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But for those who believe in a future where a cryptocurrency can sit side by side and work with traditional money like the pound and the dollar (known as fiat currency), there is an alternative that is gaining momentum as a popular choice – stablecoins. Unlike dozens of cryptocurrencies apparently shattered by violent market fluctuations, the value of the stablecoins corresponds to that of something tangible – like the US dollar or gold – to which it is linked. Stablecoins have survived extensively over the years, but as bitcoins stumble and stumble, the spotlight is moving away from the main player and towards something with less risk. The principle is quite simple.
The underlying asset of a stablecoin is held in a trustworthy bank, so it can be redeemed for the currency to which it is anchored.
This means that the price of money should not, technically, fall below the value of the asset.
A fan of the stablecoins is the author of the United Kingdom and expert on the crypt Thomas Power.
He believes that the move to encrypt cryptocurrencies to something with a constant value provides the right platform to give cryptography a future in world finance.
He said: "Stablecoins are certainly a future, but I would not say that they are THE future because I think freedom of choice has a huge role to play in the way we treat our financial resources for years to come.
"You want to see an environment where people have the opportunity to use it or rather than depend on one."
Dr. Greig Paul, an academic of blockchain and cryptocurrency at the University of Strathclyde, is in agreement.
He said: "We have seen bitcoin fall dramatically from a maximum of nearly $ 20,000 this time last year to something currently around $ 3,400.
"Of course, this sort of unpredictability makes it absolutely understandable that many cryptocurrency users would like to look for something with greater stability."
But while both experts believe that bitcoin volatility may have people turning to options such as stablecoin, Mr. Power wisely suggests that it is a little too early to write the original cryptography.
He said, "Throughout the board, cryptography is down 80%, but people forget that Amazon was launched in 1997 and then fell 90% by the end of 1998.
"Projects must be built, capital must be built, people must be recruited.
"Just look at Amazon now, compared to that catastrophic fall of 1998. "
It is also worth noting that the stablecoins – for all the faith that their faithful followers have in them – do not always do what they say on the tin.
One of the most popular among the stablecoins – Tether – became involved in controversy at the start of this year when he discovered he did not have enough reserves to keep him pegged to one against the US dollar.
At one point, the token was trading at 92 cents per dollar that was designed to speculate.
Dr Paul said: "As a solution for short-term volatility stablecoin is a very interesting option, provided they are backed by something that will maintain a stable value such as gold, the US dollar. or even the British pound in the future.
"What it will not do, however, is the loss of confidence, particularly if the value of the reserve asset is challenged in support of what is essentially a bill of exchange.
"The price of this stablecoin will probably fall if the possibility of redeeming the currency is at risk, which is why the whole premise of acceptance is largely based on one thing: trust".
