5 Steps to Safely Buying Tether

Tether is the world’s largest stablecoin, which is a cryptocurrency tied to another asset. In Tether’s case, that asset is the U.S. dollar, so its price is usually $1. There are a few reasons to buy Tether, including:

  • The ability to lend it at high interest rates
  • Having it available to purchase other cryptocurrencies, since transferring cash to a crypto account can take several days
  • Using it as a way to transfer funds to another person

By following the steps below, you’ll be able to buy Tether safely and without paying any unnecessary fees.

1. Research Tether and its alternatives

It’s important to do your homework on any cryptocurrency you’re thinking of buying, even stablecoins.

Tether, in particular, has had some reputational issues. The company that issues it, Tether Limited, used to claim that every Tether was backed by $1. That wasn’t true, and recent information the company released on its reserves showed that only 2.9% of Tether is backed by cash.

This doesn’t mean Tether is a poor choice, but it’s worth investigating before you buy any. If you’re not sure about Tether, here are a few other stablecoins tied to the U.S. dollar:

  • USD Coin
  • Binance USD
  • TrueUSD
  • Dai

2. Pick a cryptocurrency exchange

To buy Tether, you need an account at a cryptocurrency exchange that sells it. However, many of the top cryptocurrency exchanges don’t have Tether available. Here are a few of the most popular exchanges that do:

These exchanges have excellent security and reasonable fees. If you’re new to crypto, Coinbase is widely considered one of the most beginner-friendly exchanges.

3. Make an exchange account

Exchanges generally require that you create an account first and then verify your identity. Here’s what you should expect to provide to set up your exchange account:

  • Full name
  • Email address
  • Phone number
  • Physical address
  • Social Security number
  • Date of birth
  • A scan of an ID document, such as a driver’s license or passport
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You’ll also have the option to secure your account with two-factor authentication. This security measure requires you to go through two layers of security to access your account, such as a password and a code sent to your email or phone.

Some exchanges require two-factor authentication. Whether or not it’s required with the exchange you’re using, it’s a good idea to set up two-factor authentication to keep your account as secure as possible.

4. Figure out how much Tether you’ll buy

There’s a lot you can do with Tether, and how you plan to use it will help determine the amount you buy.

If you plan to lend Tether and earn interest on it, then you may want to buy a large amount to maximize how much you earn. A large purchase also makes sense if you’re going to keep Tether in your exchange account to buy other cryptocurrencies periodically.

On the other hand, if you plan to use Tether as a way to transfer money to someone else, then you can just buy the amount you want to send them.

5. Make the purchase

Crypto exchanges usually accept one or more of the following payment methods:

Stick to bank account transfers whenever possible because these almost always have the lowest transaction fees. Purchases made with debit cards, credit cards, and PayPal tend to carry additional fees.

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Keep in mind that bank account transfers can be slower, as it takes more time for the money to reach your crypto exchange account. This isn’t a big deal, though, especially when buying Tether. Since it’s a stablecoin, you don’t need to worry about the price rising while you wait for your funds to arrive.

When you’re ready and have the funds available, make the purchase for the amount of Tether you want. The transaction should process within seconds. After that, you’ll have Tether that you can lend, transfer, or hang on to until you want to spend it.

View more information: https://www.fool.com/the-ascent/cryptocurrency/articles/5-steps-to-safely-buying-tether/

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