The crypto world is going wild for 'stablecoins' — here's everything you need to know about them

Discussion in 'Cryptocurrencies' started by dealmaker, Oct 1, 2018.

  1. dealmaker


    • 'Stablecoins' are the hottest thing in crypto right now, with over 50 projects in development.
    • A 'stablecoin' is a cryptocurrency that's price is pegged to a real-world asset like gold or the dollar.
    • Here's a guide to what they're used for, how they work, and why people are excited about them.
    LONDON — The latest innovation in the fast-moving world of cryptocurrencies is the "stablecoin" — cryptocurrencies pegged to real-world assets such as the dollar or gold.

    A report from crypto wallet provider Blockchain released this week found that "the number of active stablecoin projects has dramatically increased over the past 12-18 months and more than a dozen project teams have stated they plan to launch in the coming weeks/months." There are now over 50 in development globally.

    Here's everything you need to know about the hottest new area of crypto:[idio]=5844952
    zdreg likes this.
  2. JSOP


    This is really the admission of defeat by the cryptocurrency. One of the strongest selling point of cryptocurrency is that with its limited mining quantity that it would have real value and be subject to potential inflationary pressure. If it has real value, WHY would it need to be pegged to something else, something as ridiculous as the dollar? Crypto's supposed to be just as good as gold. Crypto was created to REPLACE the dollar now it's pegged to the dollar. LOL And btw, the dollar is NOT an asset. It has no value. It only has value because US government says so. If tomorrow the US government says we are not recognizing dollar anymore but instead we recognize dustball as legal tender, all the dollar bills would become toilet paper and dustball would become a "real asset" so is the "stablecoin" going to be pegged to dustball now? LOL

    Buffett was right. At the end of the day, cryptocurrency is just like a method of payment like cheques. And since cheques have no value, then why should cryptocurrency have value? Really disappointing.
    dealmaker likes this.
  3. The makerdao stablecoin is the best one. The incentives are aligned to keep the value at $1USD or some nominal value. Read the whitepaper, I think they nail it.
    dealmaker likes this.
  4. It's an electronic cheque that bypasses the controls of the state. I think that's pretty revolutionary.
  5. JSOP


    Then it's not pegged to gold or some "real asset" if it always worth $1USD or some nominal value because gold and USD actually has values of their own.
  6. The way it's done is what is more important than the value it follows. Check it out. Pure greed in action.
  7. sle


    Intuitively, all of these "stablecoins" should trade at some discount to parity due to inherent credit/entity risk. The smaller/dodgier that "stablecoin" the larger discount to parity should get. You'd also expect the creators to build some form of gating into the redemption process so people don't take the coin down to zero.
  8. Cheques have values called paper
  9. Government has nothing to do with. People (holders, investors, spenders) decide if something has value.

    The Zimbabwe government and their old money is but one example.
  10. It also seems to me that some cryptocurrencies will supplant the weaker ones. Stability is now in the price and stable cryptocurrencies are more invested.
    #10     Oct 3, 2018