The plain reply to "How does usdt work?" starts with what a stablecoin promises. USDT, the ticker of the Tether token, is a stablecoin: a crypto token built to hold a steady value equal to one unit of a major traditional currency. Players use it to move money into and out of casinos without the daily price swings of bitcoin. What USDT is, how it works, whether it is safe and how people get it are distinct questions, and each has an honest answer with its own limits.
What is USDC? It is another reserve backed stablecoin, issued by a different company from the one behind USDT. The difference between USDC and USDT lies mainly in the issuer, in how each discloses its reserves and in where each is listed. Both publish reserve reports with different detail and different levels of outside checking, and both have faced criticism. For a casino payment the gap is narrower: the cashier must accept that exact coin on that exact network, and USDC sent where USDT is expected can be stranded.
What are stablecoins? They are crypto tokens designed to keep a fixed value against an outside asset, usually one unit of a traditional currency. The most widely used stablecoins, USDT and USDC among them, are backed by reserves that a company holds. Others are backed by other crypto locked as collateral, and some, called algorithmic stablecoins, try to hold their value through code alone. Several algorithmic coins have collapsed completely in the past, so the kind of backing tells a reader most of what could go wrong.
How does USDT work? An issuer, Tether, creates new tokens when clients deposit traditional money and destroys tokens when clients redeem them. The issuer says each token is backed by reserves of cash, short term government debt and other assets, and it publishes regular reports on them. Redemption at full value is offered mainly to large verified clients; everyone else trades USDT on exchanges at whatever the market pays, which usually sits very close to the peg. The tokens live on public blockchains, so USDT can be sent like any other coin.
Further questions
Why keep person to person deals inside the platform?
Inside the platform the coins sit in escrow and disputes can be raised; a deal finished outside it has no protection at all.
Can USDT lose its value?
Yes, in part: during a crisis the price can slip below its intended level, and well known stablecoins have traded below it for hours or days.
Why must the network match on both sides of a USDT transfer?
The same coin runs on several networks, and coins sent on a network the receiver does not support can be stranded.
Who publishes reports on USDT reserves?
The issuer publishes periodic reports on the cash, short term government debt and other assets it says back each token; ordinary holders cannot inspect the reserves themselves.
How do people usually buy USDT?
Through a regulated exchange that checks identity and takes card or bank payments, or through a person to person deal held in escrow inside an exchange.