When folks think about crypto, Bitcoin is usually the first thing that pops into their heads. It's been around the longest, everyone knows it, and for many, it's the face of the whole industry.
But I've been mulling over something lately:
Even though Bitcoin grabs all the headlines, stablecoins are actually what a lot of people are using on a daily basis in various places.
So many are out here:
Stashing or sending cash with USDT/USDC, P2P trading using stablecoins, Remitting money through stablecoins, Steering clear of volatile assets altogether.
In some regions, folks have almost stopped using Bitcoin for everyday payments, opting for stablecoins instead.
So it begs the question:
Could stablecoins eventually take the lead over Bitcoin in real-world use?
Why are stablecoins gaining so much traction?
Mainly because of their stability. Most people aren't looking to dive deep into economic theories when they handle their cash. They just want something that retains its value in the short run, something they can count on, and something that’s easy to use. Bitcoin's ups and downs can complicate things at times. If someone gets paid today and then Bitcoin plunges 10% tomorrow, that’s a big deal especially in places already facing economic struggles. Stablecoins cut out that unpredictability. You can transfer value fast, trade smoothly, hold digital dollars, and steer clear of local currency issues without fretting over market fluctuations all the time. That practicality is a huge factor behind the rapid growth of stablecoins.
Well from what I know, most people or lets say the Average users would rather choose convenience and utility as you said because most average users dont even care about decentralization, theyve been so attached to this centralized system for so long they think anything outside of it is not safe!
Its very evident that this is what the future is saying, even some people using bitcoin..they prefer centralized exchanges because they think its easy to use and they also keep their bitcoins under the custody of these centralized institutions.
Thats just the reality..
Sure they wouldnt, were already in that situation because only a few people actually use bitcoin for everyday transactions nowadays most frequent transactions are done in stablecoins.
When most bitcoiners hear "stablecoin", they make the mistake to have their libertarian-ego triggered and completely overlook the importance of people getting used to stablecoins.
The reality is that people can't just overnight switch from the traditional financial system to Bitcoin. Stablecoins like Tether are the trojan horses for people to get used to concepts like "blockchain", "private keys" and "addresses" so they can feel confident to switch to bitcoin when the US dollar experiences hyperinflation.
Bitcoin does not compete with Tether to have its usage "eventually overshadowed". The utility of bitcoin comes from holding it for a long period, to protect your purchasing power through uncertain times. Tether is more useful as "electronic US dollar cash", not a store of value. Those two can coexist, until the US dollar hyperinflates.
The appeal stablecoins has brought to the cryptocurrency market as a better transactional utility is quite clear but that doesn't displace the fact that Bitcoin remains undisputed in value dominance as a financial asset or store of wealth.
I think why stablecoins has so much rep and in some ways has overshadowed Bitcoin because it is clearly digital versions of currencies like the USDT and USDC which is pegged to the dollar, which is a clear distinction from Bitcoin both on the Blockchain and as money for buying, selling and moving value faster.
People will definitely use stablecoin more than bitcoin because majority of bitcoin enthusiasts are holding their bitcoin for future gains because it's a store of valuable and preserves the value of your funds. Stablecoins don't appreciate in price because it's pegged to USD. I'm keeping my bitcoin for the future and I spend fiat or stablecoins. Bitcoin is an alternative payment method and I think, it has done well so far in terms of usage, since creation.
Bitcoin , and Stablecoin are complementary rather than direct rivals, and they serve essentially different functions. Furthermore, no cryptocurrency can rival BTC. Although many traditional banks are actively working to integrate stablecoin DeFi in order to modernize payments and compete with CEX, stablecoins may surpass BTC in terms of daily usage and transaction volume. However, stablecoins will never take the place of BTC as a store of value. In addition, I think stablecoin DeFi by traditional banks will pique the interest of those who are still having trouble understanding BTC.
If we look at the meaning of the term Store of Value, we may realized that Stablecoins can be a stronger/better store of value in a certain period of time. Bitcoin, due to its high volatility, is often considered a weaker store of value by many financial analysts, since Bitcoin's price highly fluctuates and cannot provide stability. Bitcoin does not preserve the value of the fund, if Bitcoin value is highly fluctuating.. it is not being preserved but rather being volatile... highly volatile.
Aside from decentralized network, the advantage Bitcoin has over stablecoins is security and possibly profit in the long run (depending on when the holder is cashing out).
that is correct.
also, the important aspect of stablecoins is that people outside of the US (and they are very popular in the emerging states for a number of reasons) can easily remember the exact exchange rate: i.e. it could be 10 to 1 or 20 to 1 or something like that.
if Bitcoin was the only crossborder currency, people would have to memorise rates like 1047964 to 1 or something. that's not convenient.
Yes and its quite obvious that tokenization in general will be a big thing.
Stablecoins are just tokenized treasuries, at least the Genius compliant ones are.
Many normies will be using stablecoins either directly or indirectly bc institutions will be using stables as a settlement layer. When a normie sends $10 to a friend via Venmo, Cashapp, or Zelle in the futurem, it will likely be a stablecoin with instant settlement. But the user may not know or care about the underlying mechanics or infrastructure
stablecoins have an important role in the broader financial system, such as a temporary or short term store of value while transmitting money overseas. BTC is obviously far superior as a store of value over time, but stablecoins are better for storing value in shorter terms when you dont want to deal with any volatility when sending money to family overseas, or for other reasons.
They also play a role in providing an off/on ramp for btc and other tokens
In any case, with the clarity act, if yield is truly banned, I think thats bearish for btc bc stablecoin adoption will lead to more liquidity into btc imo. While others might argue btcs store of value narrative is more attractive when stables pay no yield, I think the offsetting headwinds from reduced stables volume will hurt btc
Regardless of what happens with stables, and this is NFA obviously, it would be wise to have some exposure to smart contract networks like eth to capture some value from stables
Stablecoins will definitely be used by more people due to their usefulness for transactions, while bitcoin will be a place to store their monetary value and become an investment.
It's not strange to say that about Stable coins, but it doesn't mean that Bitcoin is inferior to stablecoins, you need to look at which side first in measuring it to open your eyes on which point is superior and on which point is weak to judge.
Unless you've been living under a rock, you should know that USDC and USDT have already eclipsed Bitcoin usage.
The fact that everyone is accepting payments in at least one of those coins make them attractive coins to hold.
People will definitely use stablecoin more than bitcoin because majority of bitcoin enthusiasts are holding their bitcoin for future gains because it's a store of valuable and preserves the value of your funds. Stablecoins don't appreciate in price because it's pegged to USD. I'm keeping my bitcoin for the future and I spend fiat or stablecoins.
Just like the name sounds, stable coin, and Bitcoin does not serve the same purpose, and people use them differently. The use of stable coin is growing rapidly, but Bitcoin still dominates. Firstly, stable coin came on board as a result of bitcoin, and other cryptocurrency existence. But today, people now store their money in stable coins to retain the value of their money, and avoid fluctuation, and depreciation of currency, but your money does not grow in value.
When it comes to investing, people talk about bitcoin, and not stable coin, bitcoin has the potential to grow in value over time, and earn investors more profit. Today, many individuals, countries, and institutions are adopting Bitcoin, and not stable coins. We have also seen stable coins depegged, but since the existence of Bitcoin, bitcoin has not failed, and this makes bitcoin a better option than stable coin.
Cryptocurrency scalability comes through stablecoins like USDC USDT etc, this os nothing different than making access and transactions on the blockchain easier convenient and fast, so in terms of usages stablecoins ar more attractive in the cryptocurrency market.
Bitcoin is an assets, and due to that, we cant find it so attractive for daily usage, like providing trading liquidity as stablecoins does, but have long term hedge against inflation which stablecoins suffer from along with the traditional financial system.
Stable coins are competing with the traditional system
They both share similar qualities and target market with it being tied to Fiat
Just more convenient.
Bitcoin and stable coins focus on different target market
Stablecoins still have the flaw of censorship and getting frozen like traditional
Unlike Bitcoin.
That is true. The use case is different for btc and stablecoin, hence, I don't think stablecoin will overshadow the existence of btc. I don't think btc users will just hold stablecoin longer. Because stablecoin has limited usage, just think of its volatility. The reason why it is not attractive as investment because its price is quite stable, hence, the name of stablecoin.
Whereas, when you talk about btc, the 'magic' is there because of its volatile price in the market. The promise of earning profit is there because of the large potential difference of the buying price vs your possible selling price. That's one aspect of btc. And when it comes to usage, I believe, more crypto users will trust btc because of its decentralized nature as compared to stablecoin, where some group of developers are behind their existence. Meaning, these stablecoin developers can really freeze your assets if they need to.
whats stablecoin? its just fiat applied onto crypto technology. yet bitcoin still remains to be the more popular one. stablecoins will definitely be used but i doubt it will overshadow bitcoin since bitcoin has more usages (investment, trading, etc)
Very different bro, it would be tough to use Bitcoin for day to day transactions like the stable coins and that's the angle where the stable coins has an upper hand. It's because Bitcoin is very totally therefore marketers can't keep changing the price of their good every now and then as it fluctuates but it doesnt mean the stable coins are better.
Bitcoin plays a perfect role as a store of value and hedge against inflation which is something the stable coins can't keep up with and also why Bitcoin is the best digital currency since it adds value to whatever that's put into it on the long run.
It's not correct.
Bitcoin is not the first, the oldest cryptocurrency.
Bitcoin prehistory.
You can try educate them about risk of stable coins but they can do whatever they like.
Stable coins are risky and such coins can be frozen even in your non custodial wallets. With stablecoins, non custodial wallets are not enough to secure your fund.
Most Stablecoins Can Be Frozen, Even in Your Own Wallets.
Bitcoin adopter's profile is different from stablecoin's adopter. They aren't competing for the same investors, so there are no chances stablecoins can overcome Bitcoin in anyways.
Stablecoins are useful, but still attached to fiat currencies, what means they lose price on long run, while BTC gets more expensive. And as we know, that is one of the reasons why investors hold Bitcoin instead of fiat currencies.