Stable

Despite the certain advantages of cryptocurrencies, they are still subject to high volatility (or instability), which greatly complicates daily use as a means of payment or commodity. To solve this problem, the so-called stablecoins were created, which are resistant to fluctuations in the exchange rate and have a fixed value.
The main idea behind stablecoin is to provide the best opportunities in the cryptocurrency world and the banking industry.

Types of stablecoins:

1. Backed by Fiat

They are a kind of IOU, in which case each "coin" will be tied to a unit of fiat currency (for example, the US dollar), which acts as collateral. The collateral is held by a third party - most often it is a depository bank.

2. Backed by cryptocurrency

A more reliable and liquid digital instrument is used as the underlying asset. Basically Bitcoin, Ripple and Ethereum are used for collateral. Reinforcement can be either one or several cryptocurrencies. To issue a stablecoin backed by another cryptocurrency, the issuer of the stablecoin must have double the amount of the underlying asset in reserve. For example, if such a cryptocurrency is equal to the value of 1 ETH, then for each stablecoin, a collateral of 2 ETH is required. If the price of the collateralized cryptocurrency decreases to a critical minimum, stablecoins are automatically liquidated.

3. Unsecured stablecoins

The stability of the unsecured coin rate is achieved through seigniorage.
Seigniorage is the income that is generated by the issue of money and is assigned by the issuer. It is widely used by states that profit from increasing the money supply.
Stablecoins that are not backed by other underlying assets are regulated through smart contracts, which guarantees decentralization and transparency in pricing. But, they are the least reliable and, if interest from investors falls, they can completely cease to exist.
The coin holders receive shares for a share in the future seignorage, this concept is called seigniorage shares. Seigniorage is the income that is generated by the issue of money and is assigned by the issuer. It is widely used by states that profit from increasing the money supply.

Perhaps a new unit of measurement of value awaits us ahead, one, stable and independent. Intercontinental, without barriers, intermediaries and central issuer.

What will our new world be like?