Out of all the coins we have on the crypto market, they are all classified as stable or unstable coins and those different categories serves different purposes. Let us look at those different purposes and see the benefits of each.
What are stable coins?
These are coins which were created and pegged against different assets, it could be another crypto backed, fiat money backed, commodity backed or collateral backed and they try by all means to maintain their value for life e.g $1. Another examples of stable coins are: USD coin, PAX, DAI, Gemini dollar, True USD and others. The coins in circulation has to be equivalent in value with the pegging asset. Their coin supply
What are non stable coin?
These are coins which were just created and are not backed by anything and their price and value can change anytime it either goes up or down and it is an advantage to daily traders. Examples of these are Bitcoin, Ethereum, Lite coin or XRP, and these types of coins are subject to a lot of pumping and dumping.
Advantages of Stable coins.
- Not volatile and their value is maintained
- They are very stable since they are tied to real assets
- They can be used as a medium of exchange without any fears
Disadvantages
- They are centralized.
- They are vulnerable to interference with the state.
- If stable coins are banned people will lose money.
Advantages of Unstable coins.
- Decentralized.
- They are profitable and you can make money when it goes up and down.
- Its a lifetime investment.
Disadvantages
- You can loose the value of it when it fall big like what happened with bitcoin in 2017.
- Its vulnerable to manipulation by the large institutions
As we all know you have to be ready to take risks if you want to become rich, so since unstable coins are associated with volatile markets this is the right type of coin you should be looking to play around with as it is pumped and dumped daily on the crypto exchanges.
If you are that type which safeguard its money and not ready to loose a dime and you just want freedom and access to you money anytime then stable coins are the type of coins you should be dealing with.
