Cryptocurrencies are part of all our lives, but there’s still a small section of people who don’t want to put their money in this groundbreaking technology.
An option for these individuals, Stablecoins, has emerged as a unique and intriguing category of cryptocurrency. In this article, we’ll be telling you everything you need to know about them.
Why are more people investing in cryptocurrencies?
The growth of cryptocurrency felt like it happened overnight, but it has been slowly taking hold of many industries over the past decade. A clear example of how the organic adoption of cryptocurrencies happened over time is in the online gaming industry – which originally came about as an online alternative to traditional, in-person games. After adopting new technology to create online gaming experiences, it wasn’t a shock to see games adopting the latest tech – cryptocurrency. Now, most online casinos will offer crypto slots and other casino games that allow players to use their preferred crypto when making bets rather than traditional currencies.
It’s a similar story in other entertainment industries like music, film, and TV where businesses have leveraged the power of cryptocurrencies to make payments easier and introduce other digital assets that improve audience engagement.
What are Stablecoins?
Stablecoins are a unique type of digital currency designed for…well, stability. As the name suggests, stablecoins aim to maintain a stable value throughout their lifetime, unlike conventional cryptocurrencies like Bitcoin or Ethereum which can experience price fluctuations. What allows stablecoins to sustain a stable price is the fact that they are pegged to external assets.
The most common peg for stablecoins is a fiat currency, such as the US dollar. This pegging establishes a fixed exchange rate, with one unit of the stablecoin equivalent to a specified amount of the fiat currency. This can make Stablecoins more attractive to consumers who are worried about price movements in the broader crypto market.
What do people like about Stablecoins?
Interested in getting involved with stablecoins? Here’s why they have become so popular:
- Stable prices: Stablecoins are intended to be more reliable when it comes to maintaining their value, an important thing for people using them as a way of storing and exchanging value. A lot of people prefer having the stability of a stablecoin.
- Facilitate efficient cross-border transactions: Like other cryptocurrencies, stablecoins can facilitate fast and cost-effective cross-border transactions. Because they don’t suffer from the usual delays and fees linked with traditional banking systems, stablecoins are an excellent choice if you make frequent international money transfers.
- Benefit from advanced Blockchain technology: Users can harness the benefits of blockchain technology, such as transparency, security, and efficiency.
Although, if you are considering buying into the world of stablecoins, we would recommend doing your research beforehand to make sure that is the right investing choice for your personal needs and requirements.
It’s important to note that stablecoins can be susceptible to de-pegging or peg failures which can diminish their value in some scenarios – but this is something that you could fall victim to regardless of the currency, you can never be 100% that a coin is going to sustain it’s value. Like other investments, failing economies can really throw a spanner in the works and affect the value of your investments – so be careful!
How do you use Stablecoins?
To use stablecoins, you’ll need to follow a few straightforward steps:
- Select your chosen Stablecoin: Look for a coin that aligns with your preferences and requirements. Popular options include Tether (USDT), USD Coin (USDC), Binance USD (BUSD), Dai (DAI), TrueUSD (TUSD), Pax Dollar (PAX), and USDD.
- Acquire your Stablecoins: You can do this through various platforms, including cryptocurrency exchanges. You can either purchase stablecoins using fiat currency or by exchanging other cryptocurrencies.
- Keep coins in a secure digital wallet: No one wants to lose their money so make sure you’ve got a wallet you can trust. Choose from the standard wallet options from your cryptocurrency exchange site or look into other wallets that offer enhanced security – it all depends on your personal preference.
- Use your coins: One thing’s for sure, you’re not limited when it comes to using your coins. Stablecoins can be used for peer-to-peer transfers, online purchases, and cross-border payments. There’s also a big market of people who like to trade cryptocurrencies with the help of various charts.
- Stablecoin conversion: If you decide that you want to convert your coins back into a flat currency or another type of cryptocurrency, it’s a straightforward process that you can follow on most cryptocurrency exchanges.
Should you invest in Stablecoins?
Stablecoins attract cryptocurrency enthusiasts who want an added layer of security to safeguard their funds. Nevertheless, it’s crucial to acknowledge that no investment is 100% reliable and you should never invest more than you are willing to lose.
