3 ms·
>Can anyone explain what the point of a pegged cryptocurrency is? Because it has a completely stable value, from the standpoint of someone who always uses that
by mrlala 7y ago
>Can anyone explain what the point of a pegged cryptocurrency is?
Because it has a completely stable value, from the standpoint of someone who always uses that currency. Let's say it's pegged to USD. Boom, if I'm in the US and everything I do is in USD, this cryptocurrency can suddenly be the same as actual dollars from my standpoint. There's virtually no difference.
The USD has an almost completely stable value to the standard person in the US. Everything they do is in USD. They don't care about some fluctuations vs other currencies vs EUR etc. I'm not saying there are zero affects, of course there are, but there's really nothing they can do about it. EUR goes up 10% to the USD, ok something they buy which is imported from europe is maybe 10% more expensive in USD.. there is nothing they can do about that, so the USD is still completely stable from their perspective. It's not like most people are saying "Oh 1% of my purchases this year are coming from Europe, so I'm going to hold 1% of my assets in EUR to mitigate this affect".
>What exactly does the blockchain gain you here?
Given the above, that means that the crypto currency is now 100% the same as holding USD. I'm not holding cyrpto as a diversifier, or to get magically rich by a big crypto move. I would actually hold crypto TO USE IT.
Maybe I want to send my brother $50 who lives in a different place. Wouldn't it be cool to just send some crypto knowing that it's virtually exactly $50 when I send it and always after that? Open the phone on some app, click a button and boom. Without having to worry about any intermediary bank etc.
This whole notion that crypto SHOULD NOT be pegged is looking at some dystopian future where a currency like the USD is not stable anymore. And hey, I'm not saying that could never happen.. but the world will have pretty much exploded if that ever happens so I'm not sure your cryptocurrency will help much in that case.
Crypto right now is a get rich quick scheme with extremely little actual use cases. Pegging one to the USD would make it usable- which should be the whole point...