Tether (USDT) is a digital currency equivalent to 1 US dollar. To answer the question of what Tether is and how it works, we must first understand it in its entirety. This digital currency, backed by the dollar, is designed to protect investors from extreme volatility in the digital currency market. The main difference between Tether and Dollar is that digital transfers are fast and easy. Tether, which was introduced to the world of cryptocurrencies in 2014, has become one of the most widely used digital currencies, and the reason for this is that it is protected from the ups and downs of the digital currency market. It is known as an effective tool to control price volatility in cryptocurrency trading.

What is Tether?

Tether or USDT is a digital currency backed by the American dollar. Therefore, the price of 1 unit of USDT almost always equals 1 USD. Tether is a stable digital currency (Stablecoin). The value of stablecoins depends on the value of their underlying asset and will rise or fall with it. In addition to Tether, several other stable digital currencies backed by the dollar have been introduced to the market; But now USDT has a big market. It is strongly leaning toward a third place in the digital currency market.

The cryptocurrency tether, known by the symbol T, is a stablecoin pegged to a real currency, the US dollar’s most popular backing. Trading under the symbol USDT, Tether allows traders to move the exchange’s fiat equivalent without following complicated rules. Fiat currencies are common currencies such as the dollar, euro, pound, etc. that governments supply and maintain. Tether protects your capital from risk and loss when the market changes. Because the price of Tether always remains at one dollar. Of course, be aware that although this cryptocurrency protects your capital from the fluctuations of the digital currency market, considering that Tether is a stablecoin dependent on the US dollar if the value of the US dollar falls overnight and reaches half of e.g. Of course, the value of your Tether holdings will also be halved.

What is the use of Tether?

Tether has two main uses:

  • Avoiding the extreme volatility of the digital currency market
  • Exchange in dollars and easy money transfer to wallets

Let’s say you bought a bitcoin for $8,000. A little later, the price reaches $ 10,000. In this case, you will convert your bitcoins to Tether quickly and easily and save 10,000 units of USDT. The price of Bitcoin then drops to $6,000, But your capital is still worth $10,000 and you can buy more Bitcoins at lower prices. In addition, you can easily store this digital currency in a digital wallet on your phone or computer, or wallet. Sending and receiving USDT is as simple and fast as sending an email. These features make this cryptocurrency very popular among traders.

Now, this digital currency is transferred to blockchains like Bitcoin, Ethereum, Tron, Solana, Polygon, Olench, Elgorand, and many others blockchains. This means that Tether is very easy to access and can be stored in different wallets such as Ethereum, Tron, Solana, and Olench.


Which company is behind Tether?

iFinex is the owner of the Tether institution and operator of Bitfinex digital currency exchange. new USDT units have been released and are being circulated on the Bitfinex exchange. This digital currency was first launched in 2014 under the name “Real Coin” and changed its name shortly after. This digital currency was first launched in 2014 under the name “Realcoin” and changed its name after some time.

How does Tether work and what causes Tether’s stable price?

According to the law, for each unit of USDT produced, one US dollar is in bank reserves, which serves as ballast for this digital currency. That is to say that if 4,000,000 units of USDT were issued to the market, then $4,000,000 must be kept in bank coffers so that the price is always equal to one dollar. Needless to say, the digital currency community is skeptical about this issue, with some accusing the digital currency of not having enough support. The Ifinx company generates new USDT units on demand and at different periods and imports them to the Bitfinx exchange, and then traders and market makers take them to other exchanges and wallets, and this type of Tether is circulating.

Another important point is that USDT transactions are carried out on largely decentralized blockchains, But the distribution of its parts is completely centralized and cannot be called a decentralized digital currency. You can see the amount of USDT available and the status of transactions and their addresses by visiting search websites like EtherScan. According to Tether, every time it issues a new USDT, it allocates the same amount of USD to its reserves. Therefore, it is ensured that USDT is fully backed by your currency and equivalent to currency. This feature makes USDT a haven for cryptocurrency investors.

In times of high volatility, they can convert their holdings into Tether without transferring their money entirely into USD and cash. Additionally, USDT provides a simple way to trade US dollar equivalents between regions, countries, and continents via the blockchain – without relying on an expensive intermediary such as a bank or financial service provider.

Buying and maintaining Tether

You can buy Tether like any other digital currency. All types of centralized and decentralized cryptocurrency exchanges are suitable for buying Tether and can be exchanged with almost all digital currencies on the market. Centralized exchanges like Binance, Kocoin, FTX, Gateway, Hubei, Kraken, and Bitmax are the main markets for buying and selling Tether. There are also many decentralized exchanges such as UniSwap and SushiSwap where various currencies can be exchanged for Tether. However, you should pay attention to what blockchain standard your Tether has when purchasing. This plays an important role in choosing the right wallet. For example, to store the ERC-20 standard Tether on the Ethereum network, You should use an Ethereum-compatible wallet such as Metamask, MyEtherWallet, TrustWallet, Trezor, or Ledger hardware wallets.


What are the special features of Tether?

Tether’s properties have created several uses as a reliable and well-known stablecoin. For this reason, Tether is one of the most widely used digital currencies. The purpose of buying Tether is different from the one we look for when buying Bitcoin, and this is due to the following characteristics:

1. Good replacement for the dollar

Tether (USDT) is a digital and cryptographic example of the dollar on the blockchain network and is alternatively exchangeable. Because it can easily be converted into kid dollars in many parts of the world. Digitization of dollars eases the time-consuming task of transferring dollars. The transfer speed of USDT is much faster than that of dollar transfers, which makes it more economical, and there are no restrictions on buying and selling dollars. Tether can also be used to exchange dollars for payments. Due to the validity of Tether, it is possible to use it instead of money in many exchange platforms, for example, the service Travala (Travala.com), which is a hotel reservation service and tourist trips, has made it possible to pay with Tether.

2. Preservation of capital value

Another use of Tether as a stablecoin is to protect capital from sudden changes in the digital currency market. When the price of an asset rises, that asset can be converted into Tether, and when the price of the same asset falls, it can be bought with Tether.

What are the benefits of Tether?

As for Tether, owning it is like owning a bank deposit, except it pays you 0% interest. So, if Tether is riskier than other cryptocurrencies and there is no possibility of its price increases, then why do we use it? In response, we must say that this cryptocurrency is very useful and practical for traders and investors because it is similar to fiat currency. For several reasons:

1.  Low transaction fees

Payments on the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network are very expensive. The fee for each transaction in this network is over $20 and averages $30. Also, if you use a currency that is not supported by the exchange in question, the bank will charge you a hefty fee to convert and transfer money abroad and a percentage of your money as a fee. But Tether doesn’t charge you a fee to transfer money between your wallets. Of course, a block-based transaction may cost you a small network fee – less than a dollar.

2. Existence of price stability

Digital currencies are very volatile. Trading one volatile currency against another creates a lot of complexity and risk. That’s why stablecoins are easy to use.

3. Be on the side

Timing “Never” is the best position to trade in the market. Let’s say you feel that the value of your digital currency is too high. Now the best course of action is to exchange your money as soon as possible. That is, sell your cryptocurrency – and wait for the digital currency’s price to fall before buying it again.

The best Tether wallet

1. Ledger Wallet

The most secure way to store your token is to store it in a hardware wallet. A hardware wallet takes your coins offline and cannot be hacked or stolen unless someone physically accesses them. “Ledger” has two versions that support 1200 cryptocurrencies. Both “X” and “S” models support Tether. Their main difference is that a mobile phone can control the ‘X’ model.

2. Trezor Wallet

“Trezor” is a hardware wallet that also accepts “Tether” and has two models. “A” and “T” models, the “T” model is new and has a touch screen. Trezor wallets are only compatible with computers and cannot be controlled via mobile phones.

3. Coinomi Wallet

Coinomi is a multi-platform software wallet that allows storing more than 1500 different currencies and has an exchange inside. Coinomi has been released for Windows, Android, Linux, and iOS.

4. Exodus wallet

Exodus is a beautifully designed software wallet that accepts over 100 cryptocurrencies. Exodus is a good recommendation for those new to crypto.

5. Tether wallet

We should say that Tether also has an online wallet to store your tether. This wallet is not recommended as it only accepts cash. Additionally, this wallet was previously blocked due to a $30 million harvest that occurred.

Is Tether cryptocurrency safe?

The problem is that the US dollar is not backed by all the tethers in circulation in the world; That is, the number of Tethers in circulation in the world is slightly more than the dollar assets of Tether Limited. This is the story of Tether Limited and the trading platform Bitfinex. (Bitfinex) is involved. Several Tether Limited executives are also present in Bitfinex management. Bitfinex uses a third-party service provider called Crypto Capital Corp for some payment services. As a payment provider, the company owns the majority of Bitfinex assets. But in 2018, about $851 million of Bitfinex assets under the control of the payment company were frozen by a court in New York due to some legal disputes from several different countries.

Tether cryptocurrency transaction and transfer fees

When transferring Tether from one wallet to another, you should note that their protocols must be the same. For example, the ERC20 protocol is the protocol used to transfer cryptocurrencies on the Ethereum network. If your Tether is on the Ethereum network, you can send Tether from this protocol and addresses that support it. “Binance” exchange can transfer Tether through Ethereum, Tron, Binance, Binance China, and Bitcoin networks. Because the transfer fees for each of these networks are different from the others, you may want to use the network with the lower fee. But you should know that your communication wallet also supports the required network address.

In Blockchain networks, the transfer fee is not fixed and varies depending on network traffic. However, Tether transfer in the Tron network is usually done with the TRC20 protocol, and Binance China with the bep20 protocol is faster and at a lower cost. In addition to the four networks mentioned, Tether is also offered on other networks such as “Solana” and “Eos”, but the main supply of Tether is on these four networks.


Tether digital currency is specifically placed in the category of fiat security stablecoins. In other words, a fiat currency such as the US dollar, the euro, or the yen supports any cryptocurrency in financial circulation and keeps the value of that digital currency stable. The Tether digital currency was specially designed to create the necessary bridge between fiat currencies and digital currencies and provide stability, transparency, and low transaction costs for users. It is safe to say that the digital currency Tether is the main source of liquidity for the digital currency market. We tried in the article How does Tether work? We will provide you with information about the stablecoin Tether and check if Tether is safe or not.

4.7/5 - (15 votes)

Leave a comment