A “stable coin” is a cryptocurrency that is pegged to another stable asset, like gold or the U.S. dollar. It’s a currency that is global but is not tied to a central bank and has low volatility. This allows for practical usage of using cryptocurrency like paying for things every single day.
This allows the idea of cryptocurrency to be generalized and made available for all like it was intended to be.
Bitcoin and ethereum are used as a trading asset, they add to the holder’s self-esteem a little more than money because they are digital money that people formerly hated and questioned a little too much. The concept is now being demystified and as time passes things are changing. The concept of a stable coin allows cryptos to be used for tiny everyday transactions for boring things like buying the bread, coffee or groceries.
This was not possible before because not only was the currency unstable but also these currencies were greatly indivisible and too precious to do everyday things with. Also, these currencies held a great emotional value than their monetary one for most buyers.
New coins called and categorized as stable coins are changing the scene.
Coins like Bitcoin and Ethereum and highly volatile. On any given day, it is common to see an increase to 10-20% or even a decrease. That makes using most cryptocurrencies for daily transactions inconvenient. Price changes of say 10% each day are too shocking for a consumer.
The adoption of stable coins will be a catalyst to the new decentralized internet becoming mainstream. This is because for cryptocurrency short-term stability is important for transactions and long-term stability is important for holding. Stable coins eliminate the problems and the inconvenience of the other currencies.
Most common examples of these coins include Tether, MakerDao, Basecoin, and Havven. These currencies peg their value to USD. This opens the users to a great deal of familiarity and ease while spending the currency.
The 2000+ cryptos that we see today are more than just a counter-culture to the usual regular fiat money. This counter-culture has remained challenged, hated and debated over time. But, within it, the emergence of stable coins and a cult who like them better than bitcoin and ethereum has made its own place. Whichever team you are on, good luck, because who wins is a matter of time and adoption, the battle is real! We like it fierce!