People who are big fans of the android bitcoin app and ether would know that tether is the third-largest cryptocurrency network. There have been controversies about tether in the past but today, it is a plausible investment sector. Tether is hosted in the Ethereum blockchain platform where you will find the tokens of the tether being issued by tether limited.
This is a stablecoin whose tokens are circulated and backed by the US. This gives a clear indication that a piece of tether or one tether coin is equivalent to one US dollar in price. Today the market capitalization of tether is around 73 billion dollars. These tokens were developed initially by BitFinex and are traded under the symbol of USDT. Being a stable coin, tether tokens have the purpose of maintaining a stagnant value of crypto.
Importance Of Stablecoins- Everything You Need To Know About
The idea behind stablecoins is fairly simple. They have a value that is decided and kept fixed. These tokens are generally backed by the US, making the tokens digital footprints of cash. That means a tether coin is equal to 1 US dollar. These are essentially money that would get you the same things cash gives you.
Imagine stablecoins as a bridge that connects the gap between fiat currencies (or cash) and cryptocurrencies. While with cryptocurrencies, the market keeps on fluctuating, people are thus not encouraged to save their coins instead of selling them so quickly. Thus, stablecoin being the same valuation as normal money with relatively low inflation, the investors have the reliability to invest in them.
Stablecoins are varied, and their types are mentioned below:
- Fiat-Collateralized Stablecoins
- Crypto-Collateralized Stablecoins
- Non-Collateralized or Algorithmic Stablecoins
Controversies about Tether
There have been many scenarios that have suggested that tether is not the ideal currency to circulate. However, recent studies have found that it is standing with a huge chunk of market capitalization regardless of all the controversies. Nonetheless, knowing both fronts help people not only make good decisions but also ensure that they are completely sound with the plausible risk factors.
In 2017, the database of tether was hacked, and an amount as big as 31 million dollars worth of coins was stolen. In 2018, an audit to check the real world reserve was held. However, instead of the audit itself, the company announced that it was parting ways with the auditing firm. These raised some severe questions, which caused subpoenas to be issued.
Investing In Tether- Is It A Good Idea?
Despite all the rumors and controversies, people have seemed to take a keen interest in stablecoins. This is because it provides major security in the fluctuating market. Tether is one of the most advanced stable coins and has caught the eyes of major business people looking for better ways to invest. After researching a lot, people have found some amazing benefits that tether brings with it.
Some of them are mentioned below:
- Being a stablecoin it is not affected as much by market fluctuations. In such cases, there remains arisk when it comes to investing in cryptocurrencies. This is inevitable, but stablecoins are equivalent to US dollars (in case of tether). Hence they suffer inflation but not to a huge extent. Thus it is relatively safer to invest.
- Since Tether is under US banks, it is easy to transact and purchase things with Tether. This means, when Tether is used, there is always the low transaction fees in comparsion toto exchanging money for US dollars. Moreover, since it is very little to no hindrance, the transaction is done rather smoothly.
- Finally, a major advantage is using tether to protect your cryptocurrency during high market volatility. You can swap your bitcoins for tether when the market fluctuates by huge measures. Then you can swap the coins back to bitcoin.
Final Words
Summing up, tether has its pros and cons, and it is important to research and conduct studies before investing. The funny thing is even with so many controversies around it, tether has managed to emerge through them and become a credible and reliable crypto stablecoin for business people. Hopefully, these pointers will help you understand the core of the coin and help you make an informed decision.
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service. The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components
