A Comprehensive Overview of Stablecoins – The Capital

What is a Stablecoin? What do They Do? Why Do We Need Them?

Source: https://pixabay.com/nl/photos/munten-calculator-begroting-1015125/

The Bitcoin and cryptocurrency market cap has been quite volatile ever since the initiation of the Bitcoin Genesis block, back in 2009. In its ten-year odyssey, the market has gone through a few bumpy market cycles.

Bitcoin broker fees can add up, especially when you are entering in and out of investments at a fast pace.

Buying and selling real-world items with Bitcoin still has its setbacks, when you look at the number one cryptocurrency from an investment perspective, because Bitcoin might be worth a fortune in the future and you end up like Laszlo Hanyecz, who paid 10,000 BTC for two pizza’s which is now, ten years later, the equivalent of $70,000,000.

Stablecoins are digital currencies developed to minimize the volatility of the price of set stable coin. Stablecoins can be pegged to fiat currency, like the US Dollar, another cryptocurrency, like USDT, or to exchange traded commodities, like precious metals. As such, stablecoins are not intended as an investment vehicle, but rather a safeguard towards the underlying value of the pegged asset (b.g. US Dollar, gold, USDT).

Back in 2014, Steem and EOS founder, Dan Larimer launched BitShares, the first stable cryptocurrency project, to provide investors with a safe hedge against the highly volatile cryptocurrency price swings. Nubits launched USNBT in that same year.

Moving forward to 2015, RealCoin was introduced, which has since rebranded to Tether, the coin most people know, either because it is available for trading at all the major exchanges or for its controversy and pending legal action initiated by the US government. Tether is built on the OMNI blockchain and has been a stablecoin market leader since 2015. In 2019, Tether started mitigating from OMNI to the Ethereum blockchain.

In 2016, USNBT lost its peg against the US Dollar.

Steemit introduced SteemDollar (SBD), to stabilize…

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