Cryptocurrency has become one of the most commonly used words on the web today. There are endless articles, tutorials, and online forums discussing various cryptocurrencies. It is considered to be the next store of value that will be widely used. However, many are still very skeptical about these digital currencies, mainly due to their perceived instability.
Endless Cryptos and Counting
Cryptocurrency isn’t a single currency on its own, but rather an umbrella term that categorizes over 1,500 different currencies with some of the most notable being Bitcoin, Ethereum, and Litecoin.
More and more enter the market every day with initial coin offerings (ICOs) being used to raise funds to start new crypto ventures.
Since the unprecedented height of Bitcoin’s value during December 2017, everyone seems to be trying to replicate its success, to varying degrees of success.
After its period of record highs in value, Bitcoin fell sharply this year and has not quite recovered its momentum yet. The constantly fluctuating value of cryptocurrencies has given them the reputation of being a risky investment for the tech crowd rather than a viable currency in itself. Simply put, people see cryptocurrency as unstable.
Creating a Firm Foundation
Because of the shaky reputation ascribed to cryptocurrencies, some have found it difficult to inspire public confidence and investors backing. The solution to this seems to be finding a way to make cryptocurrencies more stable in their value.
In recent times, crypto entrepreneurs have attempted to do this by creating a crypto token known as stablecoins.
What are Stablecoins?
A stablecoin is an alternative to traditional cryptocurrencies in that they are tied to traditional currencies such as USD and GBP. By creating this association with fiat currencies, crypto entrepreneurs hope to inspire public confidence and change the perception of cryptocurrencies being nothing more than an internet gamble.
As of late, stablecoins seem to be gaining quite some momentum in the crypto world. For example, Tether, a Hong Kong based crypto company recently traded over $2 Billion of fiat currency to digital tokens. These tokens are tied to traditional currency. Tether now holds about 90% of the stablecoin market.
Looking to the Future
While stablecoins have their benefits, some in the crypto world argue that an influx of more funds overall will lead to the market regulating itself. After all, they argue, the foundation of cryptocurrency is one of detachment from centralized regulation and stablecoins defeat the purpose.
In the coming months and years, the staying power of stablecoins will certainly be revealed.
