Bitcoin price changes very quickly.The price of cryptocurrencies is very fast changing in general, not only bitcoin.In one hour the price can change drastically.
The quick change of price is called volatility. High volatility coins are not suitable to be means of payment. They are good to be store value coins. Can you imagine what is the value of pizza with 10,000 btc today? This is one of an example that using bitcoin and other coins with high volatility are not suitable for payment. The pizza seller earn high profit today but the pizza buyer made million USD lost.
Stable coins are the answer of the volatility. What is a stable coin?
Stablecoins are cryptocurrencies designed to minimize the volatility of the price of the stablecoin, relative to some "stable" asset or basket of assets. A stablecoin can be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities. wikipedia stablecoins
Stable coins are usually pegged to 1 USD. There are some stable coins in the marketplace.
Tether
Tether with symbol USDT is the pioneer a stable coin. Though, tether made controversial because the company was alleged to manipulate bitcoin price. Tether price is pegged to $1 has become the most used trading pair asset in exchanges.USDC
USD coin with symbol USDC is a stable coin. It is issued by centre consortium. The consortium consists of Coinbase, Circle and other companies. The official website is centre.io.Usdc is pegged to $1. Every unit of this cryptocurrency in circulation is backed up by $1 that is held in reserve, in a mix of cash and short-term U.S. Treasury bonds.TrueUSD
TrueUSD is issued by trusttoken.com.
TrustToken describes TUSD as “the first regulated stablecoin fully backed by the US Dollar.”
https://coinmarketcap.com/currencies/trueusd/
- DAI
DAI is a unique coin. It is not backed up by USD but the stability is based on mechanism in smart contract. DAI is created on Makedao Protocol that runs on ethereum blockchain. DAI stability is backed up by cryptocurrencies in maker dao protocol.
the Protocol allows any user to deposit their crypto into a so-called vault — a smart contract on the Ethereum blockchain — as collateral and mint a corresponding amount of new DAI tokens.
https://coinmarketcap.com/currencies/multi-collateral-dai/
- PAX
Paxos standard is digital dollar. Paxos company is audited company that issue pax coin. Pax is the answer of volatility issue of cryptocurrencies. The price of pax is pegged to $1. Pax coin is ERC-20 token created on ethereum network.
PAX is stable. It is backed 1:1 for the dollar and it’s issued by the Paxos Trust Company, so the funds are carefully protected, audited and regulated.
Paxos.com
- AMPLEFORTH
Ampleforth is created on ethereum network. The symbol is AMPL. AMPL is elastic coin. The price will always close to $1. When the market price down, Ampl smart contract will burn the coins automatically and the number of tokens in every wallet will reduce. The burning coins will influence the supply of the coin in the market. Then the smart contract will adjust the price to $1 or even slightly higher. This mechanism is called rebasing. When the price exceed $1 the mechanism in smart contract then will mint new coins and will effect to all wallet holders. That is why AMPL is called elastic coin. The official website is Ampleforth.org.
Stable coins bridge fiat and cryptocurrencies
FUD or fear uncertainty and doubt often spreads on cryptocurrency communities. FUD will influence the price. Some issues cause FUD in cryptosphere. It is a kind of bad news on coins so the coin users will be in panic buying or selling. Stable coins will encounter FUD because the stability of the price. Retailers, shopping sites and businesses can accept stable coins as the change of fiat.
International trading need fast and quick remittance to reduce the cost. There are million small businesses and enterprises that have no access to international banking. This condition is an obstacle to trade internationally. Unbanked enterprises and small enterprises can use stable coins as the means of payment. They will also feel secure with the value of the assets in stable cryptocurrencies.
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Very Informative thanks for sharing.
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YOU ARE WELCOME
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tether is very useful with all the trading pairs available
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yes, though there is a controversial issue
yeah i can't argue with that
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