Is Tether (USDT) built on the Ethereum blockchain?
Two of the biggest cryptocurrencies that rank just below Bitcoin are homophones. For quite some time, Ether (ETH) and Tether (USDT) became a source of confusion for early cryptocurrency enthusiasts. However, not only is Tether spelled differently and is an independent project, it is also not a typical cryptocurrency like Bitcoin or Ether. USDT’s value must always match the US dollar due to the 1:1 peg, making it a stable coin.
Another question that many people ask is whether Tether is based on Ethereum’s blockchain. Every cryptocurrency, including stablecoins, needs a distributed ledger to operate on. Does Tether use Ethereum’s network or does it have its own blockchain protocol? Let’s explore the Tether ecosystem to find answers and understand the core characteristics of the stablecoin.
What is Tether’s Blockchain?
Tether’s ecosystem consists of tokens, but is not an independent blockchain. In Bitcoin, Ether and other cryptocurrencies such as Solana and Cardano, the cryptocurrency comes with a built-in blockchain protocol. However, Tether is a common stablecoin ecosystem where new tokens are issued with a claim that each USDT is backed by sufficient reserves.
Tether is said to have started with Bitcoin’s blockchain as a transport protocol. Here, tokens could be moved on the Omni Layer, but soon the use of Ethereum’s blockchain was favored. In particular, Ethereum bills itself as a network for developers who want to deploy decentralized products. One such product is ERC-20 tokens, and Tether falls into the same group. In fact, it is the largest ERC-20 token by market capitalization. Tether’s ecosystem also advises users to carefully transfer tokens, as it also uses other blockchains besides Ethereum as its transport protocol.
Stated data of CoinMarketCap.com
Ether and Tether
Ether is the primary cryptocurrency of the Ethereum mainnet with the utility as the payment token. Tether, on the other hand, is not a native cryptocurrency in any blockchain protocol. It is a token that can be issued on all blockchain networks, including Ethereum, Algorand and Solana. Tether bills itself as a digital token for fast payment transfers using blockchain, with a 1:1 value peg to the US dollar.
https://www.youtube.com/watch?v=d2fmlSu8sjQ
The bottom line
Tether uses blockchain technology to support the movement of USDT tokens from sender to receiver, with both having a specific address in the network. This blockchain can be Ethereum or any other, including Bitcoin. Tether now issues tokens tied not only to the US dollar, but also to other fiat currencies, including the Chinese yuan and the euro.
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