Cryptodollars Tether USDT - instructions for beginners

8 Apr 2022

In 2015, an unknown company, Tether Limited, issued its own token, undertaking to exchange it for real US dollars at a rate of 1 to 1. At that time, this crypto asset was profitable to use:

Cryptocurrency exchanges in order to avoid the requirements of the Regulators for the verification of traders depositing accounts in traditional currency (fiat);
American investors, so as not to pay taxes on every exchange of cryptocurrencies for fiat.

Traders can now safely use Tether USD without worrying about a possible scam. Moreover, USDT issuance tracking allows traders to see when big capital cryptocurrencies enter the market.

The release of any token is public information available through the blockchain explorer programs, whose statistics are analyzed by various specialized services. Notification about large tranches of Tether USD, as well as other cryptocurrencies, can be received, for example, through the notifications of the Whale Alert channel.

The extent to which the USDT emission is related to the Bitcoin rate is demonstrated by the historical graph of stablecoin capitalization. So these tokens began to be called at the end of 2018, when the first competitors appeared, repeating the economic model of Tether.

Tether USD can be used to pay for goods, replenish bank cards, get a loan, or invest in DeFi services in order to receive interest on a deposit. Moreover, the USDT token is ideal for Forex traders to deposit and withdraw funds.

Choose Token and Wallet

Before replenishing an account or withdrawing a deposit in USDT cryptodollars, a trader needs to decide on the type of token format. Behind each of them is a blockchain, where the size of the commission is determined by miners who collect transactions into blocks.

The fees are floating, depending on the load and bandwidth of the network blocks, the amount of the transaction does not matter. A trader can transfer one dollar or a billion for the same amount of deductions to miners.

At the time of writing, the average translation costs are:

• In the OMNI protocol - $28;
  
• Ethereum blockchain - $12;
  
• Blockchain Tron and Binance - about $1.
  

Tether, for its part, makes an equal bet on Ethereum and Tron, placing about $24 billion of USDT emission there. The Omni protocol is practically abandoned.

The list of wallets must be taken on the website of the developers of the cryptocurrency that the trader has chosen.

The crypto wallet has a seed phrase - a set of words that helps the user regain access to his deposit from any device. Knowing this phrase of 12 words, you can not be afraid of any force majeure, because the cryptocurrency is not stored in the wallet, but in the blockchain.

A seed phrase is a list of random words (12, 18, or 24 words) used to recover your funds in case you lose your password to your wallet application or the device on which your wallet is installed. The seed phrase is usually generated when you set up your crypto wallet

By the way, the first Tether USD transaction can only be seen in the browser; in order for this balance to be displayed in the wallet, USDT will have to be added manually, this feature is explained by thousands of types of digital currencies on the Ethereum blockchain.

Upon receipt of tokens from a broker, they can be withdrawn to any popular electronic wallet or bank card, if the account has:

• ETH cryptocurrencies for the ERC-20 format;
  
• TRX cryptocurrencies for the TRX-20 format.
  

The last very important point is the network commission. The purchase of ETH and TRX is necessary just to pay for it. USDT tokens, like any other asset in the ERC-20 format, cannot be withdrawn from the wallet without a fee to miners, which is charged in gas.

The only problem is that when exchanging USDT for fiat, the trader will have to pay a commission to the miners. Many wallets set it to the maximum bar. We check the average fee here and fix it manually in the wallet, this applies to the ERC-20 token. In the case of TRC, the commission is almost always quite low, up to $1.

Deposit in USDT

The account replenishment operation is no different from the above procedures. Having decided on the stablecoin format from the list supported by the forex broker, the trader must start by choosing and opening a crypto wallet.

Some beginners aim to simplify this process by sending USDT directly to the broker's address via an exchange. It is worth remembering that the broker requires the deposit address to match the withdrawal address, which in the case of an exchange will be random.

Similar problems will arise when trying to replenish a deposit in the Forex market directly from a cryptocurrency exchange. She also uses random addresses for output. Address permanence can only be guaranteed by these companies for accepting payments, not for withdrawals.

Having opened his own wallet, the trader must receive USDT on it, and then transfer it from his address to a brokerage account. The problem is that the last operation will require payment of gas, therefore, you will have to replenish your wallet in two cryptocurrencies - ETH (TRX) and USDT.

So, to work with Tether ERC-20, we first need to buy Ethereum, and then exchange part of Ethereum for Tether USDT.

Sincerely, R Linda!