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Asked whether cryptocurrencies would end up replacing the fiat money we use today, Ethereum founder “Vitalik Buterin” said that he believes it is a possibility.
For almost a decade since the introduction of cryptocurrencies, the global finance community is slowly starting to accept that they are here to stay.
Step by step, more crypto coins are coming online with various diverse uses. Currently, the crypto industry averages $2trillion in market valuation. The market has become too big for anyone to ignore anymore.
Leading the pack is both Bitcoin and Ethereum. For a long time, these two have established market leadership. A status quo that is likely to continue into the foreseeable future.
Other than existing just as a transactional currency, Ethereum has positioned itself as a platform that offers a variety of blockchain solutions.
What I mean by this is that Ethereum has more relevance. This gives it longevity even if some of its products such as transactional currency ether face difficulties such as being outlawed.
Through the concept of smart contracts, Ethereum is attracting a lot of developers. Ethereum has become so successful that it is promising to create the next generation of the internet.
One of the uses for these smart contracts is the development of Stablecoins.
Let me refer to Stablecoins as the remedy to the huge volatility in the cryptocurrency market. The main challenge facing most crypto users and traders is the amount of volatility.
The huge price movements within a short period make it harder for planning and predictability. This is one of the major limitations why major merchants are yet to accept crypto for transactions.
However, Stablecoins are curing this challenge. They bring stability through maintaining stable pricing. This is achieved through pegging their value on other assets such as the dollar or gold.
The number of Stablecoins in the market is growing as their demand increases. The key advantage of Stablecoins is that they enjoy the benefits of decentralization and at the same time maintain stability.
Role of Ethereum in Stablecoins
Ethereum is one of the major platforms that facilitates the development of Stablecoins through a concept known as Dapps (Decentralized Applications). Examples of these Stablecoins include;
The growth of Stablecoins will act as a catalyst in pushing the price of Ethereum higher. Currently, some major financial institutions are developing their Stablecoins.
I believe it is just a matter of time before Stablecoins go mainstream and become part of the global financial system.
Advantages of Smart Contracts
There are several advantages you get through the use of smart contracts. Some of these include;
- Lack of Network downtime
Because cryptocurrencies are decentralized, the failure of one system does not affect the entire
network. You are still able to transact because the other systems on the network are still operational.
This assures 100% uptime. A feat that is hard to achieve on centralized platforms.
Decentralization brings about freedom and openness. The use of blockchains ensures all the transactions in the network are visible from the point of origin to the termination.
This is opposite to the traditional systems that are heavily controlled and opaque. Decentralization promotes freedom and ensures the transactions are highly secure.
Growth in the usage and development of Stablecoins will keep driving the price of Ethereum higher. We are still in the stages of cryptocurrencies adoption.
Hence this is an opportunity for you to invest. However, you need to ensure you do adequate market research because crypto markets are highly risky and you could end up losing your money.
If you can hold long enough, Ethereum could be the asset to make you a millionaire.