pctechguide.com

  • Home
  • Guides
  • Tutorials
  • Articles
  • Reviews
  • Glossary
  • Contact

The Benefits of Using Stablecoins

A stablecoin is a type of cryptocurrency with a fixed value. The value shouldn’t frequently fluctuate, which is often the case with typical crypto assets. This fixed value frequently ties to the U.S. dollar, but other currencies can fix different price indices. In some instances, Stablecoins can be fixed to precious metals (for example, silver and gold). Keeping these Stablecoins organized to maintain the value of the currency depends on the custodian. They must reserve a specific amount of collateral, so they remain equal to the value. If the Stablecoin is not attached to a specified currency, it may be linked to the Ethereum blockchain to manage the collateral.

Different Types of Stablecoins

There are currently three types of stablecoins available on the market. The fiat-collateralized stablecoin is the simplest version. These are any coin or token that is connected directly with the production and liquidation of the issuer. Essentially, proper regulation by the issuing party keeps the price stable. It honors deposits and withdrawals as required. One example of fiat-collateralized stablecoin is gold-backed crypto. Each coin is attached to a specific value of gold, keeping a consistent value over time.

Non-collateralized stablecoins are a very different design, not backed by any collateral. The country’s Central Bank would govern these coins. Finally, crypto-collateralized uses other cryptocurrencies as collateral. Unfortunately, crypto values aren’t stable. As such, sets of protocols are used to keep the stablecoin at $1.

The Benefits of Stablecoins

Lower Fees

 Currently, credit card processing hits companies with a 2% fee per transaction. The cost is prohibitive to most small businesses, barring the use of significant creditors with high prices. Stablecoins, however, offer the same benefit of credit transactions without the high costs associated.

Secured Stability

The volatility that follows cryptocurrency can be a lot. Not trading correctly can seriously impact the value of your trade, costing thousands of dollars if not done correctly. Investors will need to monitor the market closely. If an investor can’t maintain this monitoring, sticking with Stablecoins may make more sense financially. Stablecoins also protect investments during “bearish,” whereby cryptocurrencies fall considerably.

 Faster Speed

 Escrow accounts streamline financial processes attached to stablecoins. Banking and settlement with stablecoins bring transactions at all hours of the day. The blockchain operates independently of any central institution (and their business hours), bringing independence to processing.

Transparency

All transactions on the blockchain are viewable with a blockchain explorer. The process is backed with frequent auditing processes, bringing security and accessibility to the functionality of stablecoins.

Programmable

Stablecoins are fundamentally made up of code, bringing adaptability to the company’s investment. A company can change and adapt branded stablecoins to match consumer needs. For instance, Walmart has indicated an upcoming stablecoin with a built-in loyalty program. This hybrid would essentially integrate any loyalty rewards and currency into one application. With stablecoin integration, loyalty programs become a convenient customer process (through the app), standing out in the saturated loyalty market.

Secured Stability

With the added security of assets, stablecoins offer a stable entry into cryptocurrency without volatility. Unfortunately, those who have considerable access to the market (commonly called “big whales”) can bring a significant blow to crypto pricing. The average trader or investor will likely not impact the market price, making it a safe option for those wanting to invest.

How do Stablecoins Influence Cryptocurrency?

As it stands right now, 20% of all Bitcoins are owned by 448 people. That amounts to nearly 148.4 billion U.S. dollars between 448 individuals. These heavy bitcoin holders are called “whales” and will significantly impact the currency’s overall value. If these individuals converted these assets into stablecoins, the cryptocurrency’s price would enter a significant downward trend. Essentially, the pricing of cryptocurrency is directly impacted on whales. For the average user, weigh the benefits and drawbacks of stablecoin over traditional crypto before opting in.

Filed Under: Communications

Latest Articles

The Double-Edged Sword of Machine Learning in Cybersecurity

Today's most damaging threats, from phishing to ransomware, will use machine learning to analyze vast amounts of information about their victims and design more sophisticated attacks. Artificial intelligence could become the basis for more personalized and effective malware. However, these … [Read More...]

Adding Animation and Multimedia to Your PowerPoint Files

Many people are not aware of all of the features that are available with PowerPoint. There is a rich array of media features that you can use to create awesome presentations. Adding Audio and Animation Files to PowerPoint Presentations A PowerPoint slide show will be more successful if you add … [Read More...]

How To Get Two Monitors On One Computer

Sometimes while attending to multiple tasks on your computer you feel the need for more monitor space to get all your work done at the same time. So, you can get one of the dell refurbished laptops uk for back up or you can actually purchase another cheap monitor. Having two monitors on one computer … [Read More...]

Why Cross-Chain Trading Is the Future of Crypto Investing?

The rapid growth and evolution of the cryptocurrency market have opened up exciting opportunities for investors. Within this dynamic landscape, … [Read More...]

Revolutionize Your Internet Experience with Orbi 960 – The Ultimate WiFi System

In a world where seamless connectivity is essential, slow and unreliable internet connections are a major problem. Whether you are running a business, … [Read More...]

Do You Need a VPN When Trading Cryptocurrency?

There’s no doubt that the biggest global industries in 2023 are tech-driven, while there remains a significant crossover between many of these … [Read More...]

Goodbye Bitcoin: the 3 alternative cryptocurrencies that have great upside potential, according to experts

Bitcoin has been a very lucrative investment for people that got into it early. One report from The Motley Fool pointed out that $10 of bitcoin … [Read More...]

Self-driving cars face their Achilles’ heel and may be targets of hackers

The market for self-driving cars is booming. Customers spent $22.22 billion on these autonomous vehicles in 2021 and they will likely spend more in … [Read More...]

How to avoid scams with bitcoin and other cryptocurrencies

Cryptocurrencies got a bad reputation when scams multiplied like ants on a piece of cake. Even today many people associate bitcoin and other … [Read More...]

Guides

  • Computer Communications
  • Mobile Computing
  • PC Components
  • PC Data Storage
  • PC Input-Output
  • PC Multimedia
  • Processors (CPUs)

Recent Posts

Monitor Controls

Not so long ago, advanced controls were found only on high-end monitors. Now, even budget models boast a wealth of image … [Read More...]

Transfer Files From Old Computer to New Computer

When doing a PC to PC file transfer from your old computer to the new one you first need to decide on what files you need to copy over to your new … [Read More...]

Service That Succeeds: How To Build an Effective IT Service Desk

In today’s tech-forward world, building a capable IT service team is essential for businesses hoping to scale tech-related hurdles and soar past the … [Read More...]

[footer_backtotop]

Copyright © 2023 About | Privacy | Contact Information | Wrtie For Us | Disclaimer | Copyright License | Authors