minimal transaction costs. The value is pegged against the USD in a 1-to-1 ratio. However, there’s no guarantee that you can exchange crypto with the U.S. dollar. As of now, you can’t exchange this crypto for U.S. dollars or any other fiat currency.

In July 2014, Tether Ltd launched the cryptocurrency as RealCoin, rebranded it to Tether, and started trading in February 2015.

Why Is The Tether Cryptocurrency Controversial?

Although USDT brands itself as a transparent cryptocurrency, recent happenings may have a long-term negative impact on its reputation. In November 2017, the crypto reserves were hacked, and over $31 million coins were stolen.

However, instead of the company addressing the issue, it parted ways with the audit firm, raising questions over USDT transparency. Besides, New York Attorney General Letitia James accused crypto mother company, iFinex Inc, of hiding over 850 million dollars in loss of corporate and co-mingled client funds from investors.

In their response, the Crypto company claimed the filings were written in bad faith, and it had not incurred any loss, but the money was seized and safeguarded.

Tether tokens can be transacted via popular crypto exchange platforms such as BitFinex, CoinSpot, Kraken, and Binance.

What Are The USDT’s Special Features?

Stability

One of the most popular USDT features is the stability against the U.S. dollar. The digital currency is the same amount as the U.S. dollar, making it stand out against other cryptos that keep fluctuating. However, Tether trades using blockchain technology like other digital currencies on the crypto market.

Stablecoins Are Unregulated

Although the federal government can enforce laws to regulate the Stablecoins, the coins remain largely unregulated. However, the Biden administration is allegedly working on new regulations to control the Stablecoins. It’s unclear if Congress will impose Financial Stability Oversight Council on the company.

5 Key Things You Need to Know Before Purchasing Tether

The cryptocurrency market is very dynamic. Thus, you need to be adequately informed before you think of investing in it. Here are top factors you need to be aware of before buying this crypto:

1. USDT Is Tied To The U.S. Dollar

Unlike other popular cryptos, stablecoin is pegged on the U.S. dollar amounting to the same value. Meaning, if you have 1 tether, it’s equivalent to $1. The price of this crypto doesn’t fluctuate like other cryptos on the market.

2. You Can Use USDT To Buy Other Cryptos, Earn Interest, And Transfer Money

Although Tether might not be a good investment, you can use it for different purposes:

  • Buy other cryptos: Tether can purchase other cryptocurrencies on various crypto trade platforms.
  • Money Transfer: Tether wallet offer one of the best options to send money. You can quickly transfer money to other persons or within your exchange accounts free of charge.
  • Earn Interest: You can earn up to 25% interest by lending your crypto coins.

3. The Tether Limited Is Very Controversial

This crypto is one of the best digital currencies to buy in terms of stability. However, the company behind the digital currency reputation is not impressive. The company has been accused of hiding critical information from its customers.

4. The Company Is Accused Of Manipulating Bitcoin Prices

Although not yet proven, there are allegations that the company used to inflate bitcoin prices. Before investing in this crypto, make sure you understand how the supply works.

5. The price Fluctuates From $1

Cryptocurrency tether intends to be a stable digital currency and is tied to the value of the U.S. dollar. However, there are some periods where the value has gown down to less than a dollar. In 2018 there was a period this crypto was selling at $0.90. It also happened in 2020 where the value went up to retail at $1.06. Thus, it would help if you were psychologically prepared that the value may either go up or down.

How To Buy Tether (USDT)

The excellent part of Tether is that it works with various blockchains such as bitcoin, Tron, Ethereum, liquid, Solana, EOS, and much more. The easiest way to buy this crypto is via crypto exchange supporting USDT.

  • Wallets: You can store your USDT in the wallet connected to exchange for easy buying or selling.
  • Transaction Time: USDT transfer takes less than 2 minutes if you trade via TRC2-blockchain. However, on OMNI or the bitcoin blockchain, it may take up to 40 minutes.
  • Fees & Expense: The costs vary from one blockchain to another. On ERC-20, you will be charged the Ethereum gas fees.

Tether FAQ

What Can I Use Tether For?

The USDT is a good investment since it’s stable and offers various ways of avoiding volatility if other cryptos. It’s also pegged to the dollar, comes there are no transaction costs involved.

How Can I Buy USDT?

The tokens are available on all popular crypto exchanges such as CoinSpot, BitFinex, and Kraken.

Is Tether A Stablecoin?

Yes, USDT is the most popular stablecoin globally. There are other stable coins such as PAZOS Standard (PAX), USD Coin (USD), and True USD (TUSD).

Why Tether Token?

There are many reasons why you should go for Cryptocurrency tether. The value is pegged on the U.S. dollar, and you can quickly transfer your bitcoins to tether. This digital currency is the stable crypto on the market today. Expect no extreme value fluctuations.

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