Tether(USDT) TRC20 and ERC20 are the two networks that you have come across when making transactions in USDT. In this guide, you will learn more about these two networks and their differences.
Tether (USDT) is a stablecoin; a type of cryptocurrency designed for each token to be represented by an underlying US dollar. Each USDT token is tethered to a US dollar that is held in Tether Limited’s reserve balance and can be obtained through the Tether platform. Tether has been issued on the Omni, Ethereum, Tron, EOS, Liquid and Algorand blockchains.
What are Stablecoins?
A stablecoin is a type of cryptocurrency that is pegged to other stores of value like fiat currency (US Dollar), or commodity money like gold. The idea is that the value of these other assets would support the value of the stablecoin and reduce volatility. Stablecoin can be termed as a digital version of widely accepted USD, therefore they are as valuable as the USD. The primary thing to note is that a stablecoin’s value is driven by that of its underlying currency. So, if a stablecoin is tied to the dollar, its value can’t go higher than $1. This makes stablecoin better suited for day-to-day transactions and as a store of value.
Stablecoins are cryptocurrencies designed to minimize the volatile price movement within the cryptocurrency environment by pegging each token to an underlying crypto, fiat money (fiat money is a government-issued currency i.e NGN, GHS, USD, that is not backed by a physical commodity) or exchange-traded commodity such as precious metals. Built with the same features as other popular cryptocurrencies, stablecoins offer simple transactions through existing cryptocurrency infrastructure with trustless networks using the appropriate block explorer. This enables payments requested in a particular fiat currency or precious metal and can protect recipients from sudden price changes.
Tether (USDT) TRC20
TRC20-USDT refers to USDT issued on the TRON network. TRC20-based USDT enables interoperability with TRON-based protocols and Decentralized Applications (DApps) while allowing users to transact and exchange fiat-pegged currencies across the TRON Network.
The currency deposit address is the TRON address (beginning with T), with deposits and withdrawals taking place on the TRON network. The USDT-TRON (TRC20) uses the TRC20 protocol. Tron offers faster transaction speed when compared to Ethereum. Tron is a higher-performing network. When it comes to scalability, Tron is definitely more scalable than the Ethereum network. The processing speed of Tron is higher which is a must-have for a decentralized network.
Tether (USDT) ERC20
ERC20-USDT refers to USDT issued by Tether on the Ethereum network. Its deposit address is the ETH address, with deposits and withdrawals taking place on the Ethereum network. The protocol of USDT-ERC20 is the ERC20 protocol.
The Ethereum network is significantly more decentralized than the Tron network. Hacking the Ethereum network is not possible because a breach of 3/4th of the network is required in order to do so. The USDT issued on TRC20 and ERC20 are both identical, however fees to transfer this USDT can often be cheaper on the Tron network using TRC20. There are various ERC token standards that have unique functionalities.
Difference in Two USDT Chain : Tether(USDT) TRC20 and ERC20
When making a USDT transfer, many users are presented with a choice of two different chain types that are available, at which point users may face the situation that they don’t know which chain type to choose when depositing and withdrawing. The differences between the two chain types are described in detail below.
|Address style||Begins with “0x”|
|Begins with “T”|
|Network||Ethereum (ETH) Network||Tron (TRX) Network|
|Transfer speed||Delivers within a few minutes||Delivers within a few seconds to minutes|
|Fees||35 USDT||1 USDT|
Currently, on Bitmama, we only support transfers of Tether USDT through Ethereum and Tron blockchains.
Note: Since the USDT in the two networks is not interoperable, users should carefully check if the address is correct when depositing and withdrawing. In order to avoid unnecessary losses due to wrong addresses, special attention should be paid to the different address styles of the two types of networks.
In summary, With the analysis of the two networks ( Tether(USDT) TRC20 and ERC20) above. You should be able to choose the best network for your transactions. Both platforms have a considerable amount of user base and have a lot to offer to their clients.
Like other cryptocurrencies, you need an exchange to buy USDT and a wallet to store it. Depending on the country of residence, a user can either purchase the coin using fiat or convert existing cryptocurrencies that they hold to USDT. You can buy USDT in Nigeria, Ghana, and Kenya using Bitmama exchange.
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