Hello, future Crypto Experts! In Post 1 we saw how to secure your account. Today, we are going to demystify the most important concept to start trading: the $USDT.
If Bitcoin ($BTC) is the volatile digital gold, $USDT is the currency for cryptocurrencies.
What is a "Stablecoin"?
Imagine you are in a foreign exchange market. When you sell Dollars (USD) to buy Euros (EUR), you need a stable reference point. In the crypto world, that point is a Stablecoin.
| Parity 1:1 | Ideally, 1 $USDT always equals 1 US Dollar ($1.00 USD). |
| Its Purpose | Acts as a safe haven. When the market falls and you don’t want to sell your cryptos for your bank’s money, you sell them for $USDT to 'stabilize' your capital. |
| Not Volatile | Its value rarely changes, making it perfect for buying and selling other cryptocurrencies without worrying about price fluctuations in minutes. |
🔎 Why Trust $USDT? (The Million Dollar Question)
The key for $USDT to maintain its value is the Backing (Collateral).
* How does it work? The company that issues $USDT (Tether) claims that for every $USDT that exists, there is $1.00 USD in reserves (which can be cash, bonds, or other assets) held in traditional bank accounts.
* The Risk: Trust in $USDT is based on the transparency of these reserves. Although there are debates about the audit of these reserves, it remains the stablecoin with the highest liquidity and acceptance on major trading platforms like Binance.
🌟 A Quick Look at Other Giants
Although we will focus on $USDT, you should know that it is not the only one:
* $USDC (USD Coin): It is the second largest and is considered by many to be the most transparent, as its reserves are audited more frequently. It is an excellent alternative.
* Algorithmic Stablecoins: There are other stablecoins that are not backed by dollars (but by code), but as we are starting out, it is better to focus on the safest and easiest to use!
Lesson Learned Today and Call to Action (CTA)
The USDT digital dollar gives you stability for trading. If you are ready to start, this is the first asset you should acquire!
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👉 What do you prefer? If you could choose one, would you buy $USDT or $USDC? I look forward to reading your comments!
