Stable Coins

Exploring their uses and purpose 2021

Stable coins are a cryptocurrencies that seems to be forget. Taken for granted, used to buy or sell Bitcoin or Ethereum. Does this make them a good investment, or more of a means to an end?

What makes a coin stable?

In most cases, most stable coins are backed to a widely used FIAT currencies such as the US Dollar, or the Euro. Some are backed by other assets, such as Gold. A lot of FIAT money isn’t really backed by much anymore, but it’s got wide acceptance.

What the value?

The value depends on what it’s backed by, and how it’s backed. This takes some due diligence, as there are lots of claims out there .For example gold can be rented, it can be in a vault, it can be forged, it can be stolen. Gold backed is a wide claim out there that hold little water most of the time. It’s only truly backed when there is a mine, that’s in production that will back it. This is what creates it’s value, because they have the supply to distribute. A vault of gold is great for only one person, the one with the key in his possession.

The value of stable coins in general is that it acts like a virtual wealth. If you have a volatile coin like Bitcoin, you should use a stable coin. When it’s up you go to a stable coin, when it’s down you buy bitcoin again. The stable coin then acts as a bank account essentially. This is eerily similar to how banks work, they just keep the money they get from…