Grassroot Crypto Education [Vol. 2] Answers to assignment - What are Bitcoin, Altcoins and Stablecoins || 10% payout to @steemkidss
Greetings to you all. It's another another concerning crypto education and i render my special gratitude to @fredquantum for enlightening verified kids in this community about cryptocurrency, the various cryptocurrencies we have and their usefulness in the capital market. Before answering the assignment questions, i'll spotlight the word "cryptocurrency" in a jiffy. When many hear of cryptocurrency, they are less interested because of the fact that you need to trade, buy coins and the rest. Cryptocurrencies extends more than that view.
Cryptocurrency for a layman is a method of keeping and accounting records and also used as a medium of exchange where one can buy and sell digital currencies via the internet. Cryptocurrency as a whole uses digital files as money [medium of exchange ]
What is Bitcoin
Bitcoin as many may have it is a coin expressed in bits. For many, bitcoin is a just cryptocurrency. Bitcoin is not just restricted to the fact that it is a crypto or digital currency.
Bitcoin as the first cryptocurrency that came into existence in the year 2009 is the biggest cryptocurrency in the capital market and as at 5 days ago. It was worth 35,485 usd. Bitcoin is a digital currency which operates free of any central or main control even from the government itself. It is a virtual and digital currency that uses peer-to-peer technology to facilitate instant payment without involving third parties. It allows people buy and sell bitcoins using different currencies. In addition, bitcoin uses proof of work decentralize consensus mechanism for validating transactions of which are secured by crypto graphic algorithms. For the layman, bitcoin is a digital currency that allows people send and receive money via the internet even to person's you don't trust or know. It is volatile although not as altcoins.
Altcoins
They are also cryptocurrencies from the word "altcoins" where words like alternative and coins can be derived. So in essence, altcoins are alternate coins to bitcoin. it came into existence in the year 2011 as namecoin and is also a proof of work consensus mechanism to verify or validate transactions. It is a form of digital currency based on blockchain networking. Most altcoins are more volatile than bitcoin. They were launched after bitcoin's success. It records and allow transactions if only it is incorruptible.
Examples of Altcoins are
- Ethereum and
- dogecoin
- Cardano
Stable coins
is a type of cryptocurrency that eliminates the volatility feature of some cryptocurrencies. You don't need a bank account to hold stable coins and they can be sent easily around the globe and can save assets. They are digital currencies that are backed by assets such as other cryptocurrency. The first stable coin is tether. Stable coins stores value for your cryto assets as backed by another asset.
Examples of Stablecoins are
- Tether
- USD coin
- Binance USD
Do you prefer stable coins to other cryptocurrencies or otherwise?
Yes precisely. Why i say so is because stable coins as the name implies doesn't change much in value compared to others. They are also used to buy other crypto as many cryptocurrencies exchanges don't have access to traditional banking. Prices of stablecoins fluctuates very little unlike bitcoin and ethereum that is prone to ups and downs. stable coins is less volatile than bitcoins as it enable investors keep money in their digital wallet as there is no need for a bank account. They are less vulnerable to fluctuations in the market vales which is different from bitcoin where market values keeps changing. Stable coins is centralized while bitcoins are decentralized. Stable coins are used for real-life transactions while bitcoins are used for exchange trading and the likes. From the illustration of joe and jane, we can conclude that the market value of stable coins remain the same and fluctuates very little unlike bitcoin which is unstable and unpredictable. Joe stored 1 bitcoin while jane stored 35,485 usdt which is the value or symbol for stable coins for six months. After this period of time, joe's bitcoin rised while jane's USDT remained since it is a stable coin. The only disadvantage is that stable coins remains stable when it comes to increase but the advantageous aspect is that it remains stable when price of other crypto's fall.
Conclusion
Altcoins are cryptos other than bitcoin as the likes may have it. examples of altcoins are ethereum,and more. Stable coins are advantageous because their market value doesn't fluctuate and even if it does, it is minimal. And i also saw bitcoin to be the populous, first cryptocurrency in the capital market... Looking forward to doing vol.3
