What are the disadvantages of tablconv? Expert's answer

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2018-09-13 21:00:05

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Professor of Economics, UC Berkeley Barry Eichengreen believes that tablconv has significant shortcomings. The expert criticized the three types of coins are tied to the Fiat. About it writes .

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Why Tether — not the best investment

According to Eichengreen, cryptocurrency fully backed by Fiat, will not be able to survive in the long term due to its high cost. The organization behind the project, you need to follow a rather large reserves of the dollar. It's not cheap, and questioned the scalability stablon.

The First example is fully backed by coin — Tether, which is pegged to the dollar at a ratio of 1:1. However, earlier news that the company issuing the coin does not have sufficient resources to ensure the Fiat of total cryptocurrencies in circulation.

Partially supported by the token — not the best alternative. Even if the company sustains 50 percent of the coins, the negativity in the market could lead to a massive drain of cryptocurrency. In the end, the Issuer will have to redeem their tokens back, but a limited supply of resources will sooner or later become the cause of the collapse of the project.

Unsupported stablecoins type are the worst tool for investors. No reserve Fiat Issuer maintains price stability by regulation of the release of tokens. In the end, this strategy will lead to the complete devaluation of the crypt.

Earlier, the brothers Winklevoss to launch my very own stablein, backed by the dollar. Billionaires are going to compete with the Tether and gain significant market share.

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