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Review on Tether by Moshe Bal
Stable coin Tether review
The main idea of a stable coin in itself is a big step towards a safe blockchain ecosystem. Currently, many new entrants who cannot afford the capital or volatile market buy these tether as a reserve and then use it later as the price is stable to the dollar.
However there is no provision to mine the token which might not be a great idea, but to keep the tether valued at $1, it is the necessary step.
Tether aims to represent a digital cryptographic value equivalent to Fiat currency, US Dollar to be exact. Tether token at the core is very much a cryptocurrency, with features such as the decentralized form of data storage and processing.
However, what makes it distinct in comparison to mainstream cryptocurrencies such as Bitcoin and Ethereum is it centralized emission and the rate which is always kept at an equivalent to one dollar.
In case of any third party wallet, there will be charges as set by the third party wallet system. A user still needs to pay a small amount over fiat deposition, usually 1 USD. The advantage of sharing money over the USDT network is that people won’t suffer any loss of fund due to market capitation as the value of USDT is fixed.
Pros
- The USDT can be used to transfer money over the decentralized network at a cheaper and faster rate. Since the token has been created in a way that it always holds an equivalent value of 1 US dollar, it can be used to transfer money to anyone across the network.
- The main advantage of using USDT on the tether network is the reselling option a user gets on the platform itself. You can withdraw your USDT in fiat currency as well. However, withdrawal in the fiat currency would incur charges over bank transfer.
- USDT also help other crypto platforms to enhance their platform as due to legal bindings they cannot use fiat on the platform. This issue is where USDT comes in as a savior since the token holds an equivalent value of USD.
- USDT is a boon for new entrants in the crypto world. They can make their platform compatible with the tether. In this way, the new startups can exchange their fiat funds for USDT and keep it as a backup fund.
- The token is also said to be very easy to integrate other cryptocurrencies through a specific program. There are many such use case programs available, such as bitcoin wallet integration with the tether.
Cons
- To make purchases of USDT, one needs to provide various documents confirming the identity of the buyer before opening an account. However, the newly formed EXMO exchange provide the option to remain anonymous and does not require any specific identity confirmation.
- The value of US Dollars is not fixed, so the whole aura of 1 USD does not remain true in all senses. However, the point to be noted here is that the volatility level has never exceeded 2-3%, but still, it is not zero.
- There is no provision for public mining of tether, the company holds the sole rights of doing the same. The reason behind it still not entirely clear, but it is quite understandable as it’s not easy to maintain the fixed value against USD unless it is controlled solely by the company.
