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Sell BUSD – Stablecoins Explanation
Stablecoins are cryptocurrencies whose price is controlled by an active or automatic monetary policy with the aim of low volatility against a national currency or even other assets. With the current development in the world of cryptocurrencies and the unprecedented growth, a change is taking place in the financial world.
While cryptocurrencies represent a new opportunity for the financial system, the volatility associated with them creates uncertainty for some potential buyers. Many financial institutions have taken advantage of this drawback of cryptocurrencies, which has more or less affected their general acceptance.
A stable coin is basically nothing more than digital money. Although there are some subtypes that will not be discussed here, the easy-to-understand phrase is that a stable coin is digital money. Normal money, like the euro or the dollar, can be converted into a cryptocurrency like bitcoin. In other words, a stablecoin is a cryptocurrency that is calculated on the value of an underlying asset. This underlying asset can be either a fiat currency, gold, silver or even other cryptocurrencies.
The development behind stablecoins
Simply put, stablecoins bridge the gap between the traditional financial system and the future. It is important to realize that the traditional financial system holds a strong position in the global financial market and cannot be replaced. On the other hand, cryptocurrencies have already given a taste of what eliminating a middleman can bring in terms of better returns, more transparency, and creating a trust-based environment. You could say stablecoins are a synergy of both.
Various types of stablecoins
While there can be various categorizations of Stablecoins on the internet, the following are the most basic and well-known types: collateralized Stablecoins are Stablecoins that are backed by collateral. Depending on the asset, they can be further categorized as follows: Fiat-backed Stablecoins, Asset-backed Stablecoins, Crypto-backed Stablecoins, Non-backed Stablecoins and Hybrid Stablecoins.
These are the most common types of stablecoins used in the market. Even some major central banks like the Central Bank of England have started issuing these stablecoins. The first and most popular such cryptocurrency coin is the Tether, represented as USDT. Tether is pegged to the US dollar. In case a stablecoin is tied to an asset other than a cryptocurrency or a fiat currency, it falls under this category. For example, the most common examples of such assets are precious metals such as gold and silver, diamonds, oil, and real estate.
Other variants of Stablecoins
Asset-backed stablecoins are crypto-backed coins. They use protocols to ensure that the value does not fluctuate with the price of the backing token. The so-called DAI token is a crypto-backed stablecoin backed by Ether and pegged to the value of the US dollar. The price is maintained by the Maker Smart Contract, which generates MKR tokens in response to fluctuations in the price of ETH.
The simplest form of stablecoins, based on nothing more than decentralization, is called unsecured stablecoins. In order to remove the dependence on a third party such as a custodian issuing stablecoins and shift that dependence back to algorithms, unsecured stablecoins do not rely on a central authority. Instead, they are based on a formula derived from supply and demand. Hybrid stablecoins are a synergy of collateralized and unsecured stablecoins. Essentially, these stablecoins are tied to an asset. However, they are modeled by an algorithm. These coins are inherently complex as they are a hybrid of two different and already complex concepts.
Buy & Sell Stablecoins
The purchase is made via the current rate, the desired amount is converted and after a confirmation, one collects the digital currency in a so-called wallet. From there, a shipment can be made, a sale or purchase of goods. Whereby such a purchase is of course something different than an investment. If you really want to invest, you wait for the right price and then sell again to make a profit. And when the price is low, a new purchase is made. This is the principle that can be easily implemented on our site.
Selling Stablecoins is just as hassle-free and without any major inconvenience as buying them. For whatever reason, one can simply make an exchange of the currencies directly from the wallet. The timing can be chosen by any client without any specifications. Most of those who really want to trade are guided by the current rates.
The actual selling process is quick to use for both new traders and professionals. Basically, everything is self-explanatory. In short, you specify the desired amount, get the equivalent value, based on the current rate, displayed and can confirm – or do without. And when a transaction has taken place, there is an overview. There are matching photos on the website, but specifically with Bitcoin as the currency.
The difference from bitcoin
Stablecoins and the Bitcoins are not identical, it must be clearly emphasized at this point. The Bitcoin is the best known cryptocurrency on the market. The term that plays the main role in this article is stablecoins, as they were described before. In other words, they are linked to other assets. It could directly reflect the value of a euro, but commodities such as gold or oil are also conceivable as underlying assets. The same cannot be said of Bitcoin. It is a currency in its own right. Only the way of trading on the website Zeply.com can be done in the same way.