What is a Stablecoin?
A stablecoin is a type of digital currency that is designed to maintain a stable value, often pegged to a fiat currency like the US dollar. Stablecoins are seen as a safe haven for investors looking to avoid the volatility of other digital currencies. Stablecoins are also seen as a bridge between fiat currencies and digital currencies, allowing for faster and more seamless transfers of value between the two.
There are several types of stable coins, each with its own advantages and disadvantages. The most common type of stable coin is a fiat-backed stable coin. This type of stable coin is backed by a reserve of fiat currency (such as USD), ensuring that the value remains stable. Other types of stable coins include crypto-backed stable coins, which are backed by a reserve of digital currencies, and algorithmic stable coins, which are backed by a complex algorithm.
Debating BUSD vs USDT – What is the Best Stablecoin?
The two most popular stable coins today are BUSD and USDT. Both are fiat-backed stable coins, meaning that their value is pegged to the US dollar. BUSD is a stable coin issued by Paxos and branded by Binance, one of the largest and most popular cryptocurrency exchanges. USDT, on the other hand, is a stable coin issued by Tether, one of the oldest and most established stable coins.
Let’s take a closer look at both of these stable coins to determine which is the best.
Pros and Cons of BUSD
BUSD is one of the newest and most popular stable coins today. One of the main advantages of BUSD is that it is under the Binance brand, meaning that it is easy to buy, sell, and trade BUSD, making it a convenient and safe option for investors.
Another advantage of BUSD is that it is highly liquid, meaning that it is easy to convert into cash or other digital currencies. This makes it ideal for traders who want to quickly convert their holdings into cash or other digital currencies.
On the other hand, BUSD does have some drawbacks. One of the main drawbacks is that BUSD has the eyes of the US authorities on it, as they look to regulate a dollar-pegged token under the control of a Chinese-founded exchange.
Pros and Cons of USDT
USDT is one of the oldest and most established stable coins today. One of the main advantages of USDT is that it is market proven for several years already, making it highly trusted by investors.
Another advantage of USDT is that it is available on all exchanges, making it accessible to users in almost every country. Additionally, USDT is highly liquid, meaning that it is easy to convert into cash or other digital currencies.
On the other hand, USDT does have some drawbacks. One of the main drawbacks is that USDT is not backed 100% by a reserve of fiat currency, meaning that any kind of bank run could cause liquidity issues.
BUSD or USDT As Payment
With many new projects coming out using blockchain, with ICOs for tokens, you may be wondering which stable coin would be the best to use for these ICOs.
Avorak AI, a new machine-learning project that leverages the power of blockchain for innovative payment systems to access their AI products, accepts both BUSD and USDT. In real terms, using either of these stable coins to participate in the ICO would be suitable, however using BUSD on BNB Smart Chain would likely incur lower gas cost than using USDT on Ethereum.
The ICO of Avorak is set in phases and the price increases gradually, so ensuring your transaction reaches in time is important. There is negligible time difference between USDT or BUSD, so again, either would be suitable as a payment method.
In conclusion, the best option for each person would be the most liquid stable coin available on their exchange of choice.
Want to learn more about Avorak AI?
Website: https://avorak.ai
Whitepaper: https://avorak-labs-and-technology.gitbook.io/avorak-a.i-technical-whitepaper/
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