Crypto Academy Week 6 Homework Post for (yohan2on) - Stable Coins

Hello, Steemit Crypto Academy Community,

I continue to attend the new week courses. My homework today belongs to professor @yohan2on. I read the professor's week 6 course, started my research, and now I'm writing my homework.

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Stable Coins

After the emergence of cryptocurrencies like Bitcoin and Ripple, it was decided that something was missing in this industry. The price of Bitcoin and XRP was constantly changing. It was either getting too high or falling too much. It was a nice thing that cryptocurrencies went up, but what about falling constantly? Yes there was a problem there. Some people thought that cryptocurrencies with constant prices should be produced.

Some circles did not strongly accept this. Because this was against the spirit of cryptocurrencies.

Tether was established in July 2014. When it was first established, it was called Realcoin. After 4 months, the name was changed and it was decided to be named Tether. After Tether, many stable crypto currencies emerged. These are cryptocurrencies like Steem Backed Dollars (SBD), USDC, DAI, Binance USD, Terra USD, PAX.

Now I will write a research article about Tether among these stable crypto coins.

TETHER
As I mentioned above, Tether was known as Realcoin when it first entered the market. Later, the name was changed.

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Tether, the largest of the stable coins, is pegged to the US dollar. So 1 Tether is 1 US Dollar. When this situation is heard for the first time, it can be met with surprise, but there are logical reasons why it is $ 1. Tether Ltd is established in Hong Kong. It also has an office in Switzerland. On March 16, 2021, when I wrote this article, Tether's market value was $ 38,676,234,727. In recent days, another $ 100 million Tether has been printed.

Many users compare Tether to casino chips. Because even though casino chips are not currency, they represent a certain amount of money.

Structure and mode of operation of Tether

When Tether was first produced, it began to be produced on the Omni protocol. Omni is a Bitcoin based cryptocurrency platform. Later, after Bitcoin's price increased, it became very costly to produce Tether on the Omni platform. It is also produced on the Ethereum network, but it is very costly to produce Tether there as well. Recently, Tether has started to be produced especially on the Tron network because the transaction fee and the speed of transactions are quite efficient compared to other networks.

Networks where Tether is produced are Solana, Tron, Omni, EOS, Ethereum, Algorand, Liquid Network, and Bitcoin Cash. On other networks in the future. Because they prefer networks where users will pay less transaction fees and transactions are faster.

Tether's advantages

Since the Tether price is fixed to the dollar price, it means that you will make your transfer transactions in dollars. If you transfer dollars via bank, you will pay a lot of transfer fees and your transfer will not happen immediately. When we make a transfer with Tether, we pay a very low transfer fee and our transaction is processed instantly. Transfer Tether on the Tron network and experience how fast it happens.

Tether price is constantly fixed, it will save you from unpredictable losses. For example, imagine you bought Bitcoin yesterday for $ 60,000. Bitcoin price today is $ 54,000. In this case, you would lose $ 6,000. However, it is not possible for you to lose money in Tether. If you buy $ 10,000 Tether today, you can still sell it for roughly $ 10,000 tomorrow.

Disadvantages of Tether

When Tether first appeared, they announced that they kept 1 US dollar in their vaults for each 1 USDT they produced. However, it turned out much later that this was not the case. From the very beginning there have been transparency problems.

Tether goes against the spirit of cryptocurrencies at some point. Because Tether is not decentralized. It has a company that it is affiliated with, and new Tethers are constantly being released by this company. The most striking aspect of crypto coins was privacy. It is emphasized that when you visit Tether's website, you need to provide account confirmation to buy and sell Tether.

Doubts about Tether

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Tether and the cryptocurrency exchange Bitfinex are linked. Although both are not organically linked, they are managed by the same people. It is said that the fund belonging to customers who lost 750 million dollars in Birfinex was provided by income from Tether. They were sued for this and agreed with a $ 20 million fine.

A large number of Tether was launched during the Bitcoin bull run in 2017, and there are allegations that the Bitcoin price was manipulated. This claim remains strongly in the middle.

Is Tether Mining Done?

Tether does not have its own network. It is not mined as it is produced on other networks. Tether-related transactions take place on other networks. However, if you stake Tether in some exchanges, you have the opportunity to earn income. In some decentralized exchanges, you earn income because you contribute to the liquidity pool. As you contribute to margin transactions in some stock exchanges, you have the opportunity to earn income.

Cc:
@steemitblog
@steemcurator01
@steemcurator02