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As cryptocurrency works its way toward mass adoption, one of its biggest obstacles is volatility. Markets change overnight, and we’re so desensitized to it that we don’t even blink at dips that would bring national economies to their knees. Stablecoins – cryptocurrencies that are tied to existing currencies or commodities like the US dollar or gold – are fungible, easily traded assets that bring us one step closer to mass adoption. While promises of $1 = 1 coin make stablecoins appear simple, stablecoin projects rely on complex algorithms to do the following: Keep the currency’s value from inflating, (e.g., increasing over a dollar) Keep the currency’sPowered by WPeMatico
When it comes to Bitcoin, the main barrier to mainstream use is the volatile price. Microsoft started accepting Bitcoin, then stopped, and then welcomed it back. Bitcoin, which was intended to solve the currency inflation problem, has rather turned into a means of storing value. It’s too precious and too unpredictable for real-world usage. The crypto community has tried to address this problem with stablecoins. Recently, GV (formerly Google Ventures), Bain Capital Ventures, Lightspeed Venture Partners, Andreessen Horowitz, and Sky Capital invested $133 million in Basis, a startup that created a cryptocurrency with a stable, predictable value. Basis tackles the volatility problem by creating morePowered by WPeMatico