Steadying The Ship: Could 2020 Be The Year of The Stablecoin?
Oleg Spilka | Oct 09, 2019 11:27AM ET
It’s been quite a decade for the world of cryptocurrencies. We’ve traveled from humble beginnings to see Bitcoin conquer the world, momentarily - before giving way to the more volatile form we see today.
There is, however, a new blockchain-driven digital currency that could well stake a claim in becoming the biggest alternative place to store our money as we continue to transition into becoming a cashless society.
The stablecoin is a relatively new entity on the crypto-market. They’re very similar to the likes of Bitcoin and Ethereum in that they’re also blockchain-powered, decentralised and heavily secure. However, while Bitcoin is capable of experiencing dizzying highs of achieving values upwards of $20,000 and heavy price drops overnight, the stablecoin is designed to be more, well, stable - meaning users will have less reason to fear these particular cryptocurrencies.
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Because stablecoins defy the uncapped Wild West of many cryptocurrencies today, the fact that they’re hard-wired to physical currency helps to keep the digital payment method free from volatility.
At a time when Ethereum are struggling to follow-up on their respective successes towards the end of 2017, the prospect of dependable currency is building in popularity.
(Bitcoin’s price history over the past five years: Stablecoins steer clear of volatility by tying themselves to real-world assets, like USD or gold. Image: Bitcoinwiki )
In fact, such is the popularity of stablecoins that Facebook has announced that it’s looking to get into the act - having forecast their own stablecoin, Timvi (TMV) - a stablecoin secured by the ETH-deposits of the ecosystem’s participants.
The jewel in the crown of stablecoins is their blockchain-based framework. Not only could they make for a truly borderless means of payment, with significantly lower processing fees attached, but can be much more prohibitive .
When Bitcoin was launched, over ten years ago - it was done so with a keen eye on creating a more appealing alternative to the restrictive and insecure confines of the currencies of the time. But alongside other forms of digital finance, Bitcoin was overrun by investors keen on turning their assets into profit.
To say Bitcoin hasn’t been a success would be to miss the point. Its popularity has brought significant viability to the realm of cryptocurrencies as a whole. But it is fair to say that most crypto assets aren’t the sort of thing you’d use to buy milk on a Friday morning.
That’s where stablecoin may enter the fray. Free of volatility and with the potential to be used anywhere in the world, 2020 could be a breakthrough year for the refreshing new take on the brave new world of crypto. With digital behemoths, Facebook getting in on the act, anything’s possible in the steady waters of stablecoin.
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