Cryptocurrencies are inherently volatile. But certain crypto assets retain their designated value over time – stable coins.
Stable coins are the ‘stable’ versions of their wild crypto counterparts. They are pegged to state-backed fiat currencies and sometimes to commodities like gold or oil.
Tether (USDT) is a fiat-collateralized stable coin. It is said to be 100 percent backed by the US Dollar in a 1:1 ratio. It is quite popular amongst bitcoin and cryptocurrency traders/investors.
But, USDT’s path to popularity has been quite an adventurous one. So, let’s dive in and try to understand it in detail.
History of Tether
In the beginning, there was no Tether, but Realcoin, the brainchild of Bitcoin Foundation boss Brock Pierce, entrepreneur Reeve Collins, and software developer Steve Collins. The company set up shop in Hong Kong and the Isle of Man.
Realcoin rebranded to Tether in the very same year and became associated with cryptocurrency exchange Bitfinex (also based in Hong Kong).
Bitfinex opened trading for USDT in January 2015 and since then the stablecoin has not looked back.
In 2017 Tether rose to prominence as the total USDT supply grew from $7 million to $320 million in just seven months.
The exponential growth in Tether’s supply continued throughout the 2017 bull market as bitcoin and cryptocurrency traders, leveraged USDT to enter crypto markets in large numbers.
USDT reported a 5X growth in circulation from $440 million to $2.3 billion in November 2017 to January 2018 window!
6 years after inception, Tether boasts of leading the cryptocurrency market wrt daily trading volumes. Also, the USDT supply figure has appreciated to the $10 billion mark.
How Does Tether Work?
Tether exists as a 1:1 currency peg for the US Dollar, Euro, and the Offshore Chinese Yuan . These fiat currency-backed stablecoins are essentially digital tokens that represent the value of their underlying assets.
They function just like their other cryptocurrency counterparts and move value on their respective blockchains.
Speaking of blockchains, Tether tokens operate on the Bitcoin (Omni and Liquid protocol), Ethereum, EOS, and Tron blockchains.
Tethers existing on these blockchains are like applications that leverage the open-source software of these decentralized networks for supply and issuance of tokenized real-world currencies.
All Tether stable coins are backed by reserves of the company. As per the official website:
The Tether Platform is fully reserved when the sum of all tethers in circulation is less than or equal to the value of our reserves.
Source: Tether FAQs, www.tether.to
Tether initially came up as a fiat-currency tokenization application idea on the Bitcoin network through the Omni protocol. But in recent times, Tether has found more success using Ethereum as it’s ‘transport protocol’.
One can now access smart contracts and decentralized applications on Ethereum using USDT.
Applications of Tether
Tether, most importantly USDT provides digital asset market participants with the best of both worlds – USD exposure and speed and security of cryptocurrencies.
Also, USDT makes BTC and crypto trading super convenient. And that’s why it is the most popular USD stable coin (yes, there are more) and the 4th most popular cryptocurrency in the world.
USDT can serve as the perfect medium of monetary exchange between individuals and institutions without the interference of banks and third-party financial organizations.
Recently, Tether announced the launch of Tether Gold (XAUT). Owning a XAUT stable coin translates to owning one ounce of physical gold, from the yellow metal stash located in a vault in Switzerland.
Currently, XAUT functions as a smart contract token on the Ethereum and Tron blockchains.
How to Buy Tether (USDT) Cryptocurrency Stablecoin in India?
WazirX has garnered the reputation of popularizing Tether usage in India with the best USDT to INR conversion rates.
As an alternative to the usual INR deposit and withdrawal mechanism, we launched the world’s first USDT based P2P transaction portal to let crypto traders and investors sort out transactions swiftly and with convenience.
To buy USDT through WazirX, you need to register on the platform first, then finish a super quick KYC process and finally deposit funds for the purchase. Here’s how it goes:
Step 1: Account Creation
- Download the WazirX app or visit the website. Then hit the Sign-Up button
- Fill in your email address (one that you use frequently), and your desired password
- Click on the Terms of Service checkbox, but go through it once before checking
- Then press the Sign Up button
- You will be sent a verification email after hitting the sign-up button. If you have received it, click on Verify Email to complete the process. If you haven’t, check your spam folder. Or hit Resend Here. On successful verification, you should see this message:
Securing Your Account
For security purposes, we highly recommend enabling 2-factor authentication (2FA). You can do so by downloading the Google Authenticator app and connecting it to your account.
The last stage in the account set up process is KYC verification. Select your country from the list:
Then verify your KYC and finish the process. After that, you are all set to buy USDT from WazirX!
Step 2: Depositing Funds
You can deposit INR funds from your bank account to your WazirX account via UPI/IMPS/NEFT/RTGS.
Just submit details like bank name, account number, IFSC code, etc of the bank account with which you wish to transact, and then you are good to go.
In case the INR deposit is rejected, check out the WazirX support page for such issues.
Depositing cryptocurrencies into your WazirX account, either from your wallet or another exchange is an effortless process. It’s also free – with no fees charged on any deposit!
Start by obtaining your deposit address from your WazirX wallet. Then, share this address on the ‘Send Address’ section of your other wallet for transferring your cryptocurrencies.
For more details, check out the WazirX Support page on depositing cryptocurrencies.
Step 3: Buy USDT with INR
With all the necessary steps covered, you are now ready to buy USDT with your deposited funds. Here’s the process:
Log on to the WazirX app or website to view the latest USDT/INR prices.
On the app, press the USDT/INR price ticker. After that, scroll down a bit, and you will find the BUY/SELL button amongst the ‘Charts’, ‘Orders’, ‘Trades’, and ‘My Orders’ options at the bottom.
Enter the INR amount with which you want to buy USDT. Note that this amount should be less than or equal to the INR funds deposited in your WazirX account.
Hit BUY, and wait for the order to execute.
Once the transaction is executed, you should find the USDT bought added to your WazirX wallet.
Also you can download the app and Start Trading Now!
Android App – WazirX – Buy Sell Bitcoin & Other Cryptocurrencies
iOS App – WazirXDisclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.