on the crypto
Are stable coins cryptocurrencies?
Le cryptocurrency they are one of the most interesting topics of recent years, and have involved curious and passionate people, speculators and investors. We hear more often talk about stable coin.
What is Stablecoin about?
The stable coins are also cryptocurrency, but unlike the classic cryptocurrencies like i bitcoin, they are less volatile. One of the known characteristics of virtual currencies, in fact, is their volatility and the ability to change value (increasing it immensely, but also losing it) in a short time, following the market trend.
Instead the characteristic of the stable coin is that of maintaining a price that is good or badly fixed and lasting.
The stable coins have therefore a characteristic of price stability, and for this reason they are a very useful tool to fight and protect themselves from volatility.
Like cryptocurrencies, stable coins are issued and traded on the blockchain.
Unlike cryptocurrencies, the stable coin hold their own property of value reserve and their unit of account, because they are linked to real assets, usually dollars or gold.
The growth of stable coins is a phenomenon that has occurred especially during the 2017 and 2018, e according to some analysts it will always go up in the coming years.
Stable coins are important in the virtual coin market, but at the same time stable coins do not offer attractive investments in the long term. In addition, stable coins still depend on the credibility of the issuer and, as for all cryptocurrencies, also on the security of the blockchain system.
Types of stable coin
There is no single type of stable currency. In general it is possible to distinguish between stable coins using three different types:
- coins with collateral FIAT or gold (therefore goods)
- coins not guaranteed
- coins with an encrypted collateral guarantee
Let's take some examples of Stablecoin
The uses of stable coins in reality
The stable coin can be used as a medium of exchange, but also as a means of storage of value, or as a tool for evaluating the growth of a project.
The advantage of the stable coin, which is also the limit as regards its speculation, is precisely the stability of the price if compared with other virtual currencies, which are much more volatile. Also Facebook is thinking of a stablecoin.
Stable coins, which is the translation from the English of the stable coin, are also used in the loan, insurance and derivatives market. They can be exploited in the derivatives market or for classic trading, for predictive markets, and so on.
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Compared to Bitcoin, stable coins maintain a clearer stability, and this can be said despite the fact that bitcoin is certainly the most stable virtual currency on the market today. Short-term volatility can cause uncertainty, which is why many users tend not to approach virtual currencies.
Banks, institutional users are attracted to cryptocurrencies but frightened by their volatility. In all these cases, stable coins can be very useful indeed. Wherever there is a need for a virtual currency that offers more guarantees than those of classic cryptocurrencies, in short, stable coins can be really useful.
