The surge in popularity of Bitcoin, while surprising some, comes as little shock to others, who have been following this phenomenon for a decade. The appeal of cryptocurrency is obvious. It is a decentralized currency, which places emphasis on anonymity, autonomy, and most importantly you don’t even need to get out of your house to trade. Estimates point to the number of people who are investors is currently sitting in the tens of thousands, with potential for that number to increase drastically in coming years
But, many people are still dubious about one aspect of cryptocurrency. Its high volatility and fluctuation rate. Looking at the price history of bitcoin shows us that bitcoin, while profitable, is not the most stable investment. This is no cause to worry, as crypto developers have come up with an answer for worries such as these. This answer comes in the form of stablecoin.
What is Stablecoin?
Stablecoin is a form of cryptocurrency which appeared on the crypto market in 2014, when a group called Tether Limited (Tether Ltd.) launched the first, and by far the most successful still stablecoin, simply called Tether. Tether Limited came up with a simple, yet effective method of maintaining Tether’s stability. For every unit of Tether issued, the company kept a single US dollar in reserve. This meant a single unit could be redeemed for a dollar from the reserve, ensuring the price of Tether would be stabilized at a single dollar.
Tether’s supply surpassed a million dollars in 2016, and by the same time next year that number grew to near ten million. By 2018, tether’s reserves had reached one billion dollars. The future of the stablecoin looks bright, as many experts are predicting a rise in popularity and a retained stability. Some suspect the value of Tether may even rise to $1.2.
Stablecoin trading works much the same as crypto trading. Most trading sites like BitIQ support Tether, and other forms of stablecoins. They are easy to use, and offer a simple interface for newbies, as well as placing huge emphasis on maintaining their user-base’s security, safety and anonymity.
With Tether being the most famous stablecoin, many are wondering if there are any other stablecoins on the current market worth investing in. We will take a look at a couple of stablecoins that are worth looking into if you are looking to invest in crypto.
True USD (TUSD)
True USD is a cryptocurrency that is one hundred per cent backed the United States dollar. As such True USD is one of the most liquid cryptocurrencies on the current market. The stablecoin offers low transaction fees, far lower than most wire transfers done with fiat money. True USD can be traded on over one hundred markets and a dozen OTC desks .
The current price of True USD is one dollar, and has been since its creation. TrustToken, the company that owns True USD has also launched a number of other stablecoins, back by other major currencies; TrueAUD, TrueGBP, etc.
Paxos Standard (PAX)
Paxos Standard was launched in 2018, with the aim of maintaining a one-to-one parity with the United States dollar. Paxos Standard gained traction due to its impeccable peer-to-peer system, and its quick trading services, as PAX users can move between crypto and fiat currency quickly and efficiently.
Paxos Standard’s current value lies at $1, and has remained stable since its inception.
USD Coin
Last, but certainly not least, we have USD Coin. Backed by Coinbase, the world’s largest broker, and bitcoin exchange holder, the stablecoin has remained at a stable price of one dollar for its entire existence, and is currently ranked #8 on the crypto market. USD Coin runs on the Ethereum, Stellar, Hashgraph, and Solana blockchains.
