Cryptocurrencies are ruling the mainstream market. Every retail investor has some cryptocurrencies in their cryptocurrency wallet. However, choosing an appropriate cryptocurrency is challenging as many digital currencies explode daily.
Creating digital currency is not challenging, so developers release two to three new coins every day. But, unfortunately, some people get trapped in rug pull and lose their money. Bitcoin, the sovereign of the cryptocurrency market, is the utmost trusted project in this marketplace. Every decentralised or centralised cryptocurrency exchange allows you to buy this virtual coin.
Stable coins also come under digital currencies but have bit dissimilarities to the actual currency. To know how the dynamics of the cryptocurrency market work,surge in cryptocurrency. Bitcoin came a decade before and took some time to enter the market, but stable coins immediately after their release acquired the limelight.
The utmost popular stable coin is a rope. Debates on bitcoin vs stable coins have been going for a very long time. So let’s find out the actual disparities between bitcoin and stable coin.
Bitcoin Vs Stable coins
People sometimes confuse stable coins with altcoins. Altcoins can be defined as any digital currency rather than bitcoin, whereas stable coins differ from altcoin and bitcoin. Stable coins are the safer facet of the cryptocurrency marketplace.
Undeniably, we can say bitcoin and other altcoins are stable alternatives as a currency for countries like Venezuela as the fiat currencies in these countries are volatile. But deep down, we all know about the volatility the cryptocurrency market has experienced in the last decade. Bitcoin and ether are currently very volatile, but rug pull is also increasing in this market.
Stable coins!
Stable coins are a public currency whose value is pegged with a country’s national currency. For example, tether, the most popular and successful cryptocurrency in the stable coin category, is roped with the value of one USD.
In short, the value of one rope is the same as the market price of USD. Currently, one tether or USDT is trading at 75.19 INR and the USD. USDT might seem like a fiat currency, but it is a cryptocurrency as it works on a blockchain technology just like other digital currencies; all the more, it has a cryptographic framework.
How stable are coins better than other cryptocurrencies?
Cryptocurrencies have acquired immense popularity in recent times. Still, the amount of criticism cryptocurrencies receive due to their volatility, price fluctuations, and utility in illegal activities is increasing day by day. Although the stable coin comes into play in this scenario, the volatility stable coins experience is not even countable.
For example, if the price of USD increases according to the international market, the market value of tether will also increase. On the other hand, we all know the fiat currencies of developed countries like the United States is highly stable, so the probability of tether being volatile in terms of market value is almost zero.
The market value of bitcoin tumbled from $5000 to $50000 in just a single year. The price bump might seem very profitable from the perspective of bitcoin holders, but it lowers bitcoin’s chances of becoming a successful monetary system in the future. Bitcoin has been a commendable asset, but it cannot serve as a payment method if a currency is not stable.
Can whales influence Stable Coins?
Stable coins are just like fiat currencies but with a cryptographic framework. In short, it is exceedingly difficult for anyone to manipulate the market value of a stable. For example, no matter how many ropes a stakeholder buys or sells, the rope price will always be the same as USD. Such features of stable coins make them an appropriate monetary system. Therefore, one can use stable coins just like fiat currencies.
The cryptocurrency exchange allows you to buy these virtual tokens anytime and from just anywhere. Since stable coins follow one country’s currency, the stable coins become regulated. Unregulated and decentralised are some characters that account for most cryptocurrency volatility.
Bitcoin, ether and other cryptocurrencies are better for making profits by trading, mining and investing. On the other hand, stable coins are a better payment method than other digital currencies.