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We sincerely apologize for the inconvenience caused.
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EURK Team
With the rise of cryptocurrencies over the past decade, there has been a proliferation of different digital assets competing for users' attention and investment, and you may wonder, “How many cryptocurrencies are there?”.
Join us in this blog as we explore types of cryptocurrencies, the safest types, stablecoins, the problems they solve, and more in our guide. By the end of our blog, you will have a solid understanding of cryptocurrencies in general.
As of November 2023, there are over 11,000 cryptocurrencies listed on CoinMarketCap with a combined market capitalization of over $1.4 trillion. However, the vast majority of these cryptocurrencies see very little usage or crypto trading volume.
According to cryptocurrency data and research firm CoinGecko, over 9,000 of these cryptocurrencies have a market cap of under $1 million, indicating that they are not widely used or traded.
So while there may be thousands of cryptocurrencies, only a small portion make up the bulk of actual cryptocurrency usage and value. Let’s continue exploring why there are so many different cryptocurrencies on the market!
The large number of cryptocurrencies can partially be attributed to how easy it is to create new digital assets in the decentralized world of crypto. All it takes is some coding knowledge to launch a new blockchain network and associated cryptocurrency.
This low barrier to entry has led many amateur and professional developers alike to launch their own coins, either as intentional scams or experiments that simply didn't gain traction.
Beyond this, different cryptocurrencies also aim to solve unique problems or apply new innovations to areas like smart contracts, decentralized finance, etc.
For example, some cryptocurrencies have focused on improving scalability over blockchains, while others have targeted specialized use cases in industries like supply chain management or digital identity. The variety is a byproduct of the innovation happening across the crypto ecosystem.
There are four main categories that most cryptocurrencies fall into based on their characteristics and intended uses.
Crypto coins that are designed primarily for making payments due to their fast transaction times and wide merchant acceptance, like restaurants, retailers, and service providers.
Utility tokens, which are built for a specific purpose or use case beyond just payments, like file storage, cloud services, or gaming items, have value that comes from the actual usage of a project or platform.
Security tokens are digital assets that represent real-world value, like ownership in private companies, real estate, art, or other traditional investments. They are essentially cryptocurrency representations of securities. You can check “RWA tokenization” and “real estate tokenization” for more details.
Stablecoins are cryptocurrencies that aim to avoid volatility by pegging their value to external assets like fiat currencies, commodities, or baskets of assets. The role of stablecoin is to provide price stability, which makes it useful for crypto payments, crypto exchanges, savings, and more.
Stablecoins that are well-collateralized and properly audited, like EURK, provide the lowest volatility and the highest comparable safety to fiat currencies in the digital asset space.
For stability-oriented use cases, they are generally the best cryptocurrency choice. Stablecoins are often considered the safest cryptocurrency due to their price peg targeting minimal fluctuation. Let's explore stablecoins in more depth.
The power of stablecoins comes from their effort to maintain a constant value by typically being 1:1 backed by reserved assets. This reduces the risks associated with the heavy volatility seen in cryptocurrencies.
EURK is a securely audited euro stablecoin that has reserves in Switzerland and the Dominican Republic, making it a very secure option. EURK stands out as a more reliable stablecoin option.
As a secure, audited, and 1:1 euro-based stablecoin built on multiple blockchains, it empowers innovation with reliability and efficiency. EURK is also available on ERC20 and is listed on the Coinstore exchange.
Additionally, EURK offers transparent transactions that are fast and secure, giving users peace of mind. Cryptobunq, a secure one-stop-shop crypto service provider, issues and audits EURK securely.
There are several key reasons why crypto traders favor stablecoins in their crypto trading strategies.
By holding funds in stablecoins like EURK rather than highly volatile assets, traders do not have to worry about the value of their capital rapidly changing, which could liquidate positions.
Stablecoins allow traders to preserve the fiat value of their capital without resorting to cash. This enables them to keep trading and spot opportunities even if they want to avoid crypto volatility for a period of time.
Stablecoins can be transferred nearly instantly between crypto exchanges to capitalize on arbitrage opportunities or open positions somewhere with better prices. This flexibility aids in active trading.
Some centralized stablecoins offer interest rates for holding balances, allowing capital to still generate a return even if not actively placed in the markets.
Major exchanges generally offer far more trading pairs with stablecoins like EURK than they do against fiat currencies. This expands traders' options.
Stablecoins grease the wheels of active crypto trading by solving common pain points around volatility, stablecoin liquidity, and capital lockups. They are a must-have tool for professional digital asset traders.
Beyond just trading applications, stablecoins are beginning to see broader usage for their price stability attributes.
Stablecoins offer a cryptocurrency alternative for cross-border payments or e-commerce payments without currency conversion fees. Some services already accept stablecoin payments.
With interest accounts available through centralized stablecoin issuers and decentralized finance (DeFi) protocols, holding stablecoins is an alternative way to generate yield without taking on crypto volatility.
An increasing number of online and physical retailers now accept crypto payments, with stablecoins being the most practical choice due to a lack of volatility concerns.
Stablecoins allow cryptocurrency investors to protect gains by easily moving funds out of volatile coins during market downturns in a way that is frictionless compared to fiat wires or exchanges.
Some companies now offer the option for employees and contractors to receive salaries or invoices in stable digital dollars for convenience and ease of international transfers with crypto batch payments.
So in many ways, stablecoins expand the potential utility of cryptocurrencies to new everyday use cases by removing the instability that prevents mainstream adoption. This makes them very valuable for both traders and regular users alike.
Stablecoins emerged to solve key problems with both traditional fiat money systems and standard, highly volatile cryptocurrencies.
International fiat wire transfer fees can be exorbitant, and domestic wire times are not always same-day. Stablecoins enable near-free and near-instant global payments.
Sending funds across borders often requires paying conversion exchange fees multiple times. Stablecoins stay in the same currency unit, regardless of destination.
Cryptocurrency exchange liquidity is often concentrated on major stablecoin trading pairs over local fiat currencies due to their wider 24/7 availability.
Traditional banks may block or limit access to certain countries, businesses, or personal activities. No single entity controls stablecoin ledgers.
Fiat bills, coins, and written records can all theoretically be counterfeited or duplicated. Crypto transactions are permanently recorded on distributed ledgers to mitigate double spends.
So in many ways, stablecoins solve the cross-border value transfer problems of both government-controlled fiat currencies and volatility-afflicted cryptocurrencies by combining the benefits of crypto and stability.
This makes them a valuable innovation. You can check “stablecoins vs. fiat currencies” for a more detailed comparison and to understand the benefits of stablecoins.
With the rapid growth and increasing adoption of stablecoins, the question of trust becomes extremely important. After all, stablecoins derive their value proposition from maintaining pegged cryptocurrency exchange rates, so faith in this mechanism is critical.
More centralized stablecoins face direct risks to their ability to maintain pegs if issuer solvency becomes suspect. Tether famously faced past allegations of holding insufficient dollar reserves, for example.
Decentralized stablecoins rely more on algorithmic supply adjustments or collateral substitutability, which add technical complexity and risks.
However, fully transparent audits of cash reserves by trusted accounting firms build trust over time. Cryptobunq securely issues and audits EURK, providing transparency for stablecoins that gives users confidence in their dependability.
In decentralized stablecoin projects, over-collateralization, diversified collateral baskets, and emergency shut-off circuits give more assurance that pegs can withstand stressed market conditions compared to failed projects of the past. Continued innovation is also strengthening stability mechanisms.
Transparency in project mechanisms and balance sheet audits gives users the necessary information to make their own determination if a given stablecoin is sufficiently trustworthy for a given financial purpose.
For crypto traders and users seeking minimal volatility for crypto investments, trusted stablecoins provide a practical and suitable alternative within crypto, such as EURK.
For risk-averse investors, holding and trading stablecoins as a store of value provides noteworthy advantages over keeping funds as fiat or in traditional savings accounts.
With interest rates globally at historic lows, stablecoins offer higher yields through decentralized lending protocols without taking on the volatility risks of speculative crypto investments.
Additionally, the use cases and overall market potential of stablecoins remain significantly under-penetrated, with mainstream adoption still in its early stages and expected to surge over the next five years.
Technologies like stablecoins and cryptocurrencies are reshaping global finance for the better and empowering previously unbanked populations with access to new financial instruments and services that can improve material conditions.
For forward-looking portfolios, moderate stablecoin exposure maintains crypto upside while avoiding sharp drawdowns seen with highly volatile coins. You can check “Invest in stablecoin” to learn more.
Stablecoins like EURK demonstrate clear benefits worth considering for both everyday users and long-term investors. They have the potential to spur global waves of financial inclusion and transform lives through open access to digital money.
Those recognizing stablecoins' long runway for growth see the utility and investment case they offer as very worthwhile. Through stablecoins like EURK, people globally now have access to an entirely new monetary paradigm of money matched to the digital age.
Stable yet borderless digital cash empowers billions with powerful tools for value transfer and wealth preservation. As adoption races ahead and regulatory frameworks mature in the coming years, especially euro stablecoins are poised to emerge as the dominant currency of the digital economy worldwide.
Those engaging with projects and transparently establishing trust through trusted reserves will find stablecoins highly practical and rewarding members of the financial system of the future. With stablecoins, digital currencies have become safe and viable for all.
If you want to adapt to the world of stablecoins, you can trust EURK. As a reliable stablecoin with multiple reserves, EURK provides fast, secure, and easy payment, trading, and more options for investors. Become a partner and buy EURK today!
