Steemit Crypto Academy / S8W2 Contest - What is Stablecoin?

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Introduction

Stablecoins are cryptocurrencies whose value in the market is pegged to a reference asset such as USDT is pegged to the US Dollar and BUSD is also pegged to the US Dollar. It is not always possible that cryptocurrencies are stolen

Why are stablecoins pegged to fiat money because they will not be affected by market volatility and will remain stable at a ratio of 1:1. However, it's a possibility and we recently saw that in cash

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1. Asset-backed stablecoins:

The first type is asset-based stablecoins backed by US Dollars, fiat currency, or real-world assets like Gold. Examples of this type are USDT and BUSD which are pegged to 1:1 US Dollar.

1. Crypto-backed stablecoins:

Ada beberapa stablecoin yang tidak didukung oleh mata uang fiat tetapi didukung oleh cryptocurrency seperti Bitcoin dan Ethereum. Untuk membuat stablecoin stabil di pasar, jumlah cryptocurrency dan n

1. Commodity-backed stablecoins:

The final type of stablecoin is the commodity-backed stablecoin that is pegged to real-world assets such as gold, silver, diamonds, metals, oil or these types of stablecoins are gaining popularity due to risks.

increases, they have to issue more stablecoins to keep the price stable. It is an ongoing struggle to make stablecoins stable.

Both of these methods are widely used by stablecoin issuers issuing or issuing new stablecoins on the market. The overall result is to manage the supply in the market to keep the value 1:

We all know that stablecoins are backed by a reference asset such as the US dollar, exchange-traded commodities, other cryptocurrencies, gold, or fiat currency. To achieve stability

There are various uses for stablecoins, the first being that they allow users to store money in a stable form such as fiat currency. If we exchange fiat currency in local currency, the value gets

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1. Safe Assets

Unlike other cryptocurrencies, stablecoins have a value equal to $1 and don't change much, meaning they will always be close to $1. Maybe they changed 1 or 2

1. Transaction

The second use of stablecoins is in transactions. For example, you sent 1 BTC and the value is $19.8k and during sending, the value changes to $18,800 That means you have lost $100.

1. Remittance

Overseas people find it very difficult to send money to their homes in case of any closure or any kind of problem. In addition, sending money from one country to another costs a lot of money k

1. Trading

Fiat currency costs a lot during trading due to high fees. To cover, stablecoins were introduced which are traded in cryptocurrency pairs and at a low cost.

The most popular stablecoins in 2023 are USDT, USDC, BUSD and TUSD. All of these stablecoins are pegged to the US Dollar and are currently stable at a ratio of 1:1. They look similar but all have

1. USDC: The second most famous stablecoin is USDC which is also pegged to the US Dollar. It is currently ranked 2nd in the stablecoin category and 5th in cryptocurrency market cap k

Stablecoins are the best alternative to traditional cryptocurrencies due to a number of benefits. They help users to stay safe from the high volatility of cryptocurrencies. They were created

Stablecoins I Personally Use

I personally use and like BUSD and USDT. I haven't used any other stablecoin and last time I traded Steem also on BUSD. You can see it in the screenshot in ba

Yes, it is possible for stablecoins to lose their stability. We all know that stablecoins are designed in such a way that they have to remain stable with a ratio of 1:1 with regards to their underlying assets such as

However, it is possible for stablecoins to lose their stability. The main reason is the lack of transparency and management. For example if the issuer does not have the same reserves for its stablecoin

If stablecoins are backed by cryptocurrencies such as Ethereum, Bitcoin or others. It is also possible for stablecoins to lose their value and stability during high volatility in the market. To overcome

There have been many cases in the crypto world when stablecoins have lost their stability and value. The most famous one is USDT causing extreme panic in the market and that's it

Tether (USDT): As we know, Tether is a stablecoin pegged to the US Dollar which means it is backed by USD and the issuer keeps it stable by maintaining USD reserves. But be

Another case in point is the US Dollar-backed stablecoin DAI as well as the cryptocurrency Ethereum (ETH). In March 2021, it lost its stability during the cryptocurrency market volatility. However pe

What are the advantages and disadvantages of stablecoins compared to traditional cryptocurrencies?

Just like every thing digital and real world, there are advantages and disadvantages. As with stablecoins, there are many benefits and also there are dangers/disadvantages of using them compared to cry

Stablecoin advantages

Less Volatility is the main benefit of stablecoins. They are great to hold if you don't like high volatility in the crypto market. We usually get into stablecoins when coins crypt

Stabilitas adalah manfaat lain yang berarti stablecoin akan tetap stabil tidak peduli seberapa tinggi volatilitas di pasar kripto. Mereka lebih stabil daripada cryptocurrency tradisional.

Liquidity is increased by stablecoins over traditional cryptocurrencies on the market. The reason is that they are easy to exchange for other cryptocurrencies and fiat currency and money.

Centralized control is another disadvantage that makes it a risky cryptocurrency. This means that stablecoins are controlled by third entities that question transparency and security.

Fewer Options are available in stablecoins than traditional cryptocurrencies. This means that there are very few stablecoins and if 2-3 are released then the whole market can collapse and users are not a

Conclusion

Stablecoins are the best alternative to traditional cryptocurrencies due to a number of benefits. They help users to stay safe from the high volatility of cryptocurrencies. They were created.

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