Everything you need to know about stack coins

Cryptocurrency is known to be very volatile in terms of value, which is due to high volatility. Volatility can be described as uncertainty associated with a price, and in the event of high volatility, violent price changes in a short time are common.

Precisely this high volatility makes many people skeptical about investing money in cryptocurrency. The investment can quickly lead to a loss of money, although it can also provide a large gain in a short time.

Stablecoins are considered by many to be a good alternative to cryptocurrencies with high volatility. Here we will take a closer look at what stack coins are, and whether this is a more favorable alternative than classic crypto.

What are stack coins?

Stablecoins can be described as cryptocurrencies that are directly linked to a more stable asset. Stable assets can be, for example, commodities such as gold or fiat currencies such as the US dollar. These do not have as much volatility as ordinary cryptocurrency.

Although stablecoins have similar volatility as stable assets, it is still a decentralized currency on a par with other cryptocurrencies. In other words, Stablecoins are not affiliated with any central bank.

Stablecoins can in many ways be considered fiat currencies represented through blockchains.

What are stack coins used for?

Stablecoins are mainly used as a “safe haven” when there is a lot of volatility and turmoil in the market for ordinary cryptocurrency. Many of those who speculate and invest in cryptocurrency do not want to return to traditional currency, and then stack coins are a good alternative.

If you want to jump back into the regular cryptocurrency market again later, this is of course entirely possible.

The reason why many do not want to go back to traditional fiat currency is that cryptocurrency can offer benefits such as faster and more anonymous transfers. With stack coins, you get the best of both worlds: the stability of Fiat money, and the agility of cryptocurrency.

Different types of stack coins

Stable cryptocurrencies or stack coins are available in three different categories. The most common is the variant that is secured in fiat money, such as euros or US dollars. You can also have security in gold or silver, and raw materials with a stable value.

Stable coins with security through fiat are often called ” fiat-collateralized stablecoins “. Another form of stablecoins is cryptocurrency which has another cryptocurrency as security.

The latest form of stack coin is the variant that has no security. This is often referred to as an “algorithmic stack coin”, as they use mechanisms that make it possible to adjust offers to achieve stable value. An example of such a stablecoin is Ampleforth.

Several popular stack coins on the market

There are several types of stack coins available on the market. If you want to buy stack coins, it is important to find a favorable variant that suits your needs.

Let’s take a closer look at the most common forms of stack coins.

Tether (USDT) – Stacked coins denominated in US dollars

Tether – also known as USD Tether or just USDT – is a frequently used stack coin. This is the most well-known form of stablecoins, and the currency is locked in US dollars. At many of the crypto exchanges, you can exchange regular cryptocurrency for Tether with a few keystrokes.

With Tether you can look forward to high stability, and many people switch to Tether if they discover that, for example, Bitcoin is crashing in value. Tether came on the market in 2014, and has since become a popular choice for many who invest in cryptocurrencies.

USD Coin (USDC)

USD Coin or USDC can be described as a digital stack coin that can be linked to US dollars. In other words, USD Coin is a fiat-collateralized stable coin, and follows the exchange rate of the US dollar.

USD Coin is one of the most popular forms of stack coins on the market, and uses systems such as Solana, Tron, Ethereum, Algorand and Hashgraph.

Dai (DAI)

DAI is another popular stablecoin, and runs on the same software as Ethereum. The solution maintains a value equivalent to 1 USD at all times, which ensures a stable value of the currency.

However, DAI does not have security in USD, but rather in the Maker platform. DAI is a popular alternative for those who want cryptocurrency with low volatility.

Binance USD (BUSD)

A fourth stablecoin that is very popular is the Binance USD. One unit of Binance USD will always have the value of 1 USD. BUSD is approved by NYDFS which is the financial authorities in the USA.

Binance USD is also a good alternative for you who are looking for a stable form of cryptocurrency, which for example can be an alternative to Bitcoin.

How to invest in stack coins?

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There are several different crypto exchanges that allow you to invest in stack coins in a safe and easy way. We can mention Binance, among other things. Here you can buy Dai, among other things.

EToro also has a wide selection of stack coins. We can mention BTCEUR, ETHEUR, ETHGBP, BTCGBP, XRPGBP and BTCJPY, among others.

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Is it smart to invest in stack coins?

Yes! If you want to invest in cryptocurrency, but at the same time think that it is too high volatility, stack coins are a good choice. This is still a cryptocurrency, only with long higher stability.

This means that there is a lower risk that you will lose money, since the value is kept stable. Investing in stack coins can be a good idea for both amateurs and advanced crypto investors when things are going badly in the crypto market.

Invest in stack coins today

If you want to invest in cryptocurrency, but think that volatility is too high, stack coins can be a good idea.

Find a crypto exchange and invest in stack coins, so you get more stability and predictability when the value of traditional crypto fluctuates a lot.

FAQ

[sc_fs_multi_faq headline-0=”h2″ question-0=”Hva er forskjellen på stablecoins og tradisjonell kryptovaluta?” answer-0=”Stablecoins og kryptovaluta er mer eller mindre akkurat det samme, bare at volatiliteten til førstnevnte er lavere. Husk at stablecoin fortsatt er en kryptovaluta.” image-0=”” headline-1=”h2″ question-1=”Hvor kan man investere i stablecoins?” answer-1=”Du kan investere i stablecoins hos kryptobørser som eToro og Firi (MiraiEx). Her kan du blant annet investere i DAI. Utforsk mulighetene dine.” image-1=”” headline-2=”h2″ question-2=”Hvilken stablecoin er best?” answer-2=”Tether er en av de mest kjente og populære formene for stablecoins, og kan være et godt valg for de fleste. ” image-2=”” count=”3″ html=”true” css_class=””]