Summary

The web content discusses Bitcoin's history, its price volatility, and the emergence of stablecoins as a solution for stability and practicality in cryptocurrency transactions.

Abstract

Bitcoin, the first cryptocurrency created in 2009 by the enigmatic Satoshi Nakamoto, has experienced significant price fluctuations, rising from near zero to a peak of nearly $20,000 in 2017, and then dropping to around$ 3,243 after a market bubble burst. Despite its volatility, which can be advantageous for experienced traders, Bitcoin's instability is not ideal for everyday transactions. Stablecoins have been introduced to address this issue, offering a fixed price against fiat currencies or commodities like gold and silver. These digital assets provide traders with a way to liquidate cryptocurrencies without converting to fiat, and they are cost-effective and easy to transfer. The most widely accepted stablecoin is Tether (USDT), and others like USD Coin (USDC) and Binance USD (BUSD) are also prominent. The article suggests that stablecoins could be a profitable investment for millionaires due to their stable value and potential for arbitrage gains.

Opinions

The author implies that Bitcoin's high volatility, while beneficial for skilled traders, is not suitable for those seeking stability for common use.
Stablecoins are seen as a significant advancement in the cryptocurrency space, offering stability and usability.
The author suggests that stablecoins like Tether (USDT) can be a lucrative investment opportunity, even more so than traditional banking methods, due to their stable value and minor price fluctuations.
The author expresses skepticism about Facebook's stablecoin, Libra (LIBRA), pointing out governmental concerns over its potential impact on local currencies and the power dynamics of controlling money.
The article endorses the use of an AI service, ZAI.chat, as a cost-effective alternative to ChatGPT Plus (GPT-4), highlighting a special offer of $1/month.

Bitcoin and stablecoins

Everybody now knows Bitcoin, but what are stablecoins and what are they useful for?

A hand holding one Bitcoin, from Shutterstock

Background

Bitcoin was the first cryptocurrency that was made back in January of 2009. It is said that the inventor behind Bitcoin is Satoshi Nakamoto, but the person is never found. So we can assume that he wants to keep his identity secret.

Bitcoin started at a price near to zero, and the first commercial transaction, when somebody bought goods with that currency, was back in 2010. For 10,000 Bitcoins, a programmer named Laszlo Hanyecz ordered two pizzas and their prize was equal to 41$.

Coinmarketcap, a site that tracks the prices of all crypto-coins, has the first record of Bitcoin on April 29 of 2013, with a price of 134.04$. The price skyrocket in December of the same year, reaching 909$ but declined soon. The year with the best performance was 2017. The price from approximately 1000$ at the beginning of the year reached near 20,000$ at the end of the same year.

The price of Bitcoin after the bubble, declined to the lowest value of 3,243$, since then. Now the price is gaining value and after some fluctuations are traded at 7,000$.

Graph showing Bitcoins fluctuations in price, from coinmarketcap.

All that is said, so everyone who is not familiar with the value of Bitcoin, will understand the high volatility of the currency. It is good for traders when they know what they are doing, but not good for the people who want stability and usability for common use.

Stablecoins

Here come the stable-coins in the game. Back in 2014, the first stablecoin BitUsd was released. From then until now, many new stablecoins are created. But what exactly is a stablecoin? As the name implies, it is a coin that retains his value at a fixed price. We could distinguish them in two categories:

Fiat-collateralized, these stablecoins have a fixed price against fiat currencies like USD and Euro.
Commodity-collateralized, these stablecoins are pegged to real commodities like gold and silver.

With simple words, their value is connected with other currencies or goods, that have a non-volatility value. They are used from traders giving them the ability to liquefy cryptocurrencies without the need to convert them to fiat. Likewise, they are more cost-effective and easier to transfer across exchanges.

Today, the most accepted stablecoin with the biggest capitalization is Tether (USDT) and is ranked at the 4th position between all cryptocurrencies. Recently, the same company has launched Tether Gold (XAUT). One token represents one troy fine ounce of gold on a London Good Delivery gold bar.

The stablecoins with the biggest capitalization are:

Tether (USDT)
USD Coin (USDC)
Paxos Standard (PAX)
Binance USD (BUSD)
True USD (TUSD)
Multi-collateral DAI (DAI)
Stasis Euro (EURS)
QCash (QC)
USDK (USDK)
Single-collateral DAI (SAI)

For a more analytic list of stablecoins you can visit cryptoslate. Have in mind, a lot of companies out there, are trying to develop stablecoins. In the past, some of theme have failed. Take for example NuBits and BASIS.

Even Facebook is developing his own stablecoin, Facebook Libra (LIBRA). The governments of the USA, France, and Germany banned the coin. There is a lot going on, the one whos controls the money, gains a lot of power, and we will not allow that to happen.

They are afraid that the use of Libra will affect the value of the local currencies, and if you think that Facebook has an audience of 2 billion people, probably they have right.

The benefits of using stablecoins are that they have a stable value and can be transferred across the world instantaneously with a near-zero cost.

Finally, a tip from me. If you are a millionaire you can buy stablecoins and especially Tether and make a lot of money without risks. If you take a closer look at the charts you will notice that there is a fluctuation in the price, about plus-minus 1 cent. Make the math and tell me if you agree that it is better to trade the stablecoins for one year compared with having your millions sitting in the Bank?

I write about a lot of things including cryptocurrencies. If you like to hear news from me, stay in touch.

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