Wikicoin Vera Thornpike

Top 5 Ripple Wallets in 2018

📚 Wikicoin
There’s no better way of securing your crypto assets than a reliable wallet: consider these top 5 choices
Top 5 Ripple Wallets in 2018
Contents

Crypto wallet is an irreplaceable part of your investment activity. But how to select a reliable and functional option? Let’s consider Top 5 Ripple wallets and find out how to pick the right one for you.

It’s been two years since cryptocurrencies started to make waves, and many altcoins grew in price as much as the leader, Bitcoin, did. There are many decent investment opportunities around, and one of them is Ripple (XRP). Having been invented as far back as 2004, it grew at a remarkable rate in 2017, and now is in the Top-10 cryptocurrencies. The coin is widely used for international transactions and is currently being tested by governmental banks, especially the ones in Asia. Despite being the third largest cryptocurrency by market cap (close to 18 billion US dollars), XRP is very cheap compared to Bitcoin and Ethereum, so right now you can still buy a handful of coins without having to take out a second mortgage on your house.

If you’re ready to jump on the Ripple bandwagon, then you need a reliable and functional wallet. Let’s observe five worthy solutions and find out why an accurate XRP wallet selection is more important than you may think.

Main vulnerabilities of cryptocurrency wallets

Like any other online product, online cryptocurrency wallets are prone to attacks and failures. These are the main five crypto wallet vulnerabilities:

Main vulnerabilities of cryptocurrency wallets

How to choose the best wallet for Ripple?

Not all Ripple wallets are created equal, as it were, so you need to perform a thorough market analysis before investing. The prime motivation for using a good wallet is the safety of your assets: without a rock-solid security, no digital solution has any real value.

So, what should be taken into consideration when picking up the best XRP wallet?

  1. Does the wallet support Ripple? This is the most essential question. The Internet offers a myriad of versatile crypto wallets, but sets of supported cryptocurrencies differ from one solution to the next.

  2. Is it secure enough? The absence of proper security measures takes away from most of a wallet’s value, which means that your virtual money could be stolen any time. Check whether the wallet provider implements a two-step authentication, cold storage, backup, and other security tools. An SSL certificate is a must-have for online services, too. An offline Ripple wallet is considered to be a safer option.

  3. What’s the fee/cost? If you’re going to handle huge amounts of cryptocurrency, investing in a hardware wallet for Ripple can be a more cost-effective solution compared to online storage.

  4. Is it compatible with mobile devices? Every self-respecting crypto wallet provider offers both desktop and mobile versions for their clients’ convenience. Make sure that your iPhone, Android, BlackBerry, or any other device supports the software.

Cold vs. hot wallet: which one is better?

Cold storage means using a hardware wallet for crypto assets. It is recommended for users who want to safeguard their coins instead of entrusting funds to third parties. This is a safer but also a less convenient option because you cannot perform cryptocurrency operations on the go. For this reason, some traders use both kinds of cryptocurrency wallets: online services for trading, as well as hardware wallets for storage only.

Now that the stage has been set, the time is ripe to actually have a look at the best Ripple wallet options.

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Binance

When talking about cryptocurrency exchanges, Binance is one of the first names that springs to mind. This crypto service is rapidly growing and now also offers its users Ripple wallets. However, it’s better suited for short-term coin storage: as a general rule, you shouldn’t store currency there for more than 1–2 days, because exchange issues may appear out of the blue.

“Why use it at all?”, you may ask. Well, Binance is perfect for instant buying and storing of XRP since you can claim a 50% discount on trading fees when you exchange Bitcoin to Ripple.

Ledger Nano S

This hardware wallet supports a number of cryptocurrencies, including Dash, BTC, ETH/ETC, Stratis, and Zcash. This crypto storage solution offers high-level security, ease of use, and portability. It looks like a USB device, so you can carry it in your pocket without having to be wary of any prying eyes. It allows you to control transactions with the help of a button and features a secure password system. You can send and receive coins and make automated account backups (there’s an individual recovery sheet applied to every device). The gadget can be ordered online: in 4–7 days, it will be delivered to your doorstep.

Ledger Nano S

Toast Wallet

But where to store Ripple for free? Try Toast, an open-source Ripple wallet which is accessible to anyone. Its salient features include:

  • Compatibility with Windows, Android, Mac, and iOS. Each application is well thought-through and fast.

  • Zero fees for both storage and transactions. Do bear in mind, however, that you need to have 20 XRP in reserve to process your transactions.

  • Toast Ripple wallet App has intuitive navigation coupled with a user-friendly interface.

Toast wallet is a bare-bones solution that will be perfect for starters to get their feet wet and learn the basics of cryptocurrency handling. It is simple enough for beginners to manage, and yet, supposedly, as safe as a Swiss bank. Another good news is that Toast is not a hosted wallet, which means you will have total control over your private keys.

Toast Wallet

Jaxx Wallet

This software was developed by the man who started investing in crypto very early on and helped to found Ethereum. In trying to figure out how to store Ripple safely and reliably, he developed Jaxx Ripple wallet. This is a multicurrency HD wallet that allows for storage of over 60 coins and lets its users control the seed and PIN. This software boasts the whole gamut of features, including:

  1. Custom fee options: high (fast transactions), average, and low (slow mining fee). The normal fee is recommended for an easy transaction confirmation.

  2. A QR scanner for better precision and accuracy of transactions.

  3. Exporting and importing of private keys.

Jaxx also provides an added bonus of the best exchange for Ripple: one coin can be converted into another in the app itself, so the investors are free to make transaction decisions right there and then.

Check out available Jaxx versions:

Android

Mobile & Tablet

iOS

Mobile & Tablet

OS X

Desktop

Chrome

Browser Extension

Windows

Ripple desktop wallet (x64) / (x86)

Linux

Ripple desktop wallet (x64) / (x86)

CoinPayments

CoinPayments is not just a desktop wallet for Ripple. As its name suggests, it is a cryptocurrency payment website where you can store currency online. It accepts over 900 altcoins, a record-breaking number for an exchange platform. CoinPayments functions like a physical bank — it allows exchanging of coins and shopping online — and has a low transaction fee of 0.5%. The fee is applicable to:

  • commercial deposits;

  • incoming payments;

  • transactions, regardless of their size.

Personal deposits and withdrawals are 100% free unless you use them for commercial items or shopping. To top it off, CoinPayments is highly convenient for online purchases: it partners with a wide range of e-commerce websites and stores, over 296,000 online vendors to be exact. Exceptional security level is achieved thanks to the BitGo multi-sig technology. So if you want a cheap and breach-proof solution for cryptocurrency storage, CoinPayments is exactly the thing.

10 ways to secure your cryptocurrency wallet

All cryptocurrency owners are potential victims of hackers. Although the aforementioned solutions are safe, you, as a user, bear the primary responsibility for the security of your assets. Here are a few professional tips:

  1. Do not install external mobile applications unless absolutely necessary.
  2. Activate a Two Factor authorization in both the app and on the web.
  3. Whenever someone sends you links, always double check them.
  4. Beware of Slack bots! Do not click on any links the bots send you. You can also protect your device against them by using Avira antivirus, Metacert, or Webroot security, as well as built-in Google Safe Browsing.
  5. When you’re engaged in a crypto trading activity, use a separate browser for the operations with crypto coins. It’s also better to choose an incognito browsing mode; in fact, ideally, you should have a separate PC or another device for crypto trading.
  6. Do not download crypto add-ons. Use antivirus for network protection.
  7. Do not perform transactions via public Wi-Fi, even if you use a VPN.
  8. Keep updating your router firmware regularly: hardware manufacturers release updates for protection against key substitution.
  9. Do not interact with websites without an HTTPS protocol.
  10. If something seems suspicious in the messages you receive, close the window and delete that letter from your inbox.

Bottom Line

Although the Blockchain is a safe technology in and of itself, it’s not immune to security breaches, which means you still need a safe place to store your cryptocurrency coins. The Internet offers a myriad of exchange platforms and crypto payment services that provide crypto wallets. These websites should be chosen wisely: some of them are prone to hacking, while the others may charge astronomical fees.

Bottom Line

So, what is better, an offline Ripple wallet or an online service? It depends on the frequency and size of your transactions. Cold storage is used for long-term investment; this feature is provided by hardware wallets. If you are going to trade actively and perform transactions on a daily basis that involve smaller amounts, then online services would be more appropriate for you. They can be used on the go, and their transaction fees are pretty low, though how low exactly would depend on the actual platform you opt for.

All of these Top-5 solutions are dependable and functional enough to meet the desired objectives of any crypto investor. So, if you’re ready to stock up on Ripple, pick up one of them and sleep soundly knowing that your assets are safe!

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WikiCoin: How Bitcoin Transactions Work

📚 Wikicoin
One of the most touted advantages of Bitcoin is the high security, convenience and immutability of its transactions — but what are the details of this process?
WikiCoin: How Bitcoin Transactions Work
Contents

 

Once you bought some Bitcoin and placed it in a wallet, you may wonder how Bitcoin is actually transferred between users. It’s an intricate, but also an ingenious process which makes Blockchain technology so unique.

Cryptographic keys

Somewhat counterintuitively, your digital wallet doesn’t actually hold your coins — rather, it holds your Bitcoin address and a record of all your transactions. The address is an also known as the “public key,” which consists of 34 letters and numbers. The public key corresponds to another, “private key,” consisting of 64 letters and numbers. While the keys are related, and everyone can have access to your public key, there is no way to deduce the private key from the public key.

Digital signatures and validation

Any transaction initiated by a user gets “signed” by putting the private key and transaction details into the software on the user’s computer or mobile device. Then, this signature goes out to the network to be validated. The process of validation makes sure that the user actually has the Bitcoin he or she is trying to transfer, and that this Bitcoin has not been sent to anyone else. Bitcoin Blockchain software uses the generated signature and the public key (open to everyone) to check the public transaction history and validate the transaction — without having to reference the private key.

You can never break the chain

After being validated, the transaction is included in a new “block” along with other transactions. So blocks are bundles of new transaction data, but what makes the entire structure a “chain”? The answer is — each new block includes a “hash” of the previous block. A “hash” is produced by a function that transmutes any set of data into a 64 character string. If there is the slightest change to the original data, the hash becomes a completely different string, impossible to predict based just on the data change itself. Therefore, if someone changes a transaction inside a block on the chain, this will change the block’s hash. To “cover up” the change in the block, all subsequent blocks will need to be altered. The difficulty of this so high, it makes Blockchain transactions nearly hack-proof.

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Top 10 ICOs by Funds Raised, From Filecoin to TRON

📚 Wikicoin
The top 10 ICOs by funds raised have a combined total of $1.4 bln
Top 10 ICOs by Funds Raised, From Filecoin to TRON
Contents

The past year has had much excitement in the crypto market with ICOs becoming a mainstream event and seeing a lot of headlines in the news. The following is a review of the top 10 ICO by the amount of funds raised.

Top 10 ICOs by Funds Raised, From Filecoin to TRON

1. FileCoin $257 Mln

The true king of the crypto ICOs, FileCoin raised the most. FileCoin is offering a decentralized storage service with ultra-competitive rates for users. Other users can rent out their storage space for payment in filecoin. The token is trading at $11.21 down from a high of $27 in December 2017. Currently, they are accepting early miners in the pilot program. It is too hard to tell if/when FileCoin’s decentralized storage system will get off the ground.

2. Tezos $232 Mln

Tezos erupted onto the market with its astounding $232 mln ICO, but quickly lost control of most of its funds due to infighting and now trying to stave off pending legal cases. These legal cases are based on infighting between partners, which has caused the company to halt work. In more recent developments, some of the partners have gone rogue and pushed ahead with development. Despite the deluge of bad news, that would usually decimate a company’s stock price, Tezos token has appreciated, causing some to believe that it will actually be worth something in the end.

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3. Paragon $183 Mln

Despite raising more than $100 mln during the ICO, the token price tanked a day after the launch starting at $1.68 per token and falling to $0.48 only three days later. On Dec. 21, 2017, there seemed to be something of a pump and dump when the token price surged to an all-time high of $4.11 and then crashed back down $0.52. Paragon is currently trading at $0.28 at time of writing. It suffers from the debilitating effects the Marijuana grey zone that is found in the US: some states approve it, but the federal government says its illegal. This is a big no go for financial institutions that are obedient to the feds.

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4. Finney $158 Mln

Sirin labs have used Finney as an ICO to raise some massive funding to run a project on Blockchain-powered devices such as smartphones and computers, citing that traditional operating systems are vulnerable to hacking and leave users exposed to risk. Finney is the name of the smartphone that is currently in development, and in April 2018, it was announced that electronics manufacturer Foxconn will work with Sirin to produce the phone. Furthermore, Sirin Labs plans to deliver a “decentralized app store run by the community” where “cost-bearing apps are based on a secure P2P resource-sharing system, which distributes fees between users and developers.” However, which community are they talking about? This leaves a lot of questions to be answered.

5. Bancor $153 Mln

The Bancor Protocol is a technical revolution allowing tokens to be converted without matching two parties with different wants. The magic is in the math, with a simple formula balancing buys and sells so that every token in the network maintains a formulaic relationship to others. The result is continuous liquidity regardless of trade volume or exchange listings. When Bancor token debuted on July 17, 2017, it entered the market at $4.49 per token. By November 2017, it has crashed down to $2 per token losing 50 percent of its value in four to five months.

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6. Status $102 Mln

Being Ethereum’s browsing tool for searching and making payments, on the side of representing a messaging application, Status has raised a substantial amount of funding despite not being too well known outside of the smaller circles. Status trades at $0.11 up from the entrance price of $0.06 from late June 2017.

7. Kin $98 Mln

The Kin Ecosystem Foundation aims to bring all digital communications under one umbrella, such as chat apps and social networks. The ERC20 token will be used for all transactions in the Kin Ecosystem. It has attracted the attention of many investors, as it raised a substantial amount in its ICO. However, in March it was announced that Stellar would be taking over as the payment system: “Kin transactions will now take place side-by-side on Stellar and Ethereum, unlocking faster transactions for digital services, while continuing to provide liquidity to Kin holders,” according to a press release on PR Newswire. This raises doubts about whether the currency can function as no Dapps of Kin have been launched.

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8. Elastos $94 Mln

Elastos’ technology attempts to create a new kind of Internet, powered by Blockchain technology. On this new Internet, people will be able to own digital assets and generate wealth from them. The goal is to create an Internet that allows users to access articles, movies and games directly, without going through a media player or another platform intermediary. Elastos will use Blockchain technology to issue IDs for digital content, making it possible to know who owns which digital assets. It recently had its ICO in February 2018, since then the token price has returned close to its introductory price of $44.

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9. TenX  $80 Mln

TenX is making crypto more of a tangible payment system by creating actual debit cards that are linked to a TenX wallet. The company has a forthcoming banking license in the works and intends on taking its everyday payment system mainstream. With technology like this, it is surprising that the company did not raise more in its ICO. The TenX token has been on a steady decline since its release with an all-time high of $5.26 during the 2017 December rally down to $1.25 as of mid-May 2018. The token price might not go to the moon, but the debit card might end up in a few wallets.

Top 10 ICOs by Funds Raised, From Filecoin to TRON

10. Tron  $70 Mln

Tron made a big splash onto headlines in December 2017, as its technology is set on decentralizing the entertainment industry. The idea was to enable compensation for content creators, such as singer/songwriters, artists, bands, performers, and anyone who is an entertainer. Hitting an all-time high in December at $0.25, it has crashed to only $0.07 and remained there, as there has been lots of controversy on whether this is a scam or a legitimate token.

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Ethereum Price Prediction in 2020\2025: How Much Will ETH be Worth?

📚 Wikicoin
What will Ethereum price be in the future?
Ethereum Price Prediction in 2020\2025: How Much Will ETH be Worth?
Contents

Find out why Ethereum is among leading cryptocurrencies, which factors determine the coin value, and read Ethereum price predictions for 2018 and the upcoming years.

Cryptocurrency has turned into the modern buzzword, and Bitcoin is not the only virtual asset worth investing into. Since Ethereum has come into the scene, the situation changes: today, it’s the second most valuable coin after Bitcoin, and its popularity is expected to rise. Let’s figure out what Ethereum value prediction for the future is, and how you can use it.

What makes Ethereum so special?

The cryptocurrency invented by Vitalik Buterin has turned out to be something different from Bitcoin: Ethereum is based on smart contracts and is Turing-complete, which accelerates hash time and reduces processing time for transactions. The smart contracts enabling Ethereum system are now being widely implemented in the vast majority of Blockchain-based applications and environments.

Current position

Today, Ethereum is the second market holder– it retains the position since 2017, and it’s not likely that things will change. Ethereum

Period

Average Ethereum price ($)

January 2017

7.98

April 2017

50.03

June 2017

230.9

August 2017

204.7

September 2017

383.5

November 2017

305.8

December 2017

755.8

price prediction for 2017 was totally justified: the cost has soared from $8 in January 2017 to $755 in December 2017.

In terms of growth rate, Ethereum is one of the most quickly developing cryptocurrencies, and this tendency remains.

Ethereum Price Prediction in 2020\2025: How Much Will ETH be Worth?

Ethereum price chart Jan 2017-May 2018

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Why do investors bet on Ethereum?

If Ethereum predictions 2017 were totally justified, does it mean this cryptocurrency is worth investing? A large number of professional traders and investors share the opinion that it can hit the numbers during the upcoming years. We have already witnessed it soar to $1,377 in January 2018, and the experts of Eth price prediction say that as soon as it passes $1,000 threshold, it will be easier to climb up.

The rumor goes that Ether price prediction by the end of 2018 is $10,000! Is that possible? Here are a few points to be considered:

  1. Just like any other cryptocurrency, Ethereum is prone to market fluctuations. Although it weathered the market correction, it fell from the above-mentioned $1,377 to the current level (about $710 in May 2018) facing the dip of almost 40 percent. However, if we look at the overall backdrop of the crypto market, this dip isn’t dramatic.
  2. Ethereum-based Blockchain and smart contracts are being widely implemented into new startups popping up here and there. Entrepreneurs and app developers rely on Ethereum Blockchain, and it means that they trust the currency, as well. There’s no reason for ETH to lose its popularity and value– its technical characteristics exceed what Bitcoin may offer.
  3. Another sign of trust is the fact that the Canadian government is willing to use Ethereum platform to develop its legal infrastructure. National Research Council of Canada (NRC) has started the investigation of Blockchain technology and how it can be used for making the public initiatives more transparent and open. What does that mean? First, it shows that leading nations are seeking to adopt Blockchain technology. Secondly, Ethereum is the very technology that can bring about groundbreaking changes. Therefore, the implication of this program can change the rules of the game– if they manage to establish Blockchain-based governmental programs in Canada, other governments will follow suit.

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Approximate future ETH value

Ethereum predictions for 2018 differ considerably: some claim that Ethereum would reach about $2,500, while optimists bet it can jump to $10,000. The second proposition doesn’t seem possible considering the fact that in May 2018 ETH price is around $710. The same optimistic forecasts promise that by the end of 2019, ETH value will reach $14,000, while Ethereum price prediction 2020 is $31,000.

Pure calculations

But why relying on what your friend or a friend’s friend says? Let pure mathematical approach help us. Here’s one trick, though: while the number of Bitcoins is limited, and all the assets will be mined soon, the supply of ETH in the future is unknown. We have no idea how Proof-of-Stake can alter Ether issuance. Judging by the original 2014 issuance model, the number of coins can reach 164 mln by 2020. However, Vitalik Buterin claims it will be about 100 mln, so we will base our Ethereum price prediction on 100 mln.

It is expected that both Bitcoin and Ethereum will represent 50 percent of crypto market value ($4.5 trillion), 25 percent each, which means $1,137,500,000,000 of the market will belong to ETH. Divide it into 100,000,000, and you will get $11,375 per coin.

But what will Eth predictions be, if both BTC and ETH become even more dominant than 50 percent of the market? Let’s assume they account for 33 percent of the market each– then ETH would get the value of $1.502 tln. Apply the same calculations, and you get $15,020 (this is over $5,300 from the current price).

Note that we didn’t take into account the market speculations, dividends from Proof-of-Stake, incentives and other external factors that may come into play.

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Long-term prognosis

What’s Ethereum price prediction for 2025? From the point of cryptocurrency economy, this seems to be a very distant future to judge. The vast majority of experts share one view: ETH price is to reach $30,000 in the long term. Some people are afraid of investing into Ethereum assuming this is a bubble. However, here we should understand two things:

  1. As a rule, ‘bubble’ assets go from the spheres that have no proper fundamentals to match the price growths. Ethereum is not a for-profit initiative, so it shouldn’t be approached like ‘bubble.’
  2. At the same time, the price of cryptocurrency is regulated by demand and supply. The demand for Ethereum is steadily growing– there are more and more investors willing to implement Ether Blockchain and rely on the currency behind it, so Ethereum future price prediction is quite optimistic.

Instead of monitoring the demand for Ethereum, better look at the application of Ether Blockchain– it has a huge potential, which means its price isn’t likely to drop dramatically.

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What are Stablecoins and What do They Mean for the Crypto Market?

📚 Wikicoin
Stablecoins are sure to bring forth a paradigm shift in the way cryptocurrencies operate
What are Stablecoins and What do They Mean for the Crypto Market?
Contents

Technology, sometimes, takes a long-winded, tortuous path. As we have often experienced in life, the graph of success is never a straight line. It’s filled with contours, slopes, steep valleys, and few peaks. When you think of cryptocurrencies and how far Bitcoin has come, you might be tempted to smile and count it as a remarkable success. But let’s take a closer look.

Traditional cryptocurrencies are extremely volatile. Let’s consider Bitcoin – at the beginning of 2017, it was barely $1,000, but before December of the same year, it peaked at $20,000. Cool, right? But as of June 2018, the Bitcoin price is hovering around $7,000.

Ethereum, Litecoin and other altcoins have demonstrated a similar behavior so we know that it’s not peculiar to Bitcoin alone. In fact, traditional fiat currencies also suffer from inflation and hyperinflation. Check out the case of Venezuela, Nigeria, Zimbabwe, and even some European countries. It seems as though the concept of a stable currency is an illusion. Is there a solution?

What are stablecoins?

The extremely volatile nature of cryptocurrencies makes them attractive for long-term investors, highly skilled short-term day traders and news analysts. However, this same characteristic makes them less than ideal for mainstream purposes.

What if we had a kind of cryptocurrency which could afford us the level of stability that we have with our fiat currency? Well, we do. We have stablecoins.

Stablecoins, basically, are cryptocurrencies which are stable in the purchasing power they possess. Even if they exhibit traits of inflation, this is in a bid to encourage the holders of this currency to spend rather than hold the currency. In other words, stablecoins are cryptocurrencies which have a fixed price, usually measured against another fiat currency.

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What are the properties of a stablecoin?

Now that you have an answer to the question, “what are stablecoins?” we can go on to explore what makes a stablecoin ideal. In essence, if a crypto can achieve the properties discussed below, it is an ideal stablecoin.

  1. Can the coin be used as a medium of exchange to trade goods and services?

  2. Can it be used to maintain wealth over a period of time without depreciating in value?

  3. Is it an appropriate measurement unit which can be used to define and compare different values?

  4. Is it scalable? Can it be used by 7 billion people?

If any cryptocurrency meets all four conditions, then we can agree that it is, indeed, one of the best stablecoins we have.

Why are stablecoins important?

All about stablecoins crypto involves stability and making cryptocurrencies parallel fiat currencies better. This is in a bid to diversify and have cryptocurrencies enjoy wider use, especially in practical applications. We can safely say that stablecoins would attract more than investors or short-term traders. The success of stablecoins will cause an average person to consider crypto for day-to-day trading activities. What more do we stand to gain? Here are some of the benefits of stablecoins.

1. Stablecoins hedge against volatility

Remember the time when Bitcoin was selling for $20,000? If you had 2 BTC and then decided to trade the BTC for a stablecoin which was measured in USD, the transaction would give you 40,000 units of stablecoins. Now that the price is around $7,500, rather than having $15,000, you would still have $40,000 worth of stablecoins. This is pretty impressive, right?

2. Stablecoins facilitate the global use of a stable currency

In countries like Nigeria and Argentina, the annual inflation rate can be as high as 15 percent yearly. For this reason, it is not unusual to see citizens of these countries seeking USD to preserve the value of their wealth. Think of the stress which will be eliminated if a digital, decentralized and stable currency was made available to the general public.

3. Stablecoins suit the crypto-based lending and derivatives market

A modern financial system with very minimal interference, human error and middle-men is perceived as the ideal concept of finance and cryptocurrencies provide that advantage. However, at the moment, it is impossible for capital markets to rely on cryptocurrency because of the lack of stability.

Providing or collecting crypto-based loans will prove daunting to both the lender and the borrower due to the fluctuations in price. Stablecoins will ensure that there’s a reliable price which one can expect.

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Types of stablecoins and how they are created

1. Fiat-collateralized stablecoins

These are quite straightforward and they are relatively easy to create. Using this method, a certain amount of fiat currency is held as collateral and then the coins are provided in a 1:1 ratio. The simplicity and flexibility of this approach make it ideal, but it requires a custodian and close monitoring.

2. Crypto-collateralized stablecoins

Instead of fiat currency, these have another cryptocurrency as collateral. Over-collateralization, the concept of paying more than is required – for example, paying $1,000 worth of BTC to receive $500 in stablecoins – is a common drawback of this approach. In the event that the crypto being held as collateral also loses its value completely, the holder of the stablecoins loses out.

3. Non-collateralized stablecoins

The concept of trading these stablecoins with the expectation that they will retain their value is, perhaps, the best alternative. The seigniorage shares approach which uses an automatically-programmed smart contract to control the supply of the currency has been hailed as the best alternative yet.

Different stablecoins in existence

If you think stablecoins are doomed to fail or that they are only good on paper, think again. We already have existing currencies which attest to the viability of the concept.

Tether

Tether is backed by a fiat currency and the currency is held in a reserve account. It uses the 1:1 concept, making 1 USDT equal to 1 USD. However, it is centralized and this brings an iota of distrust.

MarkerDao

MarkerDao is decentralized and also measured with respect to the US dollar. The Ethereum network is the underlying tech and stability is ensured by a series of smart contracts. The coin, Dai, is also worth 1 USD. However, it can prove complex and slow.

Havven

This system supports itself by providing two coins – Nomins, the stable coin which can be used during day-to-day transactions, and Havvens, the coin in reserve. It is fully decentralized and fast, however, it is relatively new and might not be fully trusted.

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