According to the researchers, the E-stablecoin would derive its value from the electrical consumer. Minting a single coin would require the input of 1 kilowatt hour plus a tax. Once minted, it could be used to transfer value, just like any other stable currency.
Alternatively, you could burn the digital asset to get the same amount of energy used to mint it. For example, you could mint the digital asset in an area with low-cost energy and then burn it where energy is more expensive.
Specifically, the whole process would be made possible by smart contracts running on a decentralized data storage cloud. This would eliminate some of the physical infrastructures for the transmission of electricity, that is, power lines and power grids.
The researchers found the idea feasible as the price and demand for electricity are both highly stable. Furthermore, minting energy would be quite sustainable, allowing for both minting and value transactions. The research report looked at the latter, specifically how cryptocurrencies get their value.
For now, the researchers say their design's viability is based on proof of concept. E-Stablecoin is the first of its kind, they note, as it is anchored to a physical asset.
However, to be released as a functional product, the stablecoin would require improvements in "speed, transfer entropy and scalability of information engines". Also, it would require better cloud storage or a superior replacement.
As innovative as it is, the research also raises several questions and concerns. For example, how power generation plants would benefit from it and what its weaknesses are.
As the implosion of Earth unfolded, it became clear to many that algorithmic stablecoins have some level of blame. With the billions lost in the fiasco, it is expected that the Investors analyze other stablecoins more carefully.
Regarding the diversity of stablecoins, Ripple and Stellar are partnering with payment giant Novatti to create an AUD face value stablecoin. The structure is similar to that of Tether (USDT) and USDC, but rather than being backed by the US dollar, it is backed by the Australian dollar. The digital asset will be used to enable the transfer of value to payment company customers. In addition to remittances, the stablecoin will also be used as a means of payment in the merchant sector.
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