Q1: Many say that 2020 will be the year of stablecoins. Will you agree, and why?
A1: I wouldn’t argue this statement! Stablecoins have long been an idea and ‘on paper’ since 2012.(see Mastercoin for reference) Bitcoin’s white paper was produced 11 years ago, launched quickly after, and made global headlines the last five year; I personally feel it’s quite obvious banks and major corporations realize they’re going to get “left behind” if they don’t evolve with new technologies and employ new financial solutions to society’s wants and needs. Many of the Stablecoins on the market and being produced tackle issues we’ve been trying to solve for decades or longer. There’s many we can claim will actually better the world in different aspects.
Koosha adds “With a rush of new projects planning on launching or having already launched stablecoins, it is fair to say that the blockchain industry will see a lot more adoption and access to a wide variety of stablecoins. For this reason, one can assume that this asset-class will thrive or scale much quicker in 2020 than it had when altcoins were receiving much of the industry hype and scrutiny.”
Q2: In your book ‘Complete Guide to Stablecoins’, you provide 9 key factors to evaluate stablecoins. Can you take one or two major stablecoins and conduct this analysis to see how it functions?
A2: Were there 9?! Geez, you’d think I was a research scientist in another life, or something. (Hehe). It would be my pleasure.
Let’s pick on Anthem Gold! This is a metal-backed Stablecoin. (Source)
– After several Stablecoin projects hit headlines for lacking honesty, Anthem Gold became a trusted source for it’s users by implementing live streaming cameras on their gold vault. You can view their vault anytime on their website. They use bringing much needed transparency to the world of digital currencies and gold storage/trade.
– Gold, a highly sought after investment is the basis of this project.
3. Fallback methods.
– Anthem Gold is a unique project because the owners have over 50 years of experience in gold industry. James Ulysses Blanchard III is a major name in the investment world, with a resume that’ll impress nearly anyone on the planet. This in itself is assurance for users.
James son, Anthem Blanchard is ensuring his father’s legacy and the solid education that was gifted to him lives on by ensuing endless ‘fallback’ protocols. You want ‘out’ fast? For 3% your gold will be evaluated, weighed, and shipped directly to you; being photographed and videoed the ENTIRE process. I’ve not been able to get that stability leaving my precious children with people- but Anthem is going to ensure my gold is safe…
Maybe I should Koosha in his vault to make sure he’s being good…. (hehe)
– In the world of “money”, some will say “Gold is king.” and many feel it will always be a ‘go to’ for wise investing.
An article last month on Market Watch highlighted a quote by Bryon Wein. “Watch gold in 2020. It has a chance to be an interesting investment.’ According to the article, “Gold has gained 17.3% so far this year, based on the most active contract, according to FactSet data. That is a relatively healthy run-up for the metal considering that stocks, which tend to move in the opposite direction of gold, have been trading near all-time highs.”
Obviously, that will deluge to the success of Anthem Gold.
– As previously mentioned Anthem Gold runs a vault with live streaming cameras and employs staff for extremely incredible transparency measures. Many have stated this project is “well maintained”.
– Anthem Gold is pegged and backed by gold.
– Users can instantly trade their AGLD token to BTC, ETH, fiat, or as previously mentioned; for 3% the tangible gold will be shipped directly and safely to buyers.
8. Stability methods.
– I feel as if this has been covered with mention of the live cameras, trusted names behind the project, and of course, we must add the implications of using blockchain technology here.
– Anthem Gold seems to strive for transparency in so many different ways. With everything I’ve already discussed, they have an active chat room on telegram and Anthem Blanchard himself, despite being very busy, makes himself available to his community, users, fans and friends. I “pick” on them, because I have yet to find anything ‘fishy’ behind their project, which is desperately needed in the world of crypto.
Q3: So, which of the major stablecoins do you find most promising, and why?
A3: Writing an unbiased guide and when I do interviews, I really try not to give my personal opinion on other’s work. Obviously, I’m not perfect and sometimes this leaks over in my writing. I’ve been in this business in some form over 5 years and I get excited about the new technologies, regulations and advances within this industry.
The Stablecoins I find the most value in, are the ones that solve consumer concerns and bring convenience to users. As an NGO owner and director, I tend to have my ‘head in the clouds’ and focus very heavily on reducing the ecological footprint on the planet, which many metal- collatorgorized Stablecoins can successfully accomplish.”
Koosha adds “I see a lot of promise and innovation in MakerDAO as it is arguably the most well adopted crypto-collateralized stablecoin on the market. Backed by Ethereum, it remains stable without the need of traditional fiat backing present in more well-known projects like Tether or TrueUSD.”
Q4: I bought and read your book. You possess a rare skill to explain complicated stuff in a way everybody seems to understand. Can you explain in the same way one can make money on stablecoins?
A4: Thank you so much, that’s so kind of you! Koosha told me to request reviews with purchase! You better do what he says, I can’t disappoint my boss! (wink)
People often over complicate things, for no reason. Not simplifying these complex adventures, doesn’t help with adoption of the amazing technologies we are creating. Making things easy to understand for everyone was my desire and goal with this text!
If you read the short but ‘heavy’ book, you’re now an expert on making a little money using stablecoins!
I touch base on ‘hedging’ and ‘harvesting’ in the text. Both termed by financial experts as complex concepts; but, I guess they never thought to use graphs or pictures. hehe We’ve provided a breakdown and a couple visuals to help gain an understanding of these processes. You can view them “How to use Stablecoins to your advantage” section.
Q5: I consult a team behind an algorithmic stablecoin. I try to convince them that their stablecoin has to have real life functions. Do you agree that it is the decisive factor in a value of a stablecoin?
A5: Koosha answers this question well… “Like any promising currency, stablecoins must focus or prioritize some effort in developing use cases or functionality to drive volume. The industry has already experienced projects that failed to exhibit any practical utility. Over time, the market awards projects that balance innovation, utility, and adoptability among crypto veterans and newcomers.”
Q6: Which market niches are still available for functions stablecoins provide?
A6: There’s projects being produced (and some already launched) that will challenge or improve many areas of commerce. There’s also many that can and have hurt the digital currency industry. In April of 2019, Tether’s lawyer announced it’s Stablecoin was only backed by fiat at 74%…
Obviously, that’s not how Stablecoins work. It’s meant to be a 1:1 backing or pegging- There were many users, and news of this made a lot of us in the Stablecoin industry ‘tired’, to say the least.
Dishonesty, lack of transparency, and news that your digital currency may not be fully backed or pegged by the tangible asset, as it’s promised to be; leaves many not only upset, but suspicious of great technology with wonderful case uses.
Take the Metal Collateralized tokens for instance… How expensive is it to transfer gold/diamonds/coal?
Well, gold is shipped by weight, so transferring ownership of large amounts of gold digitally, but not physically moving it from a valut, actually reduces the ecological footprint on the planet and has the potential to save costs to the buyer/seller.
If companies note several successful Stablecoins, I see this being done with costly art, antique cars, land, and more!
I’m also excited to see more on algorithmic Stablecoins- but I’m a nerd and I see a potential within the medical and legal industries for these Stablecoins.
Koosha adds “Outside more traditional applications of Stablecoins, GIVE Nation is a project introducing a new approach to education through Stablecoin incentivization. Kids across their mobile app will be awarded Stablecoins for learning, saving, and donating in-app cryptocurrency. Through this incentive model, GIVE aims to inspire children to become philanthropists and develop financial literacy skills.”
Q7: What is your attitude to corporate stablecoins, such as Libra? Do you think Libra will go ahead as planned? Many say, it will but with limited functionality to comply with new regulations, hastily adopted. What will be allowed then?
A7: Gosh, Facebook and I have a long history- I’ve been “around” since ‘FaceMash’ in 2003 (#IRCnerds annnnnd that’s all I’m going to say about that. lol)
I’ve actually written several articles on Libra and JP Morgan Coin.
There’s a lot of excitement, concern and ideas behind corporate launched Stablecoins. An honest, transparent, and well intentioned corporate Stablecoin can potentially rewrite economics for the better. With that, a Stablecoin launched by a company without those qualities can hold back the advancements in digital currencies.
As regulators meet and discuss these topics, we all need to move forward thinking about what’s best for the users and ensure we are bringing forth value in every way possible- I have yet to see a great model from a big tech company that I can fully agree with, but I like the fact that these ideas are gaining attention because it’s making people challenge the existing and failing economic structure we have in place today.
Q8: Many central banks are about to launch digital stablecoins pegged to their national currencies. How will it affect our everyday lives?
A8: For many, there will be no immediate effect of banks launching their native Stablecoins. There is still much room for blockchain education to introduce average spenders and savers to the benefits of decentralized money.
In addition, a plethora of independent projects have already launched fiat-collateralized coins. Notable banking brands may find more success in their stable coin endeavors due to the trust and years behind their establishment. If these big players can capitalize on their branding and educate customers well, there could be a large spark in stablecoin volume and accessibility.
The greatest variables in mass-adoption are arguably education and access. Central banks can leverage their experience and trust to properly drive both variables upward.
Q9: What lessons, in your opinion, the industry of stablecoins may learn from its development until now?
A9: Based on the interest of large banking institutions and corporations to launch Stablecoins, it is important for people in the financial technology industry to recognize the demand for this kind of technology.
Q10: How do you see the future development of stablecoins in the near future (1-3 years), mid term (3-5 years), and long term (5+ years)?
A10: That’s an exciting question. The last 11 years [we] “Bitcoiners”, have frequently been answering the same questions over and over…
One being “Why use BTC? It’s not backed by anything.” Some have argued BTC is just “made out of nothing” claiming fiat is backed by something. It’s not. Fiat money is a government-issued economy that was backed by gold (and silver, at times) until 1971. Fiat gives central banks control because they’ve printed endless amounts. This has caused hyperinflation; 2482.4% as of January 2020, to be exact. Where as, bitcoin has been inflated 1.8% since existence. Before you say-
Well, the US dollar is 116 years old!”…. Note; USD after 11 years sat at nearly 73%!
Crypto is controlled by the users, every day consumers, people like me and you- people that aren’t trying to control the economic state of the world.
Fiat even comes from Latin meaning ‘let it be done’… in my mind, that means ‘you don’t get a choice, you have to do what WE say.’ I don’t like to be told what to do and I like to challenge the standards that aren’t ‘for the people’.
For these reasons, in the short term, I feel we are going to be ‘shut down’ as much as possible. Why would the government and the wealthiest entities give up their comfortable lifestyles? I wouldn’t want to.
In 3-5 years, regulatory components will become clear on cryptocurrencies, better education will be out there and after 5 or more years- we’ll really start to see cryptos used everywhere. JP Morgan is one of the three largest banks in America- I wrote an article on how their fiat backed Stablecoin was being used by some of their bankers. With companies like this developing solid case uses, I don’t see how crypto is going away.
Bitcoin maximalists shun the idea of Stablecoins- rightfully so, they have a desire for a decentralized economic system. But, I think that’s the wrong way to look at Stablecoins- I honestly never liked the idea of a fiat collateralized coin- what’s the point?
Most people see this digital asset as a ‘debit card- lol and there’s nothing wrong with that this!!!! Think about it….
If we can slowly educate the average consumer by using Stablecoins it will be an effortless conversation to ease the idea of a decentralized economy- “Pitching” BTC/ETH/LTC and others for a better tomorrow, makes us actually sound like we get a cut… (lol, wouldn’t that be nice!?)
I see Stablecoins as a gateway to what we’ve all been working so hard for the last 10 years. I truly feel, and have always said; they are the avenue we need to integrate the Federal Reserve, Private banks, Big Corporations and the “1%”.
The best way to get what you want, is meeting people where they are, listening, then providing them a solution for their needs. Why would a 40 year old that’s had much success working at a Fortune 500 company need Bitcoin? If s/he makes 2M a year, has a 500M home, 2.5 kids and donates 20% effortlessly with no needs- what does the idea of a new economy do for them? They see it as a way to end their dog and trophy wife’s spa weekly spa days…
Stablecoins allow the amazing tech we’re creating, as well as the facade of stability society is so comfortable with.