Bitcoin Global News (BGN)
September 25, 2018 -- ADVFN Crypto NewsWire -- Do you know what a
Stablecoin is and why it is important to the rise of
Cryptocurrencies? In the minds of Stablecoin creators and
supporters, it all comes down to bridging the gap between
traditional currencies or fiat and Cryptocurrencies.
Through the example of Tether,
despite the controversy that seems to consistently surround it, it
is fairly easy to see that Stablecoins lower the barriers for new
users to adopt Crypto, especially for trading.
From Bitcoin’s inception up until
very recently when the first Stablecoin projects came to be,
exchanging one Cryptocurrency for another was never an easy
process. As the industry has developed, so has the practice of
grouping Crypto projects by whether they are exchangeable with
Bitcoin or Ethereum. If you want a contemporary example of this in
practice, take a look at Abra, Shapeshift, and Changelly and test
out their services for yourself.
Even without finalizing a
transaction on these websites, it is easy to see that some exchange
pairs just do not work unless you constantly have a store of
Crypto’s two top currencies.
In one way, the is where Tether
comes in. In being pegged to the US dollar, it has in turn, pegged
itself as the solution for users to truly easily use fiat
currencies on the Blockchain.
Even so, this proclamation is
optimistic at best, especially with the continuing saga surrounding
its inability to prove the dollars that supposedly back every
Tether coin that is created.
This, in turn, has definitively
created new opportunities for other Stablecoins to step to the
front of the line, so to speak.
Most of them, however, are not
connected to traditional currencies as directly as Tether claims to
be. In addition to this, based on traditional financial indicators,
none even come close to Tether’s relatively leading position on the
market.
Maker DAO’s DAI is one of the few
that do, given its already widespread acceptance by industry
leaders like Binance. Even so, they have faced their share of
criticism, especially due to their supposed underlying structure
being based on derivatives, which some say crashed the global
financial market ten years ago.
Despite this, Andreessen Horowitz,
the Venture Capital firm that is run by Marc Andreessen of Netscape
fame, has invested $15 million to gain a 6% stake in Maker DAO’s
DAI coin, as of yesterday.
As to why they did this, Rune
Christensen, MakerDAO’s CEO, was quoted as saying that AH’s support
means being able to lead the project in a more efficient way
towards its goal of becoming the most adopted Stablecoin in
history.
Now, all that remains is to see if
the three years of support that the VC has pledged can do the trick
to bring this about.
By: BGN Editorial Staff
News:
MakerDAO
Cryptocurrency