The following is a contributed article from a content partner of Benzinga
Cryptocurrency is all the rave these days, and with good reason. With Elon Musk recently announcing that Tesla invested $1.5 billion of its cash into Bitcoin, crypto is gaining a whole new level of recognition.
But the most widely used cryptocurrency is one you won’t often hear talked about in popular media. In fact, it’s a token that holds a large part of the crypto industry together, and it’s called Tether.
Tether, formally known as USDT, is a stablecoin, which is a cryptocurrency whose market value is pegged to some external reference that is deemed stable. In Tether’s case, that’s the US dollar. The market capitalization of USDT is one of the largest in the cryptosphere, and it obliterates all other cryptocurrencies in terms of daily trading volume – including Bitcoin.
Incredible Growth Thanks to TRON
Much like fiat currencies such as the USD, GBP, or EUR need specific networks for global transactions, stablecoins like USDT are transferred using various blockchains.
USDT transactions take place on networks like Ethereum (ETH), Algorand, EOS, Liquid Network, Omni USDT, and most notably, TRON (TRX). TRON is a public blockchain as well as a secure digital currency that acts as a medium of exchange and powers the TRON blockchain network. It’s also most often compared to Ethereum.
Over the past year, USDT has seen explosive growth thanks to the TRON network. As a result of the fast network speed, low fees, and built-in scalability, users have moved over to TRON in droves as it becomes the network of choice for USDT transactions. The market cap of USDT that sits on TRON has ballooned to $10.6 billion in 2021, up from $900 million in 2019, and as fees continue to rise on the Ethereum network, this number looks set to grow.
Why Is Tether So Important?
One of the biggest criticisms of cryptocurrencies is that they are highly volatile, exposing investors to risks not often found in traditional markets. However, stablecoins like USDT solve this issue altogether because they are built with stability baked in.
Tether was created to combine the benefits of cryptocurrencies – unrestricted, highly secure, and fast movement of assets without the use of a trusted third-party intermediary – while maintaining the benefits of the US dollar, a stable value currency.
That means crypto investors can transact in US dollar equivalents across borders easily or choose to convert digital assets to USDT to avoid periods of high volatility in the crypto market – all while enjoying low transaction fees.
One of the first stablecoins ever launched on a blockchain, USDT is also the most widely used. USDT transactions on the TRON network have exceeded transactions on the Ethereum network every single day in 2021, and the way things are looking, that train isn’t slowing down anytime soon.
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