Trading in bitcoins is not for the faint-hearted. It can give you highs and lows reminiscent of an alter-state.
Narratives are paramount in the public sphere. Like any aspect of social life, they set an image precedent difficult to shrug off. Part of the current public opinion on cryptocurrencies can be attributed to it.
However a major contributor towards this was the instant growth-depreciation price curve of cryptocurrencies. The Volatility Factor forced cryptocurrencies to become mere fantasy talks rather than investment options for the common public.
With no standard rulebook on investing in cryptocurrencies, Stablecoins come as a welcome alternative for those seeking a more stable decentralized investment alternative.
In this blog, we look at some of the core features that make stablecoins the new hot property in the cryptocurrency market and also understand how stablecoins will help the ‘Cryptocurrency Vision’ finally find its true voice amidst the masses.
What are StableCoins?
Stablecoins are cryptocurrencies backed by real-world assets both physical and financial. These assets are normally stored in vaults or in escrow accounts for transparency. Unlike early stage cryptocurrencies, Stable Coins gain value from these real assets.
While die-hard crypto enthusiasts would beg to differ but StableCoins absorbs within its fabric the stability of the old FIAT system and transparency of the new decentralized system.
The Promise: Freedom And Safety
Some experts have termed StableCoins as price stable cryptocurrencies. StableCoins promise price stability. Vitalik Buterin, co-founder of Ethereum, had envisaged the dream of a stable cryptocurrency in one of his blog posts four years ago.
In the post, Buterin stressed on the need for an alternate form of cryptocurrency that was backed by real-world assets. This would help everyday people become familiar with the crypto economy.
Another promise that stable coins claim to keep is to ensure transparency in industries crippled with tedious norms and inefficiency. Say for example the Real Estate. Blockchain promises to render transparency to the otherwise vague industry norms.
A large-scale adoption of cryptocurrency will require an asset-backed cushion to check volatility. No-doubt the decentralized nature of cryptocurrencies have attracted one and all, it is the risk factor of investing in an unregulated crypto economy that has kept the common man at bay.
StableCoins promise freedom and safety for coin owners. As more stablecoins make their entry into the crypto economy, the freedom of choice and safety of assets could ensure the much-awaited paradigm shift that the crypto enthusiasts have been waiting for all along.