A Detailed Dive Into Stablecoins #006
Hello great minds,
I trust you are all doing perfectly fine and you are enjoying your activities in the community.
Today is another beautiful day and I am very happy to come before you all to discuss on an issue of great importance in the cryptospace.
And I am approaching this community happily and with a humble heart and soul.
In our past discussion, we leant about stablecoins and then we moved into the types of stablecoins and there we examined fiat-collateralized stablecoin.
Under fiat collateralized stablecoin, we discussed it's challenges and types, all of these which can be seen in our last post.
Today, we shall continue our discussion on fiat collateralized stablecoin but we shall be making explanation of key fundamental terms used in our just concluded articles.
FUNDAMENTAL CONCEPTS OF FIAT COLLATERALIZED STABLECOIN
For the sake of those that were confused at one point or the other in our discussion due to the fact that they don't understand some basic terms we used in our discussion, fear not, for I am here to make everything clear to you all.
Please continue on this journey with me as we examine key concept needed in the understanding of fiat collateralized stablecoins.
- CRYPTOCURRENCY:
Cryptocurrency can be explained to be digital assets or virtual form of cryptocurrency that makes use of cryptography for it's security.
Cryptocurrency operates on a decentralized blockchain network which implies that it's activities is free from the interference of a central authority.
The operation of cryptocurrency ensure transparency and Immutability of transactions made.
The transparent nature of cryptocurrency operation implies that all the activities of cryptocurrency is openly seen by everyone and is not hidden from the view of other individuals.
The Immutable feature of the blockchain technology implies that it's transactions cannot be undone.
That is, when a transaction is recorded on the blockchain, it cannot be changed nor altered.
- STABLECOIN:
The term stablecoin is another Important term that needs to be understood for proper assimilation of fiat collateralized stablecoin.
Stablecoin can be explained to be a type of cryptocurrency that is specially designed to counter the volatility rate of cryptocurrency.
It does this by having it's value pegged to a fiat currency.
It is no news that cryptocurrency in general is highly volatile and this means that there is a great fluctuations in price of cryptocurrency assets.
Stablecoin on the other hand was created to facilitate cross border transactions and reduce the volatility nature of cryptocurrency.
CONCLUSION
It is very important that we gain understanding of some key terms in the crypto ecosystem.
This terms will help aid our understanding of the operation of a fiat collateralized stablecoin.
Please join me as we shall continue our discussion later.
Thank you, friend!
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https://twitter.com/JuecoYoung/status/1706240572652913059
It is a great content of A Detailed Dive Into Stablecoins.
Thanks for sharing this educative article on stablecoin.
Indeed stablecoin was created to help with the volatile nature of cryptocurrency by providing a measure of stability to the crypto space.
Nice article