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Explaining stable coins, the Holy Grail of cryptocurrency

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Imagine a consumer who observes the price of Bitcoin before making a purchase.Photo by Chris Liverani on Unsplash.

A "stable currency" is a cryptocurrency that is anchored to another stable asset, such as gold or the US dollar. It is a global currency, but it is not tied to a central bank and has low volatility. This allows the practical use of cryptocurrency like paying for things every day.

Coins like Bitcoin and Ethereum and highly volatile. On a given day, it is common to see an increase of 10-20% or even a decrease. This makes the use of most cryptocurrencies for improper daily transactions. Imagine today paying $ 5 for your flat white (my favorite coffee) and finding out tomorrow that it should have been $ 4. Such price changes are shocking to a consumer. The adoption of stable currencies will be a catalyst for the new decentralized internet becoming mainstream.

An optimal cryptocurrency should have the following four traits: price stability, scalability, privacy and decentralization. Additional traits that will assist in the broader adoption of any stable currency are simplicity combined with the elegance of the concept, the easy integration points for the partners and the capacity for an exchange to work with. However, stability is the key. Short-term stability is important for transactions and long-term stability is important for maintaining.

More on Forbes: A currency issued by the state could trigger an unused potential for cryptocurrencies

There are several projects working on this problem and each has its advantages and disadvantages. Let's explore how some of the most popular stable coins are working to build the most optimal cryptocurrency.

To tie

To tie it is 100% supported by the fiat currency assets in a reserve account. The conversion rate is 1 tether USDT is equal to $ 1 USD. The Tether Platform is considered fully supported if all the batteries in circulation are less than or equal to all fiat that are in the bank account.

advantages: It is approaching an exchange similar to that of fiat a crypto, well integrated and consolidated

disadvantages: Centralized waste of revision, not without trust

MakerDao

Creator it is a decentralized autonomous organization that is anchored to the US dollar, but is fully supported by ETH. Their stable currency is Dai and each is worth $ 1 USD. Stability is maintained through an autonomous system of smart contracts. To receive Dai, you must send tokens to the Maker platform to block those tokens.

advantages: One of the first in space (First Mover Advantage), supported by ETH (which is on the blockchain and therefore transparent, unlike Tether)

disadvantages: Very complex, slow motion

Havven

Havven of the structure provides stability by building a system that supports itself with two coins. The first coin is called Nomine, which is the stable currency. This is what you would use for everyday transactions. The tokens that are in the reserve are called Havvens. A commission for each transaction completed with Nomins will return to the company. Taxes are then redistributed to Havven token holders who are rewarded for maintaining the system they support.

advantages: Completely decentralized team, fast moving and business oriented

disadvantages: Very new and therefore not tried, you may want more centralization

Basecoin

Basecoin pegging also their price at $ 1 USD. However, their approaches use the consent to contract and expand the supply of their currency. When coins are exchanged for less than $ 1, coins are traded allowing holders of coins to buy bonds. The coins used to buy the bonds are destroyed. Decrease the supply and increase the price They do the opposite to expand the offer.

advantages: Supported by major funds, developers of the Ivy League

disadvantages: Requires faith in the process of protocol-based obligations

Because cryptocurrencies become mainstream, we will need price stability. This will give users the security of making daily transactions. Full adoption of stable currencies will alleviate & nbsp; the & nbsp; fear & nbsp; having to calculate the time of your purchase with the volatility of coins like Ethereum and Bitcoin. Leave this to the traders. These ambitious projects working on stable currencies will take us to a world where cryptocurrencies will be used to buy coffee, lunch or tequila.

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Imagine a consumer who observes the price of Bitcoin before making a purchase.Photo by Chris Liverani on Unsplash.

A "stable currency" is a cryptocurrency that is anchored to another stable asset, such as gold or the US dollar. It is a global currency, but it is not tied to a central bank and has low volatility. This allows the practical use of cryptocurrency like paying for things every day.

Coins like Bitcoin and Ethereum and highly volatile. On a given day, it is common to see an increase of 10-20% or even a decrease. This makes the use of most cryptocurrencies for improper daily transactions. Imagine today paying $ 5 for your flat white (my favorite coffee) and finding out tomorrow that it should have been $ 4. Such price changes are shocking to a consumer. The adoption of stable currencies will be a catalyst for the new decentralized internet becoming mainstream.

An optimal cryptocurrency should have the following four traits: price stability, scalability, privacy and decentralization. Additional traits that will assist in the broader adoption of any stable currency are simplicity combined with the elegance of the concept, the easy integration points for the partners and the capacity for an exchange to work with. However, stability is the key. Short-term stability is important for transactions and long-term stability is important for maintaining.

More on Forbes: A currency issued by the state could trigger an unused potential for cryptocurrencies

There are several projects working on this problem and each has its advantages and disadvantages. Let's explore how some of the most popular stable coins are working to build the most optimal cryptocurrency.

To tie

Tether is 100% supported by fiat currency assets in a reserve account. The conversion rate is 1 tether USDT is equal to $ 1 USD. The Tether Platform is considered fully supported if all the batteries in circulation are less than or equal to all fiat that are in the bank account.

advantages: It is approaching an exchange similar to that of fiat a crypto, well integrated and consolidated

disadvantages: Centralized waste of revision, not without trust

MakerDao

Maker is a decentralized autonomous organization that is anchored to the US dollar, but is fully supported by ETH. Their stable currency is Dai and each is worth $ 1 USD. Stability is maintained through an autonomous system of smart contracts. To receive Dai, you must send tokens to the Maker platform to block those tokens.

advantages: One of the first in space (First Mover Advantage), supported by ETH (which is on the blockchain and therefore transparent, unlike Tether)

disadvantages: Very complex, slow motion

Havven

Havven's structure provides stability by building a system that supports itself with two coins. The first coin is called Nomine, which is the stable currency. This is what you would use for everyday transactions. The tokens that are in the reserve are called Havvens. A commission for each transaction completed with Nomins will return to the company. Taxes are then redistributed to Havven token holders who are rewarded for maintaining the system they support.

advantages: Completely decentralized team, fast moving and business oriented

disadvantages: Very new and therefore not tried, you may want more centralization

Basecoin

Basecoin also adds their price to $ 1 USD. However, their approaches use the consent to contract and expand the supply of their currency. When coins are exchanged for less than $ 1, coins are traded allowing holders of coins to buy bonds. The coins used to buy the bonds are destroyed. Decrease the supply and increase the price They do the opposite to expand the offer.

advantages: Supported by major funds, developers of the Ivy League

disadvantages: Requires faith in the process of protocol-based obligations

Because cryptocurrencies become mainstream, we will need price stability. This will give users the security of making daily transactions. The complete adoption of stable coins will ease the worry of having to calculate the time of your purchase with the volatility of coins like Ethereum and Bitcoin. Leave this to the traders. These ambitious projects that work on stable currencies will take us to a world where cryptocurrencies will be used to buy coffee, lunch or tequila.

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