Which is the best cryptocurrency to use as a payment instrument?

Started by organictextiles, Jul 19, 2022, 04:51 AM

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organictextilesTopic starter

There is a lot of debate about what cryptocurrency is more suitable for using it as a payment instrument.
In your opinion, which cryptocurrency is best suited for these purposes? And why?
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Megan Brown

In terms of speed and commissions, Litecoin is still in a solid lead over BTC.
The total number of Lite coins is 4 times more than Bitcoins, and about several million bit coins have also been lost.
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Nicpoint45

More than 11 thousand cryptocurrencies are circulating in the world today, and most of them work on the basis of blockchain technology. In fact, it is a table with data wandering around the Internet, which is protected from hаcking and copying using cryptography (encryption) methods.
The blockchain turned out to be convenient for issuing virtual values, for example, coins or tokens, which users can exchange directly with each other. The exchange program automatically adds new transactions to the register and passes it on, without requiring the participation of intermediaries.

Cryptocurrencies quietly pass through borders and do not fall under the supervision of banks and regulators. But there is a problem — strong fluctuations in their rates. For example, bitcoin, which is traded absolutely freely and decentralized, can grow or fall by 30% against the dollar in a day.
Hence the idea of stablecoins. In terms of transfers, they have the same advantages as other cryptocurrencies: instantly, to anywhere in the world, without supervision. But at the same time they are tied to traditional money, most often to the dollar.

How stablecoins work
There are three basic mechanisms for linking cryptocurrencies to traditional money.
They differ in which asset is used as collateral when copying the course. Relatively speaking, they have a different degree of proximity to the real currency.

With cash collateral

In these stablecoins, each coin has a pledge in the form of a unit of traditional money. This is usually a dollar account in a trusted bank, where funds from the sale of virtual coins flow and where they come from when people change them back to dollars. A kind of digital gasket.
These are the most popular stablecoins, including Tether — the third coin in the world in terms of transaction volume after bitcoin (BTC) and ether (ETH).

Secured by other cryptocurrencies

These stablecoins do not have a guaranteed bank account, but they are not empty wrappers either. They are issued on the security of other coins, which are worth more in total than the coins of the second level. This allows them to keep a peg to the dollar without buying the dollar itself.
For example, Dai is secured by a two-fold ethereum (ETH) collateral and is calculated indirectly using such an algorithm that 1 Dai is always worth 1 dollar. In other words, even if the guarantor coin collapses by half, it will be possible to sell this collateral for dollars and return their money to investors.

Algorithmic stablecoins

This type of coins may not be provided with anything at all, except for a certain algorithm sewn into them, which allows you to automatically reduce and increase the total number of coins, adjusting the exchange rate to the selected monetary unit, usually the same dollar, less often the euro.
The most famous example is TerraUSD (traded on exchanges as UST). It is provided with a counterweight coin TerraLuna.
These two cryptocurrencies are constantly being issued and mutually destroyed according to such an algorithm that TerraLuna collects all fluctuations, and the calculated UST rate is equal to 1 dollar.
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