Stablecoins: A Holy Grail in Digital Currency - The MakerDao
A global currency with no central bank and low volatility may be a key component of the decentralized web.
Digital Money
The invention of digital money is a comprehensible step for the digital evolution.
It's not hard to understand that there are many usecases for digital currencies.
Even our "old" fiat currencies are nearly completly digital today.
If we look especially at cryptographic designed digital currencies,
we are looking at just about 10 years of development.
In 2009 Bitcoin triggered a really disruptive technologie for the usability of money.
It represents the first system of money, which is working without any form of middlemen (e.g. banks /other institutions).
This was a crucial moment for the history of money.
But there are some problems with Btc as a currency.
No matter how we look at it, it's a wonderful store of value, but currencies as a whole require more than this to be useful as a form of payment systems.
Payment vs. Investment
A store of value and a system of payment are not necessarily the same !
A good example for this are Gold and the US Dollar.
It's not very useful for our current society to use Gold for payments.
And it's not the smartest option to store large amounts of value just in Dollars.
The reason for this is not trivial but shouldn't be the topic of this post !
Payment
But it's easy to understand that the Dollar for example is a very good indicator to estimate the costs of most daily needs.
If you want to know the costs of water or the prices of your future repairs for your car for example, it is necessary to have an asset with low volatility for reliable calculations.
But the tool of Inflation, which helps to guarantee low volatility, is also the reason why assets like $ are most likely to decrease in value over time.
Investment
So if we look at Gold in this case, we can see that it's not suitable for the estimation of daily needs, but it has shown as a really good store of value for long terms.
Gold has proven itself for keeping purchasing power for long periods of time.
For example for 1oz of gold you always could buy a decent men's suit, this is true for today like it was in the roman empire.
The problem of payments and volatility
So, there is the major issue that most invented crypto currencies of today having huge volatlity.
From a technical standpoint they are a great store of value, (Btc for example seems to evolve as a kind of crypto Gold)
But this circumstance of high volatitliy makes them unusable with certainty, for most payment applications, as there are no underlying mechanisms to protect the users from fluctuating prices.
But wouldn't it be nice to combine the inventions of cryptocurrencies with stability ?!
A global, decentralized currency with no central bank and low volatility !
This would create massive options and application possibilities for digital decentralized money !
(e.g. salary payments, paying daily needs, clear pair speculating/predictions/trading, global decentralized standardized currencies, and many more...)
There are various projects working on this (for example Bitshares and Dash)
But today i want to introduce you to the MakerDao concept and it's stable currency called Dai !
MakerDao and Dai
Stablecoins: A Holy Grail in Digital Currency
"Makerdao is a decentralized autonomous organization on the Ethereum blockchain seeking to minimize the price volatility of its own stable token — the Dai — against the IMF’s international currency basket SDR."
What if the volatility of a digital currency could be minimized by a decentralized autonomous organization (DAO) with no central authority? This is the promise of an emerging category of digital assets called stablecoins.
The dai does not exist yet and is not much more than a vision. But the groundwork is currently being laid for a stablecoin that could bring millions of more people into the blockchain ecosystem.
read more:
https://thecontrol.co/stablecoins-a-holy-grail-in-digital-currency-b64f3371e111
by Nick Tomaino
Coin Interview with MakerDAO
MakerDAO Website: https://makerdao.com
MakerDAO Chat: https://chat.makerdao.co
MakerDAO Github: https://makerdao.github.io/docs/
Interesting to read, thank you for sharing my friend!
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