Beginner's guide to stablecoins

[ESM]

Stablecoins first arrived on the scene in 2014. Since then, a number of stablecoins have been created – including USDC and, perhaps more famously, Tether (USDT).
For example, in the case of USD Coin (USDC), for every token that’s created, one US dollar is held in reserve as collateral. Stablecoins combine the instant processing capabilities, functionality, adaptability, and security of cryptocurrencies with the stability and trust enjoyed by fiat currencies.

Unlike traditional cryptocurrencies, their price is not set by supply and demand. Rather, they employ a range of different mechanisms to ensure the price remains pegged to that asset.

There are three main types of stablecoins: fiat-collateralised, crypto-collateralised, and non-collateralised.

As a beginner in crypto instead of investing in popular coins, firstly buy some stable coins and then venture into other popular coins e.g btc, eth etc.

 

[Kiko]

When it comes to trading cryptocurrency, one of the sector’s biggest draws can also be a serious hazard: volatility. While fiat currencies typically have daily volatility levels of 0.5%, it’s not unusual for the price of cryptocurrencies to change by as much as 5% — and if prices consistently fall, this can result in huge losses for investors. A fiat currency is one which is regulated by a government and has a fixed value, for example, the British pound or US dollar. As the name suggests, stablecoins are a particular type of cryptocurrency (or crypto token) that’s designed to be stable in nature. Collateral stablecoins work using the same principle as fiat-backed stablecoins. However, instead of being tied to USD, GBP, or EUR, they are tied in value to another cryptocurrency.

 

[Kayzzy3]

Stablecoins first arrived on the scene in 2014. Since then, a number of stablecoins have been created – including USDC and, perhaps more famously, Tether (USDT).
For example, in the case of USD Coin (USDC), for every token that’s created, one US dollar is held in reserve as collateral. Stablecoins combine the instant processing capabilities, functionality, adaptability, and security of cryptocurrencies with the stability and trust enjoyed by fiat currencies.

Unlike traditional cryptocurrencies, their price is not set by supply and demand. Rather, they employ a range of different mechanisms to ensure the price remains pegged to that asset.

There are three main types of stablecoins: fiat-collateralised, crypto-collateralised, and non-collateralised.

As a beginner in crypto instead of investing in popular coins, firstly buy some stable coins and then venture into other popular coins e.g btc, eth etc.

Very nice overview, I have just seen it, though it has been here for over a month. I have always maintained that i can only use stablecoins for security because of its stability.

Dai as a stablecoin is pegged at $1 and according to their review the hope to keep it that way, no more, no less, begging the question, why should I invest in it??

If stablecoins remain the way they are, people like me won't invest in it.

 

[Mahnoor]

Ever wondered ‘how do stablecoins work?’ You’re in the right place. In this article, we’ll explain everything you need to know about stablecoins and whether they could be a smart addition to your portfolio.

When it comes to trading cryptocurrency, one of the sector’s biggest draws can also be a serious hazard: volatility. While fiat currencies typically have daily volatility levels of 0.5%, it’s not unusual for the price of cryptocurrencies to change by as much as 5% — and if prices consistently fall, this can result in huge losses for investors.

 

[Kelly5]

The introduction of the stable Coin in the likes of USDT, USDC, DAI etc has made the cryptocurrency ecosystem more interesting. You get to do your trading with ease at some point knowing that the crazy fluctuations of the various cryptocurrencies in your holdings won't go against you because your assets are already converted to the stable coin

 

[Ralphjoe]

Stablecoins where created to facilitate online payment and not as an an investment platform. Stable never reduces in their value or price rapidly, the reduction maybe very minute that one may not notice it.

 

[Royalty]

Stablecoins attempt to offer cryptocurrency users the best of both worlds: instant processing and security of payments of cryptocurrencies, and the volatility-free stable valuations of fiat currencies.

 

[Jumoke12]

thank

Stablecoins first arrived on the scene in 2014. Since then, a number of stablecoins have been created – including USDC and, perhaps more famously, Tether (USDT).
For example, in the case of USD Coin (USDC), for every token that’s created, one US dollar is held in reserve as collateral. Stablecoins combine the instant processing capabilities, functionality, adaptability, and security of cryptocurrencies with the stability and trust enjoyed by fiat currencies.

Unlike traditional cryptocurrencies, their price is not set by supply and demand. Rather, they employ a range of different mechanisms to ensure the price remains pegged to that asset.

There are three main types of stablecoins: fiat-collateralised, crypto-collateralised, and non-collateralised.

As a beginner in crypto instead of investing in popular coins, firstly buy some stable coins and then venture into other popular coins e.g btc, eth etc.

you for your timeline taking us through what it takes as a beginner to know about stable coins and some other alt coins. this is very necessary to avoid traditional ND when one is not supposed to trade and taking some decisions which are borne out of ignorance and lack of knowledge.

 

[Justin]

This is a good explanatory article on stable coins, I did not know there were three different stable coins and these categories were based whether they were collateralized or not collateralized. In case of collateralized, what they were using as collateral, fiat money or crypto. Thanks for this fascinating info.

 

[Victor72]

Well as for me I am new to stablecoin and I have no idea about stablecoin. But I see stablecoin as a good investment to venture into according to your explanation

 

[Cash%]

Well as for me I am new to stablecoin and I have no idea about stablecoin. But I see stablecoin as a good investment to venture into according to your explanation

Stable coin shouldn't be consider as a better investment because you dont earn profit trading the coin. That is the problem and issue there

 

[Mostee501]

It was a great idea to create stable coins because most times before i do any cryptocurrency transactions, i convert from the unstable coins to usdt before completing my transactions.

 

[Nomad]

If you are investing in crypto in a hope to make a lot of money, you should simply forget about the stable coins, because stable coins do not fluctuates like other currencies

 

[Richard92]

If you are investing in crypto in a hope to make a lot of money, you should simply forget about the stable coins, because stable coins do not fluctuates like other currencies

with this guideline that you have given on how to invest in stablecoin think it will help and I find it interesting to be of greater advantage.

 

[Nomad]

However, it is also true that Stable coins are more secured than other coins because the price does not fluctuates just like other coins. The price will go up only the the currency it is pegged goes up.

 

[GIFTMICHAEL]

Investing and holding stable coins like USDT coin and USDC us a nice option for the beginners. It will show them how it is in the crypto market, from there, their experience grows.

 

[Kelly5]

If you are from a country where your fiat currency is becoming weaker and weaker by the against major currencies like the united States dollar especially, you should get yourself one of these stable coins to preserve your money's worth

 

[Eodine]

I have just been educated again about crypto currency, thank you for sharing this, I just normally buy my coins directly from my wallet provider with the deposit option.

 

[Senator]

If you are from a country where your fiat currency is becoming weaker and weaker by the against major currencies like the united States dollar especially, you should get yourself one of these stable coins to preserve your money's worth

Wow!! What a very smart move indeed. Your country's fiat currencies may be going down so fast, that shouldn't mean you should not make the smart move to safe up for yourself in the stable coins.

 

[Dowenship]

Stablecoins first arrived on the scene in 2014. Since then, a number of stablecoins have been created – including USDC and, perhaps more famously, Tether (USDT).
For example, in the case of USD Coin (USDC), for every token that’s created, one US dollar is held in reserve as collateral. Stablecoins combine the instant processing capabilities, functionality, adaptability, and security of cryptocurrencies with the stability and trust enjoyed by fiat currencies.

Unlike traditional cryptocurrencies, their price is not set by supply and demand. Rather, they employ a range of different mechanisms to ensure the price remains pegged to that asset.

There are three main types of stablecoins: fiat-collateralised, crypto-collateralised, and non-collateralised.

As a beginner in crypto instead of investing in popular coins, firstly buy some stable coins and then venture into other popular coins e.g btc, eth etc.

I think one of the purpose of introducing this stable coin is due to high votality of other crypto currency so to enable the value of high vitality stable coin was introduced.