The crypto world is already filled with a lot of different kinds of coins and tokens. Utility tokens, security tokens etc. have gotten a lot of heads spinning already, and among these have risen a new breed of crypto coins, the stablecoins. So what are they all about? Are they better than regular cryptocurrencies?
Stablecoins essentially tackle one of the burning issues of the crypto world, volatility. Bitcoin, ethereum, XRP and other major cryptos in the game are the subject of large-scale volatility. Prices fluctuate too often and too much. Stablecoins bypass this issue by having a peg with the fiat currency or some other exchange-traded commodity. By doing this, stablecoins inherit the feature of stability but at the same time, drawbacks of the fiat world also get transferred. Although the features that blockchain presents forward in the form of trust and transparency also get transferred. So are stablecoins better than normal cryptocurrencies?
Henry Stanley, the Chief Executive Officer of ICOAxiom.com recently got in touch with BlockPublisher as he answered this question in detail. He said:
Henry: “Are Stablecoins better than normal cryptocurrencies? Yes and No, That may not be the direct answer you were looking for but I will go over two situations in which where stablecoins are better than cryptocurrencies and are worse then cryptocurrencies.
What it really comes down to what is your intention with stablecoins. If your a retailer selling goods online, you don’t want to be subject to the volatility of cryptocurrencies, a 20% price swing if it goes up can increase your profits, however if it goes down, you may end up getting less money for the item that you sold then what it cost you to purchase it, so in that situation stable coins are better.
However, if you see cryptocurrencies going up 20% a week and want to jump in and hope to catch some of that appreciation, your highly unlikely to get that from stable coins. which makes them worse for investing and trading. Additionally, many cryptocurrencies are used to purchase services from the companies that issue them. If you would like to purchase or utilize the services you would need to exchange the stablecoins for the cryptocurrencies that you desire.”
The issue of volatility that stablecoins tackle might not be that bad at all. Quick price jumps are one of the reasons why people step into the world of cryptos, to gain a quick profit. With stablecoins, this aspect is thrown out of the window. On the other end, stablecoins make the most sense for performing large-scale massive transactions since the price does not fluctuate too often. All in all, stablecoins essentially form the bridge between the fiat world and the world of cryptos. Although they might not be termed as ‘pure’ cryptocurrencies, they sure possess the potential to increase the adoption of the crypto world overall.
NYSE Parent ICE Anticipates Over $20 Million Spend on Bakkt This Year
Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, estimates it will spend more than $20 million this year in building Bakkt, its bitcoin futures trading and custody platform.
In an earnings call for Q4, 2018, on Feb. 7, Scott Hill, ICE’s chief financial officer, said the firm’s investment in Bakkt will result in $20 million to $25 million of its estimated expenses for the fiscal year 2019.
The estimation comes just six weeks after Bakkt announced a massive $182 million fundraise for its bid to roll out the trading platform with regulatory approval. However, the platform’s live launch has been postponed two times, a situation exacerbated by the recent U.S. government shutdown, as it works to get the green light from the Commodity Futures Trading Commission.
In the earnings call, ICE CEO Jeff Sprecher said the company’s investment in Bakkt is “a bit of a moonshot bet” and is not a typical ICE product. The platform’s infrastructure, though, has attracted some “very, very interesting” companies companies for investment such as Microsoft’s venture fund and Starbucks.
Sprecher continued to say he expects Bakkt to do other rounds of financing in the future. Currently, Bakkt is a separate company with ICE as the major investor, but it may be fully spun off at a later stage, he said.
Sprecher was once more vague about Bakkt’s launch timeline, however, and only said users could expect to see it live “later this year.”
With market anticipation of Bakkt’s launch building, last week fraudsters made an attempt to use the Bakkt brand to con users out of their bitcoin.
The impersonators sent out emails claiming Bakkt will be launched on March 12 and would hold another round of financing to raise $50 million. They asked prospective investors to register and send cryptos to a fake Bakkt website that CoinDesk confirmed has no official association with the platform.
CEO of Anchor Gives His Insights On Stablecoins
Stablecoins have taken the crypto world by storm during the bear market. With prices spiking up and plunging down in a matter of minutes, investors and the general people in the crypto arena have started to question the credibility of this world. Are cryptocurrencies supposed to act like stores of value or are they to be used as a means of making payments? And with price fluctuating at a very rapid pace, usage as a source of making payments does not seem too natural. Stablecoins present a solution to this.
Stablecoins are those cryptocurrencies that are backed by fiat or any other exchange-traded commodity. So the price fluctuation aspect of regular cryptocurrencies vanishes from the scene for stablecoins. All the inherent features of blockchain such as trust, transparency, and privacy are also made available. But on the other end, the drawbacks such as inflation of fiat and other commodities also get transferred. So are stablecoins better than regular cryptocurrencies?
The Chief Executive Officer of Anchor, Daniel Popa, recently got in touch with BlockPublisher as he gave his insights regarding stablecoins. Answering this question, he said:
Daniel: “Most stablecoins aim at nothing more than to mirror a fiat currency or commodity to which they are pegged. Fiats and commodities regularly fluctuate and are susceptible to inflation, therefore inevitably losing their original value, and so are the stable coins pegged to them. Although stablecoins offer lower volatility than a typical cryptocurrency, so does virtually any other type of investment out there in comparison to the current crypto market. There is, however, a future for stablecoins that are actually capable of preserving and increasing in value over time through smart design, ingenuity, transparency, stability, and predictability.”
Stablecoins have their own perks and features that give them the importance they have. While staying in touch with the traditional fiat framework, stablecoins present forward the important features of the crypto world such as transparency, trust etc. They essentially mirror fiat currencies in the crypto world.
Further adding on to his statements, Daniel also said:
Daniel: “At Anchor, we have a team of financial experts, business leaders, and PhD mathematicians who have created a dual-token stablecoin that is pegged to a new index, the Monetary Measurement Unit (MMU), which represents the global economic growth. Leveraging key macro and micro economic factors of about 190 countries in the world, the MMU is an algorithm that calculates the total value of the global economic growth. The world’s economy is on the rise year after year, whereas fiats such as the US dollar, for example, have been losing about 50% on average of their value over the last 30 years. Anchor is safeguarded against inflation, impervious to cryptomarket volatility, and is a financial anchor that can stabilize other currency systems as well as the overall global economy.”
Stablecoins seemingly form a bridge between the crypto world and the world of fiat. Benefits and drawbacks of both the worlds seem to be merged in one entity. They do carry much importance in the crypto world as they help different people understand the prospects offered by blockchain which in turn leads to more adoption of this technology and the crypto world.
We are still early in the crypto arena. There’s a lot that needs to be explored, a lot that needs to be put in place. Even the role of bitcoin is not defined clearly in the mainstream financial market yet. It will be very interesting to see how things pan out for stablecoins as we move forward.
New Binance CEO AMA Touches on Bitcoin ETF, Ripple/XRP, Binance Chain and Blockchain’s Future
A few hours back, Binance CEO ‘Changpeng Zhao’ conducted an all-new AMA-type session on Periscope during which he answered a host of questions related to:
— Binance (@binance) February 7, 2019
A Closer Look at the Matter
Starting off the Q&A event, CZ mentioned that there would be a total of 11 operational nodes that would be made available for use with the Binance Chain testnet. Additionally, he also mentioned that the number of validators within the network would be small— so as to keep the platform’s performance at optimal levels.
Following this, Zhao was questioned about his decision to use Cosmos as the base framework for his upcoming project. On the matter, he was quoted as saying:
“They had a solid product. The Cosmos architecture was closest to what we wanted… We took Tendermint and made a fork of it. We didn’t use the standard SDK. We forked it and chopped a lot of things out. So, in the Binance Chan, there are no smart contracts. We just have an interface for you to issue a token, and then you can trade it. Binance Chain is a very simple in terms of application, but it can handle very large loads.”
Other Key Points Worth Bearing in Mind:
- Only a select few partners will be granted early access to the Binance DEX platform.
- While the listing fees on Binance DEX will be adjustable over time, the initial amount that projects will have to pay will be somewhere close to the $100K mark.
- The popular Ledger Nano S wallet will provide full integration support for ‘Binance Chain’.
CZ Speaks About Decentralization
On the subject of decentralization, Changpeng said that while most people viewed the issue as being ‘black or white’, the matter was much more complex. Further elaborating on his stance, he went on to add:
“There’s a degree of decentralization you can achieve. Some blockchains are more decentralized, some blockchains are more centralized. Any blockchain that has a clear development leader or team, they are more or less centralized in some way. So, Binance Chain is a going to be a little more centralized initially in that way.”
Another subject that CZ broached during his recent Periscope chat was that of Bitcoin ETFs and whether or not they would ever see the light of day. On the issue, he stated that as and when such an offering would be made available to the masses, a lot of new investors would flock to this burgeoning industry.
Last but not least, he also added that Binance was looking to partner with Ripple and make use of its xRapid protocol in the near future.
“There’s nothing going on right now, but in the coming few months, we definitely want to add them as a partner.”