Bitcoin Forum

What it means that a stablecoin is Algorithmic?

Does it mean that it has to be centralized to begin with to be remotely programmed by a employee at the centralized office that programs it with new algorithms? This is called programmable money right?

For example if a centralized entity programs their algorithmic stablecoin to ban purchase of bitcoin with it hence when the holder of this algorithmic coin tries to buy btc with it then the holder will automatically get not allowed red error message on screen?

Is it possible to have decentralized algorithmic stablecoins?

Will algorithmic stablecoins take over normal stablecoins like USDT, USDC, BUSD, DAi and if so why?


Can we say CBDC's Central Bank Digital Currencies is similar to Algorithmic stablecoins because it is programmable money unlike cash or e-cash such as paypal for example where they cant program the cash with algorithmic rules, such as for example a algorithm that restricts the user to buy stuff at certain times of the day for example program the money to automatically ban buying beer from a store late at night to avoid drunk driving or whatever?

So basically with programmable money the user is not in control of the money they earnt but the issuer is?

I've never heard the term before but I assume it's a new name for (or a subset of) what was once called decentralized Stablecoins?

Here's an overview of decentralized Stablecoins and a short summary of how they work. Maybe that's what you're looking for:
https://bitcointalk.org/index.php?topic=3421190.0

It's an oldish thread though (in crypto timeframes) so it probably won't include the new hottest shit.




Assuming we are talking about decentralized Stablecoins: No.




That would go against every fiber and principle of crypto.

They are non collateral stablecoins, they are not backed by anything, an example is Ampleforth (AMPL). Such stables coins only depend on circulatory algorithm in which more of the coins are issued when price increase, and if the price of the coin is decreasing, some are taken off the market in a way their prices are somewhat stable at a particular price.

Yes, like the Ampleforth.

No, CBDC are collateralized with fiat, they are fiat backed stable coin while algorithmic stable coins are not backed by anything.