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Cryptocurrency

What is Stablecoin?

What is Stablecoin?

11/25/2019

What is Stablecoin? A stablecoin is a new class of cryptocurrency. It’s a modern answer to the drawbacks of the original, volatile crypto coins like bitcoin.

While other crypto coins fluctuate based on market movements, most stablecoins have a foundation to base their value on. One way this is used is a gold standard that dictates the value of a currency like the US dollar. They take the pros of the crypto coins’ security and combines it with the balance and structure of fiat money.

The Basics of Stablecoin

One of the problems with the classic crypto coin is that it’s unstable and risky, especially when the value changes and cannot be reliably depended on. Not only that but because crypto coins can be unstable, it’s difficult to build off of them since there’s no solid foundation. This led to the creation of stablecoins, a new type of crypto coin. These coins come in 3 types.

Three Types of Stablecoins

Fiat-Collateralized

The first type is fiat-collateralized stablecoin. This stablecoin is one of the easiest to use because every unit of fiat money is represented by one stablecoin. This means that while your fiat money remains secure in reserves, you can comfortably use stablecoins to make transactions online as if they were fiat money.

Multi-Asset/Crypto-Collateralized

The second type of stablecoin takes away most of the centralization of fiat money in the first type. Instead, it can use items of value like gold or other crypto coins as a basis. This makes the entire transaction process completely decentralized. To maintain stability, the stablecoin and crypto standard aren’t always 1:1 like the first type. There are often more stablecoins for each crypto standard coin to lessen volatility that affects both currencies.

Non-Collateralized

The third type doesn’t use another currency as a basis. Instead, it functions on supply and demand to maintain stability. For instance, the basecoin uses a consensus system to dictate how many coins there can be at a time. This type is an entirely decentralized version of the way real-life banks regulate a currency’s value.

The Future of Stablecoin

As technology continues to evolve over time, modern problems need modern solutions. For crypto coins, that’s exactly what stablecoin is. The future of stablecoin is bright because of the great potential for it to be used in daily life instead of fiat money. The benefits are just too great. With secure blockchain tech and anchored stability, stablecoins are the best of both worlds. Get your crypto wallets ready because it won’t be long until stablecoins are as common as fiat money. 

While the value of crypto coins can be unstable, one thing that’s permanent is the fun you can have here in Bitcasino! You can still reliably use your crypto coins like BTC or TRX to play all your favourite games right here, worry-free. Some good ones you can play with your crypto coins are Restaurant Craze and Eggomatic. Don’t hesitate and start playing now!

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