What is the USDT and what is it used for?

What is the USDT and what is it used for?

By jordanjnr | Crypto Digest | 8 Dec 2019


This post took quite some time and effort to put together. I'd love a tip and follow to encourage my work. Cheers!

As simply as possible,the USDT or Tether or USD tether is a stable coin.

And what is a stable coin?

Well,a stable coin is a cryptocurrency that is pegged to a certain asset in the real world, and retains its value no matter what way the cryptocurrency market moves.

Basically,it retains the value of the asset that it is pegged to.

And this asset must be held in reserves by the issuer of the coin.

This makes the coin centralised,but in a good way.

A great example of a next gen stable coin is DAI.

The USDT aims to be exactly one dollar,and it is 95% of the time.

The other 5% usually sees it at 0.99 dollars or 1.01 dollars.

Either way, it's usually a dollar.

So should you trade it?

Heck no!

You see,stable coins aren't created for you to make profit.

Buying a bunch of stable coins and holding them for 10 years will leave you with exactly what you started out with.

As long as the asset it's pegged to retains its intrinsic value overtime.

So what is the USDT used for?

Well,imagine if you wanted to trade the BTC/USD pair,but you can't do fiat deposits on your trading platform(say it's Binance).

Well,what do you do?

You can't just forget about trading.

You've got to get that yellow lambo!

Well,you could exchange some of your bitcoin or other cryptocurrencies that you already own to the USDT,and then trade the BTC/USDT pair.

It's basically the same thing as trading the BTC/USD pair.

So that's the USDT is a nutshell.

Thanks for stopping by!

This post took quite some time and effort to put together. I'd love a tip and follow to encourage my work. Cheers!


jordanjnr
jordanjnr

Hello! I am a Blockchain enthusiast,bitcoin investor,CEO of BigTycoon group and I love crypto! Hit me up @TycoontechBlog on twitter!


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