In the world of cryptocurrency, only one asset can maintain a relatively solid price: stablecoins.
There are many stablecoins, two of the most popular being Tether and USD Coin.
But what similarities do these assets share, how do they differ, and which is better overall?
Tether Image Credit: Satheesh Sankaran/FlickrUSD Coin Image Credit: Satheesh Sankaran/Flickr
Tether was initially called “RealCoin,” but adopted its current name in late 2014.
In early 2015, Tether (USDT) became available for trading.
USD Coin, on the other hand, wasn’t formed by a handful of individuals.
Tether and USD Coin are cryptocurrencies, so their price does fluctuate.
But unlike typical assets, these fluctuations are often very minimal.
When a stablecoin loses or gains too much, it is no longer stable and therefore loses its peg.
This can happen withall kinds of stablecoins.
USD Coin and Tether both offer higher transaction speeds than traditional currencies.
However, Tether and USD Coin offertwo drastically different block timesdepending on the kind of token you’re using.
Like Tether, you could consider USD Coin a digital dollar.
It represents the value of a US dollar but is not a fiat currency tied to traditional banks.
Tether vs. USD Coin: Collateral
Stablecoins are always a safer bet if they have collateral.
Collateral is a kind of backup that comes in the form of another asset.
It assures investors they won’t lose out if the asset they’ve bought collapses.
Tether is not backed by one kind of collateral.
USDT and XAUT are entirely different assets with different kinds of collateral.
Though Circle has also faced some criticism over transparency, it provides more transparency than many other big stablecoins.
This is a key reason why so many different wallets support them.
There’s no doubt that stablecoins are less exposed to volatility than regular cryptos likeBitcoin and Ethereum.
But this does not mean that stablecoin investments are a guaranteed win.
If the market crashes severely, stablecoins can lose their peg.
It should also be noted that both Tether and USD Coin are centralized assets.
Both assets are also centralized.
Because these two stablecoins share so many similarities, you may find both to be suitable for you.
