What is USDT?
USDT is a stablecoin or stable cryptocurrency created by the company Tether. A stablecoin is a cryptocurrency that maintains a fixed value concerning a high-value fiat currency, a crypto asset, or some commodity. A stablecoin will keep the relationship with which it was created. That is the main difference of stablecoins with the rest of the cryptocurrencies whose volatility is practically its nature. In the case of USDT, the company Tether has created it with a 1: 1 parity against the dollar.
What does it mean?
That 1 USDT will always have a value equal to or very close to 1 $ USD. Besides, the name of USDT comes from uniting USD (financial symbol of the dollar) with T (of Tether). However, the implications of creating a stablecoin are many, and Tether has created a vast ecosystem around it. This creation has allowed Tether not only to evolve as a company but at the same time, demonstrate the transformative potential that USDT can bring to the world.
Why was this cryptocurrency created?
Now, surely you are wondering how useful a cryptocurrency can be worth the same as the dollar, especially if we have the dollar and electronic payment options that use that currency. Well, the truth is that a stablecoin like USDT makes a lot of sense if we consider the following: It does not limit you when making a transfer. USDT enjoys all the advantages of a standard cryptocurrency so that you can send USDT anywhere in the world without significant problems and with low fees. It allows exchanges to maintain a high degree of liquidity and protection against the high volatility of cryptocurrencies. It offers a means to protect investments from traders within an exchange platform. For example, a trader can carry out cryptocurrency purchase and sale operations, and at the end of his operations, he can convert his balance into USDT. That way, you protect yourself against the fluctuation of cryptocurrency prices until you trade again. It offers a secure payment platform in terms of volatility, since the cryptocurrency always maintains its value of one dollar, making it ideal for payment systems where volatility is not desirable, but you want to use a cryptocurrency.