Stablecoins are ‘coin’ based token’s that retain, or are close to a value. A stablecoins value may go slightly up, or under the $1 dollar remit or equivalent value and is not prone to risky volatility, hence the term Stablecoin. The Stable coin may track the dollar, but negative, or positive increase / decrease with certain Stablecoin’s is likely to be discounted on buying, or selling other Cryptocurrency (please check with the provider).
So what are Bitcoin and Ethereum if they are not Stablecoins?
Neither Bitcoin, or Etherum, are Stablecoins. The idea of a Stablecoin is to create ‘Actual monetary value’ for people who want stability, audit trails, and reliability, So the coin, or token is ‘as’ feasibly close,or equivalent to $1 dollar, or similar. Bitcoin is prone to volatility and the value is not limited.
Stablecoins are a useful resource for secure money transfer between countries. Stablecoins can be Fiat backed from a regulated third party. Some are Commodity, or Cryptocurrency based.
You still need a digital wallet, and may need to use bitcoin or other Cryptocurrencies, to transfer an amount to your chosen Stablecoin.
Couple of Stablecoins worth mentioning:
DAI – Aim to get as close to the $1 dollar trading mark as possible and currently have a Market Cap of 77.08M
PAX – Backed 1:1 for the dollar and regulated by the US NY State Department as an ‘alternative’ to the US dollar with a current Market Cap of $ 185.03M
Gemini Dollar (GUSD) – Regulated creditworthiness built on Etherum Blockchain technology. Market Cap $6,906,576M
Useful for:
- Times when you want to make a quick money transfer
- Temporary placement of funds in a stable Cryptocurrency with minimised volatility at a specific value.
All Cryptocurrency have risks. Seek financial advice if you are not sure what to invest in.
Here at ixdlab_ we can help you to understand and formulate opinions on using electronic cashless payment technologies such as Bitcoin, Ripple, XRM in your business. Look out for more on #Cryptocurrencies later on.
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