The Ultimate Tether (USDT) Cryptocurrency FAQ for 2022 (2024)

Tether is a US Dollar backing that runs on top of other cryptocurrencies. USDT-Omni runs on top of the Bitcoin Omni protocol. USDT-ERC20 uses Ethereum tokens. USDT-TRC20/USDT-TRON uses Tron. USDT-EOS uses EOS.IO. Tether uses existing cryptocurrency infrastructure to implement an electronic currency backed by fiat-currency.

Tether uses the existing infrastructure of Blockchain based cryptocurrencies. Blockchain based cryptocurrencies like Bitcoin, Ethereum and Tron group transactions into blocks, then link the blocks together cryptographically. The chain of blocks, the blockchain, is stored in the cloud of decentralized nodes, the data distributed as peer-to-peer shared files. A new transaction is created on client software and broadcast to the other nodes.

Tether is a stablecoin built on top of existing cryptocurrency infrastructure, like Ethereum Tokens. A stablecoin is a cryptocurrency backed by an asset or other currency. In this case, Tether is backed by US Dollars. Hence the symbol 'US Dollar Tether', USDT. Via exchanges or Tether.io, USDT tokens can be cashed out to US Dollars. Tether is traded on bitni.com.

Tether was created by Brock Pierce (and a few others), who was also involved in the founding of another cryptocurrency, EOS.IO. Tether was an early Stablecoin, a cryptocurrency backed by an external asset. In this case, Tether is backed by US Dollars (there is also a EuroTether and a YenTether). Tether Holdings Limited is the organization behind Tether.

Tether is used for anything the US Dollar is used for - buying, selling, donations. But Tether can also be used for all of the same things cryptocurrency can be used for: A means of transferring funds that cannot be shut down by governments or the banking system. Also storing up wealth that cannot be confiscated.

Tether is a stablecoin, a cryptocurrency backed by an external asset. The US Dollar is the asset backing Tether. As long as the US Dollar has value, and Tether can be redeemed for US Dollars, Tether will also have value - Tether has as much value as the US Dollar. However, the US Dollar is a fiat currency. History has shown most fiat currencies have finite lifespans.

There is no theoretical maximum supply of Tether. It is tied to the US Dollar: 1 Tether = 1 USD. If Tether Holdings Limited can keep acquiring dollars to back their stablecoin, they can keep creating more Tether, one for each dollar they hold. So there is no limit on how many Tether there can be, as long as each is backed by a US Dollar.

Tether transactions work like any other cryptocurrency - after all, Tether is built on other cryptocurrencies. A Tether Omni transaction is a Bitcoin transaction. A Tether ERC-20 transaction is an Ethereum transaction. The addresses and balances for Tether are stored on top of the blockchains of other cryptocurrencies. A Tether transaction is created by a user on their client software, then broadcast out to all the other nodes and becomes part of the Blockchain.

Tether uses the blockchains of other cryptocurrencies like Bitcoin and Ethereum tokens to store transaction data. The blockchain is a public record of all transactions by all addresses. However, an address is just a number - it doesn't reveal anything about the identity of the one using it, like an IP (internet protocol) address can. bitni.com has maximum anonymity - we don't ask for personal details.

Tether itself is not minable. However, the blockchains that Tether runs on can be mined - Bitcoin and Ethereum. Mining is the process of adding new blocks to the blockchain, which rewards successful miners. Tether itself is tied to the US Dollar - The US Dollar cannot be "mined" from a cryptocurrency tied to it. Thus, there is no way to mine new Tether.

When Tether was designed, being taxed was not one of the goals. If no one reports their Tether gains, there is no way an authoritarian regime can know which user gained what. However, centralized exchanges which force the user to go through registration and KYC do likely report their user's Tether balance to tax authorities. If you want to be free from authoritarian regimes, you need an accountless exchange that doesn't ask for your Identity - bitni.com is the best exchange in this regard.

Tether ATMs allow a customer to buy the cryptocurrency by inserting physical cash, like a vending machine, or send Tether to the machine to receive physical cash. (The former are called "1 way" ATMs and the latter are called "2 way".) If the Tether ATM is from a trusted manufacturer and operator, it should be safe to use. Different ATMs have varying AML/KYC requirements, some fully anonymous, some not.

Tether has scaled to be one of the largest cryptocurrencies by volume. Tether uses the blockchain infrastructure of other cryptocurrencies like Ethereum and Bitcoin to implement it's own functionality. Tether can move to a different blockchain if scaling ever becomes an issue. Cryptocurrency is software, and software can evolve over time to scale.

Anyone who knows the private key can create a transaction with the balance at an address, moving the funds somewhere else. If the private key is not known, it's not possible to spend the coins at an address. Tether stored in the wallets of a centralized exchange can be stolen - it happens all the time. At a Non-custodial exchange like bitni.com, you are in charge of your wallet at all times.

Tether running on the Bitcoin network was hacked once in it's early days, but Tether Holdings Limited simply created a fork that reversed the theft. The cryptocurrency infrastructure Tether runs on, such as Ethereum and Bitcoin, is extremely robust. The blockchain is decentralized across thousands of nodes, and the more decentralized nodes, the more secure the whole. However, centralized Bitcoin Cash exchanges are hacked all the time! That's why you need a non-custodial exchange like bitni.com.

A public ledger of peer-to-peer shared files distributed across thousands of independent nodes, stores the data of all Tether transactions. Each node possesses a complete copy of all transaction history, making the system highly redundant and resilient. While network of distributed nodes contains the balances of all addresses, each user's total Tether holdings are also kept track of by their wallet.

A Tether wallet manages all of the user's Tether addresses and private keys. The total balance of a wallet is the sum value of all of the addresses in a wallet, which are automatically added up. Centralized exchanges store the user's wallet on their servers, which is risky. Non-custodial exchanges like bitni.com do NOT store user's wallets, which is much safer.

Tether is used around the globe by millions of people for all the same things as any other money is used for - buying, selling, and donations - and the number of users is growing rapidly. In some places Tether is easier to buy with fiat than other cryptocurrencies. Thus it is used as an intermediary for converting between fiat and other cryptocurrencies. Anyone needing to transfer value across borders outside the grasp of authoritarian regimes, will find Tether useful.

Tether is bought in many places where other cryptocurrencies are more difficult to acquire. Once fiat has been converted to Tether, it can easily be converted to other cryptocurrencies, at exchanges like bitni.com. Cryptocurrencies in general are accepted by many charities, web hosts, domain registrars, some restaurants, and (especially online) merchants.

Cryptocurrency as a technology is the future because it is a technical improvement over the current financial system. Sending money from one bank account to another on the other side of the globe is a slow, expensive chore. The transfer costs are ridiculous, the identity verification is intrusive, the process is slow and tedious. Cryptocurrency sends money around the globe fast, cheaply, and anonymously. Tether is a hybrid between crypto technology and fiat backing.

The average cryptocurrency has wild price swings. There is always a buzz around popular cryptos whether they will crash or reach some astronomical value. Stablecoins are different - their value is tied to fiat currency. Fiat currency loses and occasionaly gains value, but not as wildly as crypos. Tether is not supposed to crash or go up in value - and generally will not unless the backing US Dollar crashes or goes up in value.

Tether is only worth as much as the US Dollar, therefore Tether is only as good or bad an investment as the Dollar. The question is then not whether Tether is a good investment, but whether the US Dollar is a good investment. The stability of the Dollar is a plus in the cryptocurrency world. A Dollar-backed stablecoin can be a safe haven from the wild price swings of other cryptocurrencies.

Tether is bought and sold at exchanges, which convert one type of fiat or crypto currency to another. There are several kinds of exchanges: Centralized Exchanges store the user's holdings on their servers, like a bank, and require identity verification. Non-Custodial Exchanges such as bitni.com are a quick and easy way to trade cryptocurrencies without registering an account.

Many Centralized exchanges have intrusive user identification policies, such as submitting a scan of passport or other state-issued documents. Decentralized exchanges may require less identification from users, especially if the transactions are taking place in-person. Non-custodial exchange bitni.com does not require users to identify themselves for crypto-to-crypto swaps. If you want Tether without SSN, this is the place for you.

KYC is an acronym for Know Your Customer. Many regimes in the world have become increasingly totalitarian towards cryptocurrencies and try to limit anonymous trading, by requiring the customer to upload sensitive documents demonstrating their identity. Many exchanges have given in to the politicians demands and now have strict KYC policies. Most Centralized exchanges have some form of KYC, so do some Decentralized exchanges. bitni.com has no KYC requirements for crypto-to-crypto swaps.

Gold was money for millennia, and might continue to be an alternative form of money for the foreseeable future, although incredibly crude and cumbersome. Tether is a hybrid of fiat currency and cryptocurrency technology. Unlike Gold, it can be sent anonymously over the internet in minutes, which is a huge advantage. History has shown that fiat currencies have a finite lifespan. History has also shown that even seemingly "democratic" and "constitutional" regimes have confiscated and/or outlawed the possession of Gold. In that case, cryptocurrency might be the better choice for avoiding confiscation.

Most investing in cryptocurrencies is done by the investor buying it directly from exchanges and usually storing it in their own wallet. However, Cryptocurrency Exchange Traded Funds (ETF) exist. Some funds invest in only one cryptocurrency, others invest in a basket of many, to offset risks. It may be more convenient for an investor to simply buy into a fund, than manage multiple cryptocurrencies and wallets themselves. Some of these basket funds may be currently holding Tether.

Tether is a Stablecoin, a cryptocurrency tied to some external asset or currency, which means it is supposed to have a constant price in that currency. Tether's value is tied to the US Dollar. In theory, 1 Tether will never equal more (or less) than 1 US Dollar. Tether is not supposed to "reach" a higher price in dollars, but remain a constant price in US Dollars. It may however change price in other non-Dollar currencies.

A Tether transaction time is how long it takes to send an amount from one address to another. Because Tether uses the infrastructure of existing cryptocurrencies, the transaction time is that of the underlying platform. Tether transactions using the Bitcoin platform take 6 levels of blocks generated in 10 minutes each, thus 60 minutes. Tether transactions using the Ethereum platform take 20-30 levels of blocks generated in 15 seconds each, thus 5-7.5 minutes. Whatever cryptocurrency platform Tether is used on, that is how long a transaction takes.

Cryptocurrencies having a totally decentralized blockchain can process a transaction in however long it takes to generate a block. But for a transaction to be irreversable, it needs more levels of blocks after it. These are known as confirmations. Tether is built on existing cryptocurrency infrastructure, so however many confirmations the underlying platform needs is however many Tether needs. Tether using the Bitcoin protocol needs the same number of confirmations as a Bitcoin transaction, 6. The same applies to all other cryptocurrency platforms Tether is built on.

The transaction fee of Tether is the cost of adding the data of a transaction to the blockchain permanent record. Because Tether is running on top of existing infrastructure of other cryptocurrency platforms, the cost of sending it is the cost of a transaction with the underlying platform. Tether built on the Bitcoin network costs a Bitcoin transaction, same for Tether built on Ethereum tokens.

Tether uses the existing blockchain infrastructure of other cryptocurrencies. Transactions are value transferred among addresses, kept track of by the underlying cryptocurrency which Tether is built on. Blocks are lists grouping together transactions for easier verification and distribution throughout the network. The blockchain is a chronological series of blocks, each cryptographically linked to the previous.

Tether uses the addresses of existing cryptocurrencies. An address is a character sequence associated with a value representing Tether coins. In cryptographic terms, a cryptocurrency address is simply a Public Key, which are generated from a Private Key. Anyone with the Private Key can "sign" a transaction to the Public Key it is paired with. Anyone with the Public Key can verify a signature. Signing a transaction authorizes a transfer of value stored at the corresponding Public Key address, to a new address.

Tether runs on the networks of other cryptocurrencies. A cryptocurrency network is a connection of nodes, in most cases decentralized and peer-to-peer, which process and validate transactions. In fully decentralized networks, anyone anywhere can run their own node and join, sometimes earning a small fee as a miner or stakeholder. Any node can process transactions into blocks, which are included the blockchain according to consensus. Voting is usually determined by proof-of-work or proof-of-stake.