If you are interested to the previous posts of this series, check it out here:
What is it?
Tether is a stablecoin, which means it's a digital currency that aims to be a stable replacement for a legal tender (Fiat money). On the official website, the definition assigned to cryptocurrency is the following: "Tether converts cash into digital currency, to anchor or tether the value to the price of national currencies like the US dollar, the Euro, and the offshore Chinese yuan". From this we can deduce that the creators of the project wanted to assign to the digital currency the purpose “to link the value of the cryptocurrency to fiat money”. When we talk about Tether, nine times out of ten we refer to the stablecoin USD₮, the acronym that identifies a single tether linked to the price of one dollar. In fact, Tether project also incorporates other stablecoins: EUR₮: a tether linked to the price of one euro. CNH₮: a tether linked to the price of one Chinese yuan.
How does it work?
Tether transitions are mainly based on the Omni platform, which in turn is based on the Bitcoin blockchain. However, the USDT stablecoin also works on other blockchains, including Ethereum's one, where Tethers are minted in the form of ERC20 tokens. Many traders consider Tether as a safe haven asset like gold, being aware that it still remains a digital currency. Investors often sell the cryptocurrencies stored in their electronic wallet by exchanging them with USDT, in order to be able to count on a stable cryptocurrency to be used in numerous trading sites for virtual currencies. The fluctuation in the value of each USDT is minimal, usually never deviating from the range between $ 0.99 and $ 1.02.
Where to store it?
Tether purchase procedure is similar to that required by other cryptocurrencies. First, however, a wallet that supports the Tether stablecoin must be created. One of the best choices is the Tether wallet that can be downloaded from the official cryptocurrency portal. To download it is sufficient to complete the registration to the portal. Alternatives are MyEtherWallet (MEW), OmniWallet and Exodus, all three electronic wallets to download as desktop computer software. For those interested in a hardware solution, we recommend the purchase of Ledger Nano S.
Pros&Cons
*DISCLAIMER* These lists are subjective, it depends from person to person
Pros
- It's a stablecoin that manages to maintain a price close to the reference fiat
Cons
- Because of its centralization, only Tether can issue the asset
- Tether has the power to block and freeze user funds
- It's impossible to do cross-chain operations
- Tether is not sufficiently accepted as a payment method yet
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