In the past few hours, the stable digital currency "Tether" has reached $ 50 billion in market value.
This marks an impressive milestone for the controversial stable digital currency.
It is worth noting that the market value of the coin "Tether" has grown in record time from 30 billion dollars in February to approximately 51 billion dollars at the time of writing this article.
As it is known, Tether is expanding its presence in the digital currency, Tether, to be present in various and diverse blockchain networks, but the most prominent networks supporting USDT, which are popular with users, are Tron and Ethereum.
Recently the number of Thether on the Tron blockchain exceeded that of the Ethereum blockchain by more than $ 1.6 billion.
Why?
As a reminder, "Tron" is a blockchain platform that is accepting to build on, and works similarly to Ethereum, meaning that "Tron" uses smart contracts, decentralized applications "dapps" and digital wallets, but the blockchain relies more on the field of "entertainment".
The vast majority of activity on BlockchainTron takes place in gaming and gambling applications, according to a "DappRadar" report released in February 2020.
Tether is a stable digital currency pegged at a 1: 1 ratio to the US dollar, which means that the currency's value is designed to remain stable.
However, there is some controversy over whether Tether is truly backed by US dollar reserves, as the company's reserves have never been independently audited, and it recently settled a fraud investigation with the New York State Attorney's Office.
Despite the controversy, the stable digital currency Tether has managed to attract and enjoy great popularity, especially in Asia, according to Chainalysis.
Where the "USDT" cryptocurrency is still the most traded there by a large margin.
The digital currency stablecoin sees heavy use for a number of reasons as being useful in trading platforms, as trading pairs pegged to tether are a popular way to set prices in fiat currency, such as the dollar or the yen.
At the moment, more USDT is used on the Tron blockchain than on Ethereum.
Ethereum is in some ways a victim of its success, as the network is used by many people, which has made it run slowly.
In order to conduct transactions on Ethereum, one needs to pay a "gas fee" which is the variable cost of using the network, which goes to the decentralized group of people who help keep it running.
And with so many people using Ethereum, the cost of conducting transactions is high.
Therefore, users switch to the Tron network.
Jeremy Ong, head of commercial operations at crypto research firm Delphi Digital said:
Ethereum has been really expensive due to the high gas prices.
By comparison, the Tron mesh is very cheap in similar uses.
Ong added that the transfer of Tether from one trading platform to another is very common, and doing so on the Ethereum blockchain is costly.
So users do it via BlockchainTron, and pay much less.
He went on to explain:
The USDT Tether is used primarily for transfers between trading platforms.
Ong also told that this would be temporary.
Where he continued by saying:
I consider TRON to be an auxiliary solution for the convenience of traders in the trading platforms.
So far, we are still waiting for the Ethereum expansion solutions to gain network impact and be adopted among the central trading platforms.
The Ethereum expansion solutions that Ong refers to relate to Ethereum 2.0, which carries a long-planned upgrade to the Ethereum network that it hopes to solve existing network problems, such as soaring costs.
Until that works, cryptocurrency traders will likely continue to put their billions elsewhere.