USDT is a cryptocurrency asset issued on the Bitcoin blockchain via the Omni Layer Protocol. Each USDT unit is backed by a U.S Dollar held in the reserves of the Tether Limited and can be redeemed through the Tether Platform. USDT can be transferred, stored, spent, just like bitcoins or any other cryptocurrency, users can transact and store tethers with any Omni Layer enabled wallet like Ambisafe, Holy Transaction or Omni Wallet.
USDT and other Tether currencies were created to facilitate the transfer of national currencies, to provide users with a stable alternative to Bitcoin and to provide an alternative for exchange and wallet audits which are currently unreliable. USDT provides an alternative to Proof of Solvency methods by introducing a Proof of Reserves Process.
In the Tether Proof of Reserves system, the amount of USDT in circulations can be easily checked on the Bitcoin blockchain via the tools provided at Omnichest.info, while the corresponding total amount of USD held reserves is proved by publishing the bank balance and undergoing periodic audits by professionals.
Use Case for Individuals
USDT offers a solution for a wide range of individual investors according to their whitepaper. From day traders; to long term investors looking to store their Bitcoins securely; to tech savvy shoppers looking to avoid credit card fees or maintain their privacy; to philosophical users looking to change the world; to those looking to remit payments globally more effectively; to those in third world countries looking for access to financial services for the first time; to developers looking to create new technologies; to all those who have found many uses for Bitcoin. The main universal applications are as follow:
- Transact in USD/fiat value, pseudo anonymously, without any middlemen/intermediaries
- Cold store USD/fiat value by securing one’s own private keys
- Avoid the risk of storing fiat on exchanges move crypto fiat in and out of exchanges easily
- Avoid having to open a fiat bank account to store fiat value
- Easily enhance applications that work with bitcoin to also support tether
- Anything one can do with Bitcoin as an individual one can also do with tether
To conclude, USDT with the help of Bitcoin Blockchain strives to provide users with a price-stable asset for national currencies in a safe and transparent manner.
(Reference: okex's Blog, cryptocompare)