Stabilcoins or cryptovolta with stable rate
All users familiar with cryptov currencies are aware of their significant disadvantage as a means of payment. We are talking about high volatility, extremely unstable rate. In practice, this leads to the fact that literally in a few days or hours up to 50% of the invested funds can be lost. This fact makes it difficult to use cryptov currencies even as transit currency for online exchangers.
However, there is a project aimed at solving this problem - stelecoin. In this article we will consider this issue.
What are steblcoins?
Stablecoin is a new type of cryptovoltaic currency, which has fixed volatility. In translation, "stable" means "stable" and "coin" means "coin". Simply put, a stable coin is a stable cryptovoltaic currency, whose rate is not subject to such rapid changes and remains practically at the same value for a long time. This allows them to be used as ordinary means of payment - for buying goods, paying for services or even paying wages or pensions. There are also such global projects to implement these payment systems.
Another fundamental difference of Stablecoin is the presence of actual value assurance. For example, this role can be played by the national currency of a state, or oil, precious metals, gems, and other valuables. Collateralization can be carried out using any practical asset. The main requirement is its liquidity. If we classify by type of collateral, there are currently 3 types of staplecoins on the market - fiat, crypto and non. In the first case, they are secured with fiat money, in the second case - with cryptov currencies, in the third case - with no collateral.
The availability of collateral goes against the principles of Bitcoin, which openly states that the cryptovrency is absolutely unsecured. Some analysts are convinced that this is an advantage. However, the result is already evident - extremely high exchange rate volatility. It is this fact that pushes most companies away from deep integration of cryptov currencies into payment systems.
Classification of stemcoins by type of security
We have already pointed out that there are three types of Stablecoin - fiat, cryptic and unsecured. Let's look at each of them in more detail.
Fiat-collateralized. This is a widely used security scheme in the financial world. In practice, it looks like this. Each unit of stablcoins is a receipt with an obligation to have a bonded collateral in the form of a specific amount of any currency (e.g. dollar or euro). Simply put, a certain amount of fiat money is taken as collateral, the amount of which should be equal to the number of stablcoins issued. An example can be given for understanding. Conditionally speaking, 1 Stablecoin equals 1 USD. To buy it, a user will have to pay 1 dollar. It is also possible to make a reverse exchange at any time - getting $1 back by giving 1 Stablecoin.
Features of Stablecoin with fiat security:
It is necessary to perform a regular independent audit to check if the amount of collateral corresponds to the number of issued cryptographic units. There is no "economic bubble".
Availability of centralization, since the real collateral is concentrated in the third party. This increases the risk level for investors.
Strict regulation by government agencies. Deep integration into the real economy necessitates clear compliance with the norms and rules established by law.
Crypto-collateralized. Here the scheme is similar to the one described above, but another cryptographic currency - Bitcoin, Etherium, Ripple, Lightcoin or any other cryptographic currency - is taken as collateral. The advantage of this approach is independence and decentralization of the system. However, in contrast to the fiat stelecoins, a lower rate stability is fixed here. Significant changes in the market capitalization of the collateralized cryptovoltaic currency also lead to Stablecoin's exchange rate fluctuations, although they are much less pronounced.
Non-collateralized. Stablecoin without actual collateralization. What distinguishes them from ordinary cryptov currencies is the use of the method of maintaining exchange rate stability at the expense of senorage. However, this approach requires constant growth and increase in the output of cryptovolta. Otherwise, the rate cannot remain fixed. Potentially unstable volatility is the main disadvantage of unsecured stealthcoins. Therefore, their development prospects are very doubtful - unlike the first two options.