Come with me and learn about stablecoins
If you come to read my publications, and I hope you do, you will know that the previous one was about the crypt coins we won on this platform. To use them as examples and to be able to make understand in the first line why we won two types, and above all to make clear that it is one and that it is the other. Previously I explained what an altcoin is, and made the introduction to what a Stablecoin is.
But, let's continue with this topic and understand what it is specifically about and what it is for.
STEEM DOLLARS
Let's start with the first thing, define what a stablecoin is:
" This new type of crypto-currency are 'tokens' that are associated with the value of a 'fiat' currency (such as the dollar or the euro), with material goods such as gold or real estate, or with another crypto-currency.”Fuente
The same name says it, stablecoin, the intention for which they were created to serve as a refuge. That is, I have already defined what volatility is, and when volatility is present, one way to support investors' money is through these stable currencies. Example
If you have 1000 steems, and each one is worth 0.2 dollars, that means you have 200 dollars. Volatility can cause that price to rise precipitously or fall equally. If it goes to 0.10 or 0.05 your capital will decrease considerably.
So, if you can foresee that for some reason the altcoin value is going to collapse, you can back up your capital in the stablecoin, i.e. change those Steem to Steemdollar, and if the price drops a lot, you are not affected by the capital. Of course, this is in theory, because it has been seen that the value of stablecoin can also fall, but it is very rare that it is in a higher percentage than altcoin. That is, always look for a way to be in a value close to the dollar (in this case in question). This is the reason why in a certain way they can serve as refuge in some cases.
In a quite general way I can say that this is a STABLECOINS, that's the function of these.
I hope you all have been left with a little clarity or a better idea of what they are and their importance within the world of cryptomontages.
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@thank you for the support @elgranpoeta
As the name suggests, stablecoin is a crypto asset whose value is based on the value of physical objects whose prices are stable such as gold, commodities or the United States dollar. This is a global currency, but it is not tied to a central bank and has low volatility. This allows for practical use using cryptocurrency like paying for goods every day.
Yeah, anchored to something physical that can be more stable than altcoin.
Very good concept, I think it complements very well the information I've brought to share.
Thanks @block.token
Nice!!
Stablecoins would have been a very good addition to the crypto space. But the manipulations surrounding its printing and distribution is very outspoken and it appears to be toxic to the whole industry.
I suppose at some point something else will be created, so that we can minimize that volatility that surrounds crypto.
I hope so.
Thank you for your comment @joelagbo
I think we are still awaiting the time when true value of stablecoins will be realised. I absolutely believe that the crypto-sphere is evolving and until it decides 'who it is' we will see much volatility of the type we have become accustomed to.
They can play a solid role in taking steps toward the 'holy grail' of mass adoption which I think we would all agree is the ultimate aim. The upcoming global financial instability as economies around the planet begin to calculate the immense fiscal cost of Covid 19, should see people taking a much deeper look at cryptocurrency in general.
Until fear from the public at large begins to disappear due to the mainstream media spreading FUD regarding crypto-investment we will not see the move that is necessary.
Crypto is still in it's infancy but should make great leaps in the coming decade. Thankyou for sharing your insights my friend :)
I totally agree that cryptography is in its infancy, totally.
The world economic scene is pretty bad these days. I also think it's a good scenario for a massive adoption of cryptomonies.
There's definitely a need for more momentum. I think governments, as we know them today, are in serious trouble. I hope that the world will wake up in this respect to the importance that blockchain and crypto currencies could have in terms of their application in different aspects and that they will be able to see all the good that could be obtained from them.
It's a matter of time, thanks for your valuable commentary friend @stevenwood
It is important to have this kind of information because at some point we will give you useful information, as you always say in order to keep or try to keep our capital as stable as possible! Many users who are starting to make life on the platform do not know that they can handle coins in this way. Thank you for the information!