Adding to an already impressive repertoire, Tether (USDT) will now be available on the Bitcoin Cash (BCH) blockchain. The integration will allow users to trade Tether within associated applications – expanding the use-base of Tether considerably. BCH is the seventh project to host USDT. Alogrand, EOS (EOS), Ethereum (ETH), the Liquid Network (LQD), Omni (OMNI) and Tron (TRX) have all previously joined the network. Inclusion allows Tether to operate natively without requiring an external platform swap – reducing time and fees required to swap between native coins.
While the ERC20 variant remains dominant in much of the industry, these additional options grant an important level of flexibility. As the dominant stablecoin, USDT benefits from a large user-base. This is, in part, due to ease of movement and universal availability. Other stablecoins have struggled to compete due to that first mover status – while Tether continues to print additional coins to meet rising demand.
Tether’s Impact on the Market
Tether provides a vital service to the cryptocurrency world. As the first “stablecoin,” Tether provided users with a much needed safe haven in the market. Prior to USDT, traders would have to hop between cryptocurrencies in an attempt to manage their portfolio value. If the entire market started a downtrend, they would have to swap back to fiat as quickly as they can – a daunting task to this day.
In contrast, the ability to “Tether” – or trade all crypto-assets for USDT – created a risk management renaissance within the cryptocurrency market. Many investors believe that this ushered in the 2017 bubble, although the reality is murkier. Avoiding fiat gateways also furthered the decentralized and government-independent aspects of cryptocurrency as a whole.
USDT: Questionable Reserves and Stablecoin Alternatives
Yet, Tether is not wholly a beneficial entity within the space. Run by a private concern, Tether’s backing comes from a reserve of real-world assets. Whether it constitutes a full reserve against the total Tether supply remains doubtful. Tether’s operating body refuses to transparently audit the system – even getting in a spat with the New York attorney general over the matter.
Partially as a response to Tether’s questionable reserves, more stablecoins are entering the market. Several exchanges including Coinbase and Gemini created their own USD-pegged stablecoin. More inventive solutions include DAI, which pegs to the U.S. Dollar using a complex algorithm that holds Ethereum in reserve. Despite these new offerings, Tether remains the de facto stablecoin for the majority of the market.
Article By: Adam Stone