In this article I will explain why this is important.
What is the USDT; Why are more people adopting it and how does it help you?
The reason it seems the price of commodities in the market seem to have increased recently – is inflation. Many developing economies are now grappling with double figure inflation, that means the value of your money 5 years ago isn’t the same. Now inflation is not always a bad thing; As a lot of companies use this opportunity to increase the price of commodities. Also, if you owe money with little interest rate over a period of time, you will appreciate inflation. However, not many people own businesses and want to be associated with debts. Therefore, let’s get to the other bad stuff inflation is known for.
What is Inflation?
Inflation is the steady rise in the price of goods and services which decreases your purchasing power over time. For example, I tried to buy a watch online for $50. I saved 10 dollars till the 5th month, only for the price to increase by $10 in that month. I experienced it first hand. The worth of my money decreased in just a few months.
I realised that during times like this,owning items (you may call digital assets) might be more valuable. Also quite surprising that depreciating assets like cars maintained their value or even increased in value.
While I have known that Cars are not advisable as assets and not everyone can save up to purchase real estate or precious metals like Gold and Silver. Every individual needs to combat inflation with small assets that can hold against. Although it is the government’s job to fight inflation and stabilise the economy, it takes a lot of economic policies which might not be implemented overnight. Hence, as an individual, there’s a need to stabilise your own economy. The process of stabilising your economy and the value of your money is called Hedging. This is where I discovered a stablecoin known as USDT.
What is Stablecoin?
A stablecoin is a cryptocurrency that is pegged against a stable asset like the US Dollar. For example the USDT, which translates 1 USDT = $1. This means it holds the same value as the US Dollar. Hence, it doesn’t fluctuate like other cryptocurrencies. This ensures stability to risk averse individuals who are hesitant on the market volatility of Bitcoin and other cryptocurrencies.
Although the value of fiat may decrease overtime as they are not backed by an asset or commodity. However, there are some fiat currencies that remain stable over time and are affected little by inflation like the US Dollar. They provide a safe haven for people in developing countries where there might be hyper-inflation affecting the economy.
Hence it is Fiat vs Fiat, but using a crypto where you can’t lay your hand on a physical US Dollar.
If you saved your income from your using USDT, you will be protected from hyper-inflation that may affect your local currency and the volatility that may affect Bitcoin.
What I have done about it
As a risk averse person I ventured into crypto by buying the USDT. I needed the value of my money to remain the same despite inflation that may take place. In previous years, I locked up my money where I got 8-12% interest per annum, but that was not enough to match the inflation that came up. Recently, I started to use the Yellow Card App to purchase USDT which ensures my money is stable and also ready to buy BTC at anytime. Quite an easy-to-use interface and swift transactions. It is available on the Google Playstore and the App Store for iOS devices.
PS: Since USDT is the equivalent of a dollar, it is widely accepted for payments
By Timothy Ukaegbu
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