Stablecoin Vs Bitcoin www.bitdeal.net
BITCOIN Bitcoin is the ďŹ rst digital currency developed by Satoshi Nakamoto in 2008. Bitcoin and Ethereum are the most popularly used cryptocurrencies. The exchanges of this type of virtual currency are encrypted and decentralized.
STABLECOIN
The headlines of the crypto market in recent months has the word "Stablecoins". Stablecoins are also digital currencies developed to minimize the volatility of the price. These are cryptocurrencies that are pegged to the value of any cryptocurrency, ďŹ at currency, or trade commodities or any other commodities.
STABLECOIN Vs BITCOIN Stablecoin is a cryptocurrency that has non-volatility price and Bitcoin is a cryptocurrency whose price is volatile in nature. The concept of stablecoins is introduced only to minimize the price volatility of Bitcoins. Bitcoin is one of the most popular cryptocurrencies whose price rise and fall simultaneously which makes traders wait for the right time to exchange their Bitcoins. Stablecoins whose value merely equal to any ďŹ at currency and doesn't change accordingly helps in the exchange of them anytime by the stablecoin
TYPES OF STABLECOIN As discussed earlier, Stablecoins are designed with the non-changeable price of any assets. Here let us look at the types of stablecoins. There are three types of stablecoins as follows : 1. Fiat-collateralized 2. Crypto-collateralized and 3. Non-collateralized 4. Commodity-collateralized
TYPES OF STABLECOIN Fiat-Collateralized Stablecoins This type of stablecoins are those which undergoes the pegging process to ďŹ at currency or real-world assets such as US Dollar, Euro, Yen or Pound. Crypto-Collateralized Stablecoins Crypto-collateralized stablecoins are one which is backed to some cryptocurrencies. This stablecoins maintain their 1:1 ratio through over-collateralization.
TYPES OF STABLECOIN Commodity-collateralized stablecoins Some stablecoins are backed to precious metals such as Gold, or any other metals or commodities such as oil are known as non-collateralized stablecoins. This type of stablecoins is also called Commodity-collateralized stablecoins. Non-Collateralized Stablecoins The stablecoin that is not backed by any assets but use algorithms to adjust the supply or demand of the stablecoin is known as Non-Collateralized Stablecoins
Real-World Applications of Stablecoins 1. As a day-to-day currency 2. In streamlining P2P payments and recurring 3. Affordable and Fast remittances for migrant workers 4. Protection from local currency crashes 5. Improved cryptocurrency exchanges Explore here why Stablecoin is becoming popular than Bitcoin