Stablecoins are a convenient instrument not subject to the high volatility of cryptocurrencies. Increasingly, users are turning to tokens like USDT (Tether) for conducting payment transactions.
Whilst stablecoins are more convenient to use than "traditional" cryptocurrencies, novice users still encounter difficulties when resolving technical issues – particularly when selecting a suitable blockchain. We explain which networks Tether operates on, how USDT ERC20 differs from USDT TRC20, and how to accept payments in this coin.
USDT: What You Need to Know
Tether (USDT) is a stablecoin issued by the eponymous company. Unlike ordinary cryptocurrencies, its value is pegged to a real-world asset – the US dollar. The issuing company holds reserves backing the value of all tokens in circulation. Thanks to this, price stability is maintained: the value of one USDT token equals one USD. Although minimal price deviations are permissible, they typically do not exceed $0.002.
This stability makes the token a convenient instrument for storing assets and making payments. Cryptocurrency technologies enable rapid execution of financial operations worldwide with minimal commission. Using a stablecoin for this purpose simplifies the conversion of the value of goods and services.
USDT tokens are issued across several blockchains. These include Ethereum, TRON, BNB Smart Chain, TON, Omni, and Polygon. For a novice crypto holder, understanding how USDT ERC20 differs from USDT TRC20 and other standards can be challenging. This choice affects the token's availability on various services and platforms, the size of commissions, and the speed of transaction processing. Let us examine the most popular options in greater detail.
USDT ERC20 Standard
USDT ERC20 is USDT on the Ethereum blockchain. Users choose it due to the following advantages:
· Access to numerous platforms and services: The Ethereum Network ecosystem is one of the largest in the crypto market. The ERC20 standard is supported by the majority of wallets, exchanges, and DeFi applications.
· Ready integration with dApps: Many decentralised applications and NFT platforms were developed for ERC20 tokens. This provides users access to a range of major crypto projects.
· Decentralisation and security: Many users select Ethereum due to its low risk of attacks and forks.
Cons of USDT ERC20 Tokens include:
· Higher fees compared to other blockchains: Although Ethereum, like other crypto networks, charges low commissions compared to fiat transfers (on average – no more than $1–2), several blockchains offer more advantageous terms. You can compare the size of fees across different networks on this website.
· Network congestion and associated delays: Ethereum is one of the most popular blockchains, leading to high congestion. As a result, transaction processing speed can reach up to 10 minutes.
USDT TRC20 Standard
USDT TRC20 belongs to the TRON blockchain – a network developed for creating decentralised applications and exchanging entertainment content. The blockchain was created as a more scalable and faster alternative to Ethereum.
Users choose USDT TRX and TRC20 due to several advantages:
· High speed of operations: The network's throughput reaches 2000 transactions per second. This is convenient for businesses utilising USDT TRC20 payments and smart contracts.
· Access to smart contracts and dApps: Ease of working with decentralised applications was one of the primary goals behind the launch of the TRON blockchain.
It is also important to consider the disadvantages of this standard:
· High transaction costs: This issue is relevant during periods of peak network load: commissions can reach $5–7.
· Lesser prevalence: When choosing between TRC or ERC, one should consider that TRON tokens are supported by fewer platforms and services.
· Centralisation: The TRON blockchain is more centralised than Ethereum, which reduces its reliability in the eyes of many crypto users.
USDT BEP20 Standard
USDT BEP20 operates on BNB Smart Chain. This network was developed by the Binance cryptocurrency exchange for issuing and managing the platform's internal tokens (BNB).
The BEP 20 standard attracts users thanks to several Pros:
· Low commission size: Typically, the cost of operations on BNB Smart Chain does not exceed $1.
· High processing speed: The network has an optimised architecture designed for rapid transaction execution – transfer confirmations occur almost instantly.
· Access to the Binance ecosystem: The platform includes a range of services for trading, exchanging, and managing crypto assets.
The minuses of this standard include:
· Centralisation of the blockchain: BNB Smart Chain belongs to Binance. Although the network is positioned as decentralised, the number of validators within it is limited. This makes it less independent than other blockchains.
· Requirement of BNB for commission payments: The fee for processing operations is charged exclusively in the BNB token, which can complicate making transfers.
USDT on TON
TON (The Open Network) is a blockchain launched relatively recently (between 2019-2021). Initially, the network was developed by the Telegram team, then transitioned to independent developers.
Conducting operations on this blockchain offers the following advantages:
· Low commissions: The average cost of transfers rarely exceeds $1.
· High performance: Thanks to its sharded architecture, TON offers users high transaction processing speed. In this parameter, the blockchain is a record-holder in the crypto market, surpassing the threshold of 100,000 operations per second.
· Integration with Telegram: Despite the transition to an independent team, TON maintains close ties with the messenger: from payment bots to the built-in crypto wallet.
Simultaneously, the network possesses several Cons:
· Relatively limited infrastructure: Despite its rapid development, TON is a sufficiently new blockchain. Currently, it cannot offer users an ecosystem as extensive as other popular networks.
· Limited support on crypto platforms: Not all exchanges, wallets, and services support operations with USDT on TON.
Criteria for Selecting the Suitable USDT
Different versions of USDT possess their own advantages and disadvantages. When choosing, it is recommended to consider the following parameters:
· Cost of operations: The lowest commissions are offered by the TON and BNB Smart Chain blockchains, where the cost of operations rarely exceeds $1. Ethereum charges approximately $1–2. In TRON, commissions are highest and can reach $5–7 during periods of high network load. You can find out the prevailing commission for transferring USDT in popular networks on this website.
· Processing speed: The highest transaction confirmation speed is offered by TON. BNB Smart Chain also processes operations almost instantly. Transferring TRC20 tokens may take about a minute, whilst in the case of ERC20, waiting times can reach up to 10 minutes. You can compare transaction processing speeds on various websites, for example, here.
· Universality and support: Access to the broadest ecosystem is offered by ERC20 tokens: Ethereum's popularity enables the use of nearly any exchange and wallet. TRC20 tokens are less widespread but are also accepted by many services. Using BEP20 is relevant for working with the Binance ecosystem, whilst operations via TON are suitable for making payments within the Telegram messenger.
· Security: Ethereum has earned the greatest trust from users – it is the most decentralised blockchain of the four. TRON and BNB Smart Chain feature a higher degree of centralisation, and TON raises doubts for some users due to its relatively short history.
Operations with USDT
Novice users may find it challenging to choose between TON, BEP, ERC, TRC: the difference between USDT of various standards is sufficiently non-obvious. It is recommended to focus on one's goals and priorities. Thus, the greatest security and universality are offered by ERC20, the lowest commissions by TON and BEP20, and the maximum processing speed by TON and TRC20.
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