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What is USDT?

Stablecoins are an essential part of the cryptocurrency ecosystem, and Tether (USDT) is the first and most popular stablecoin

Andrei Naumov, Editor, crypto
20 May 2024, 21:41

USDT: A Brief Overview

The price of this cryptocurrency is pegged to the US dollar at a 1:1 ratio. This means that each unit of USDT is almost always equal to one US dollar and can only deviate slightly (typically, the price fluctuates around 0.99 to 1.02).

Tether was first launched in 2014 and then spread across various blockchains: Ethereum, Tron, Algorand, and others. Initially, the coin was based on the Omni protocol, a blockchain protocol that works with Bitcoin, but later it transitioned to other blockchains to be more flexible and accessible. Currently, the majority of USDT coins are on the Ethereum platform as ERC-20 tokens, with the rest on TRON (TRC-20), Solana (SPL), and other networks.

Thanks to its flexibility, Tether addresses issues such as volatility and the complexity of converting between different cryptocurrencies and fiat money.

You can learn more about how USDT and other stablecoins work in our video on the Bitbanker channel.

Advantages of USDT

  1. Stable Value Compared to Other Cryptocurrencies. Unlike Bitcoin or Ethereum, USDT is not is not so volatile. Its value is fixed and cannot significantly deviate from the US dollar.
  2. Easy to Trade and Exchange. With USDT, traders and investors can quickly transfer assets into a stable instrument. This is especially useful during volatile market periods to protect capital from losses. With USDT, there is no need to constantly switch between cryptocurrency and fiat money, saving time and reducing transaction costs.
  3. Fast Transfers Between Exchanges. USDT is available on various blockchains, allowing users to easily and quickly move money between platforms. This significantly speeds up trading and enables traders to earn from arbitrage, which is the price difference of cryptocurrencies on different exchanges.
  4. Available on All Centralized Platforms. High liquidity of USDT allows its use in various trading strategies without worrying about price fluctuations.

How to Trade USDT

You can buy USDT in your Bitbanker account. On the platform, you can trade USDT in pairs with the following assets: USD, EUR, AED, KGS, RUB, BTC, ETH, and gold.

Two Types of Orders Available

  1. Market Orders (at the best price): these allow you to buy or sell USDT instantly at the best available price in the order book. The fee is 0.15%.
  1. Limit Orders: purchase or sale at a price you set. The platform will automatically execute the trade when a matching offer appears in the order book. The fee is 0.10%.

How to Store USDT

USDT can be stored in hot and cold wallets.

On Bitbanker, USDT is safely stored in the platform’s wallet. You can exchange, buy, and sell cryptocurrency for fiat money and bank transfer.

USDT can be withdrawn via SWIFT transfer and to a VISA card. Additionally, USDT can be transferred to Bitbanker users, and such transfers are commission-free.

Types of USDT Networks

USDT operated on multiple blockchain networks, each with its own features. Here are the main USDT-networks:

  1. Ethereum (ERC-20): This popular standard is widely used and is compatible with various decentralized applications and platforms. The downside is the high transaction fees when there’s a high network load.
  2. Tron (TRC-20): A popular network for USDT with low fees and fast transactions. Tron is suitable for frequent transfers, allowing savings on fees.
  3. Algorand (ALGO): Offers fast and cheap transactions.
  4. Solana (SOL): Known for its high transactions’ speed and low fees, it is used for large and frequent transfers.
  5. Omni Layer: The first network on which USDT operated. While reliable, transaction fees can be higher than other networks.

Why Choosing the Right Network for Transfers is Important

Choosing the correct network for USDT transfers is critically important. If you choose the wrong network, your funds will be lost. For example, if you send USDT from an Ethereum-based address (ERC-20) to a Tron address (TRC-20), your tokens will be lost permanently.

Before making a transaction, always check that you are using the correct network for sending and receiving USDT. Ensure that your wallet or exchange supports your network. It is also essential to consider transaction fees and processing speed in each network to choose the one that best suits your needs. We have already discussed how to choose the appropriate network for USDT in our blog.