Understanding USDT in One Article: A Beginner's Guide to Stablecoins in the Currency Circle (A Must-read for Beginners)

If you are new to cryptocurrency, you may find that people in the group often say "U". Are you a little confused? Don't worry, I will help you figure it out from scratchUSDT (Tether), so you know what it is, why it’s important, and how to use it safely. After reading this article, you are no longer a “novice in the currency circle”.

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What is USDT? Why is it called “stablecoin”?

USDT, full nameTether, the Chinese name is "Tether". It is in the cryptocurrency marketThe most widely used stablecoin.

• Simple to understand: 1 USDT ≈ 1 USD.
• Different from Bitcoin and Ethereum: It does not fluctuate greatly, but remains stable.
• reason: The issuing company Tether Limited will use cash, bonds and other U.S. dollar assets as reserves to ensure that each USDT is backed by assets of equal value.

Therefore, USDT is like the “digital dollar” in the cryptocurrency world and is the universal unit of account in the currency circle.

Why is the currency circle inseparable from USDT? Three main uses

In the process of accompanying clients on transactions and cross-border projects, I discovered thatUSDT is basically everywhere, mainly has these three functions:

① Transaction “transit station”

Most exchanges do not support the direct purchase of Bitcoin in RMB. The usual process is:

RMB → USDT → Bitcoin/Ethereum, etc.

The opposite is true when selling: Bitcoin → USDT → Chinese Yuan

👉Case: A novice friend of mine wanted to buy 0.1 Bitcoin, but couldn’t buy it directly in RMB, so he first used the OTC platform to exchange 1,000 USDT, and then used USDT to place an order to buy Bitcoin on the exchange.

② Risk-avoiding "safe haven"

When the market falls, many people will exchange volatile currencies into USDT and wait until the market stabilizes before entering the market.

👉 Just like when the stock market crashes, convert your stocks into cash.

③ Cross-border payment and transfer

USDT transfers quickly and has low handling fees. More and more people use it for international remittances or trade settlements. 👉Real case (cross-border trade in Southeast Asia): An e-commerce supplier in Indonesia uses USDT to settle with Chinese suppliers. Each transaction takes only a few minutes to arrive, and the handling fee is less than 1 US dollar, which is much faster than traditional banks.

How many types of USDT are there? Be careful about turning the wrong link!

This is the easiest pitfall for novices. USDT does not have only one version, but exists on different blockchains:

• ERC20 USDT (Ethereum chain)The address starts with0 smallInitially, transfers require ETH mining fees.
• TRC20 USDT (Tron Chain)The address starts withTTo begin with, the speed is fast and the handling fee is almost 0. Most commonly used for transfers between exchanges and individuals.
• Other versions: Such as OMNI (obsolete), BEP20 (Binance Chain).

⚠️Important reminder: USDT on different chains cannot be converted to each other. For example, if you send ERC20 USDT to the TRC20 address, the money will disappear permanently and no one can help you retrieve it!

👉Cases (real lessons): I met a newbie in a crypto exchange group who transferred 500 U of ERC20 USDT to a TRC20 address. The result was that it “evaporated” and could only be used as tuition fee.

How to use USDT safely? A must-have checklist for newbies

I compiled a copySecure transfer checklist, to help you avoid common mistakes:

• Check address: Copy and paste, do not enter manually; it is best to compare the characters before and after.
• small test: When transferring money to a new address for the first time, transfer 1-10 U first for testing.
• Confirm chain type: You and the payee must use the same chain (ERC20, TRC20, etc.).
• Reserve mining fees: If you use ERC20, you need to have ETH in your wallet to pay the handling fee; with TRC20, there is almost no need to worry.
• Use U address query tool:The risk of checking the other party’s address—LIKE.TGFree U address query tool.

Summarize

USDT is the “first step” into the world of cryptocurrency. It is not only the most commonly used pricing tool in exchanges, but also an important method of hedging and cross-border payments.

As a newbie, you only need to remember three points:

• USDT = stablecoin, anchored to the US dollar
• Main purpose = Transaction bridge/Hedging/Cross-border payment
• Be sure to confirm the chain before transferring money(ERC20/TRC20)

Understand these, and you can use USDT with peace of mind instead of panic.

[Frequently Asked Questions (FAQ) for Newbies]

Q1: Will USDT be decoupled from the US dollar?

A: There have indeed been short-term fluctuations in history ($0.97 - $1.03), but Tether will maintain stability through asset reserves and market operations. It is still the most mainstream stablecoin in the currency circle.

Q2: Is USDT safe?

A: As long as you keep the private key and confirm the chain, the transfer is safe. But the risk is mainly that the exchange goes bankrupt or you transfer to the wrong address yourself.

Q3: Can USDT and RMB be directly exchanged?

A: It cannot be exchanged directly. You need to buy or sell USDT in RMB through the OTC platform or exchange.

Q4: Which one is more suitable for novices, TRC20 or ERC20?

A: TRC20 is recommended in most cases because the handling fee is cheap (almost 0) and the speed is fast. But if you want to interact with the DeFi and NFT ecosystem, ERC20 is the mainstream.

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