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Cryptoknowmics 2022-04-16 06:15:18

What Bitcoin’s Lightning Network Means for Tether

For those unfamiliar, Tether (USDT) is a U.S. Dollar stablecoin. It exists outside the current financial system and is transferred over cryptocurrency networks. Tether is centralized because a firm that maintains a reserve of USD and other assets (including bitcoin) manages it. They back each Tether 1:1 with a USD counterpart. For years, the U.S. government has been after Tether. This is because they have successfully run outside of the regular system while supplying people worldwide. All of this is to imply that people would only hold Tether if it were necessary to conduct a transaction. Having said that, there is little question that Tether is in high demand throughout the world. More so, as people try to avoid the short-term bitcoin’s price volatility. Many users in developing countries don’t have the luxury of sitting back and stomaching bitcoin’s rollercoaster price changes. So, they store some of their holdings in stablecoins. By doing this, they do not have to worry about not being able to purchase what they want when they want to spend. Leveraging on the Omni Layer Protocol What’s remarkable about Synonym’s Tether implementation on Lightning Network is that it uses the Omni Layer protocol. Tether’s first introduction was to this protocol. As on-chain fees rose in the subsequent years, there was a shift from Tether usage to other chains. The reason for this was to take advantage of their lower fees. Since then, it’s bee...

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