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Tether (USDT)

Maxbit Support
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What is Tether (USDT)?

Ripple (XRP)-1.png

  1. Native Blockchain:
    • Tether originally began on the Bitcoin blockchain through the Omni Layer protocol. However, as demand increased and to facilitate faster transactions and interoperability, Tether has expanded to other blockchains, including Ethereum (as an ERC-20 token), Tron (as a TRC-20 token), EOS, Algorand, and more.
  2. Consensus Protocol:
    • Tether itself does not have its own consensus protocol, as it operates atop existing blockchains. The consensus mechanism depends on the underlying blockchain—Bitcoin's Proof-of-Work for Omni Layer, Ethereum's current PoW transitioning to Proof-of-Stake, etc.
  3. Trilemma (Security, Speed, Scalability):
    • Security: USDT's security is determined by the underlying blockchain on which it operates.
    • Speed: Transaction speeds depend on the specific blockchain, with Ethereum-based USDT transfers usually faster than Omni Layer-based ones, for instance.
    • Scalability: Again, this depends on the blockchain. Ethereum's scalability solutions, like layer 2 protocols, would benefit ERC-20 based USDT transfers.
  4. Founder / Date Founded:
    • Tether was introduced in July 2014 and was co-founded by Brock Pierce, Craig Sellars, and Reeve Collins under the name "Realcoin." It was later renamed "Tether" and started trading as USDT.
  5. Objective / Use Case:
    • Tether's primary purpose is to bridge the gap between fiat currencies and cryptocurrencies. Each USDT token is meant to be backed one-to-one by a US dollar held in reserve by Tether Limited, providing a stable value in the volatile crypto market.
  6. Total supply / Limit or Unlimited:
    • There is no preset limit for USDT's total supply. The issuance and redemption depend on the demand and are theoretically tied to the amount of USD held in reserve.
  7. Supply Deflation:
    • Tether claims to burn USDT tokens that are redeemed for USD, ensuring a one-to-one peg. The supply, therefore, can contract if more users redeem USDT for USD.

          This overview provides an introductory understanding of Tether and its USDT token. Given the ever-changing landscape of the crypto domain, enthusiasts should stay updated with the latest developments and changes in the sector.

References:

  • Tether. (n.d.). How Tether Works. [https://tether.to/how-to-use/]
  • Tether. (n.d.). Tether: Fiat currencies on the Bitcoin blockchain. [https://tether.to/wp-content/uploads/2016/06/TetherWhitePaper.pdf]
  • Tether. (n.d.). Tether Technical FAQ. [https://tether.to/faqs/#technical]
  • Tether. (n.d.). What is Tether? [https://tether.to/]
  • Tether. (n.d.). Transparency. [https://wallet.tether.to/transparency]
  • Tether. (n.d.). How Tether Works. [https://tether.to/how-to-use/]
  • The Stablecoin Trilemma — A user’s perspective - [https://medium.com/tangible/the-stablecoin-trilemma-a-users-perspective-e7ea31d84e7f]