Fiat VS. Crypto, which is a more stable currency?

[GabrielleGGG]

If a stable coin does not have an 1:1 all-cash reserve, do you think this means it fails to keep its value on par with USD?

As the media questions whether Tether has enough USD reserve to support its value in the recent USDT/Bitfinex drama, I found a data analysis of fiat currencies pegged to USD and comparison to stable coins.

https://medium.com/sophonexchange/stable-currencies-fiat-vs-crypto-a2ab0a50e903?source=friends_link&sk=f34d3104f7c3ca7bbe91ae508f556e56

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[squatz1]

Fiat. (Not saying I like Fiat more)

Even the Crypto stable coins aren't stable, look at something like Dai, Tether, etc -- which has been fluctuating between a couple of percent of their peg for some time. I think that if the USD falls, Bitcoin is going to have to go with it -- because at that point we're going through some sort of insane crisis that may take a LONG time to recover from.

[mersal]

The price of fiat might looks stable but it is not and it never will be.

The price of fiat just keep decreasing year by year due to inflation but the value of crypto changes in the pattern of change in demand for that coin.

[marcotheminer]

This'll be a big topic of debate. Recently I saw a video from Tim Draper saying virtual currencies are not the volatile assets - fiat is. It is because of geopolitical decisions/events, turmoil in certain countries, etc, that the price jumps. Although to me it's just the nature of the market (and how easily manipulated it is) with its 'base' being the EUR or USD.

[Juggy777]

If a stable coin does not have an 1:1 all-cash reserve, do you think this means it fails to keep its value on par with USD?

As the media questions whether Tether has enough USD reserve to support its value in the recent USDT/Bitfinex drama, I found a data analysis of fiat currencies pegged to USD and comparison to stable coins.

https://medium.com/sophonexchange/stable-currencies-fiat-vs-crypto-a2ab0a50e903?source=friends_link&sk=f34d3104f7c3ca7bbe91ae508f556e56

This is what I call a tricky question and each one here will have a different opinion on this, it’ll be interesting to see if we all can find a consensus on this op add a poll for this. In my opinion both are not stable, and one should allocate funds to both though I’ll suggest to hodl more of crypto’s than fiat for the risk takers.

[ene1980]

If a stable coin does not have an 1:1 all-cash reserve, do you think this means it fails to keep its value on par with USD?

As the media questions whether Tether has enough USD reserve to support its value in the recent USDT/Bitfinex drama, I found a data analysis of fiat currencies pegged to USD and comparison to stable coins.

It is a really good analysis and we all know that Tether is not transparent with their finances and they will fall when their lies fall apart, Tether always claimed that they had 1:1 US dollar cash reserve even when they printed billions during 2017 and there were many threads here questioning their reserve claim and now they revealed that they allow other assets too as reserve, not sure about the rest of the stable coins. If there is any stable coin that have transparent audit data, i will convert my coin in them and not in Tether.

[uneng]

The right thing would be that the correlation between fiat and a stablecoin were equally stable. If the stablecoin is more volatile than fiat, it means the stablecoin doesn't fulfil its objective. Tether has already failed, as it was discovered it wasn't backed by a 1:1 proportion, but a 0,74:1 proportion.
But there are other stablecoins that can still work, although I think it's not necessary to have many of them. We just need one of them working properly.

[kooboat]

Volatility is one significant association with the world of cryptocurrency. This is evident even with the stable coins like tether. In reality, cash is more stable than crypto and  I don't think anybody who has experienced both worlds, would argue about this.

[mersal]

Volatility is one significant association with the world of cryptocurrency. This is evident even with the stable coins like tether. In reality, cash is more stable than crypto and  I don't think anybody who has experienced both worlds, would argue about this.

Most of the people don't know that fiat even don't have stable value so they might argue that crypto is not stable and fiat is more stable.

[X-ray]

Volatility is one significant association with the world of cryptocurrency. This is evident even with the stable coins like tether. In reality, cash is more stable than crypto and  I don't think anybody who has experienced both worlds, would argue about this.

Most of the people don't know that fiat even don't have stable value so they might argue that crypto is not stable and fiat is more stable.

But when we try to see from the technical view and i have no reason to call fiat as something that can be valued. It's caused by the fiat created by the government and we will be back again to the fiat definition when

Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver

https://www.investopedia.com/terms/f/fiatmoney.asp


Where the government can make it stable? based on the demand and supply? crypto is even doing it.

[mersal]

Volatility is one significant association with the world of cryptocurrency. This is evident even with the stable coins like tether. In reality, cash is more stable than crypto and  I don't think anybody who has experienced both worlds, would argue about this.

Most of the people don't know that fiat even don't have stable value so they might argue that crypto is not stable and fiat is more stable.

But when we try to see from the technical view and i have no reason to call fiat as something that can be valued. It's caused by the fiat created by the government and we will be back again to the fiat definition when

Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver

https://www.investopedia.com/terms/f/fiatmoney.asp


Where the government can make it stable? based on the demand and supply? crypto is even doing it.

But governments are printing more and more money every year which makes the demand less as well as the value so why we need to trust something not backed up anything and also losing the value year by year.

[Naida_BR]

If a stable coin does not have an 1:1 all-cash reserve, do you think this means it fails to keep its value on par with USD?

As the media questions whether Tether has enough USD reserve to support its value in the recent USDT/Bitfinex drama, I found a data analysis of fiat currencies pegged to USD and comparison to stable coins.

https://medium.com/sophonexchange/stable-currencies-fiat-vs-crypto-a2ab0a50e903?source=friends_link&sk=f34d3104f7c3ca7bbe91ae508f556e56

1:1 reserved with what? With USD?
Fiat is stable but it would not be for so long. Its value has an amazing volatility especially when economic events happen and in most of the cases this events are bad and not positive ones.

[mayo2u]

If a stable coin does not have an 1:1 all-cash reserve, do you think this means it fails to keep its value on par with USD?

As the media questions whether Tether has enough USD reserve to support its value in the recent USDT/Bitfinex drama, I found a data analysis of fiat currencies pegged to USD and comparison to stable coins.

https://medium.com/sophonexchange/stable-currencies-fiat-vs-crypto-a2ab0a50e903?source=friends_link&sk=f34d3104f7c3ca7bbe91ae508f556e56

Define stable? In the short term meaning days, weeks and months of course all major fiat currencies are more stable. What crypto is doing is providing an alternative means of sending, spending and storing value. Crypto can only work well provided that there are stable societies that permit it politically: meaning that miners and users of crypto are not hunted down as enemies of the state and secondly that there is a stable electric and internet grid.

Come anarchy, come the zombie apocalypse neither fiat nor crypto would have value. In fact fiat would have a LOT more value. It could, once again be considered a means of exchange as it would be relatively scarce and could no longer be recreated. Not to mention, that at worse, it could be used in fires. Crypto? Without electricity and the internet crypto doesn't exist.

[Spendulus]

In the short term meaning days, weeks and months of course all major fiat currencies are more stable. What crypto is doing is providing an alternative means of sending, spending and storing value. Crypto can only work well provided that there are stable societies that permit it politically: meaning that miners and users of crypto are not hunted down as enemies of the state and secondly that there is a stable electric and internet grid.

Come anarchy, come the zombie apocalypse neither fiat nor crypto would have value. In fact fiat would have a LOT more value. It could, once again be considered a means of exchange as it would be relatively scarce and could no longer be recreated. Not to mention, that at worse, it could be used in fires. Crypto? Without electricity and the internet crypto doesn't exist.

Your analysis of fiat conflates Cash with all fiat; and may actually be backwards.

Without electricity, Crypto safely resides in various blockchains and wallets. Fiat, the largest fraction of which resides in electronic ledgers, may be forever lost.

Neither crypto, or fiat, is dependent on the Internet. The messages by which transactions are sent to miners are not Internet based. And for Fiat, pretty much the same is true.

[ck343]

Even the Crypto stable coins aren't stable, look at something like Dai, Tether, etc -- which has been fluctuating between a couple of percent of their peg for some time.

The stability of Stablecoins doesn't mean flat stability.
Gold-backed Stablecoins will fluctuate according with the fluctuation of the gold price.
They are stable in that their volatility is manageable, while the actual volatility of Bitcoin prevent it from being a store of value and means of value transfer.

Further, they are stable in that they save the purchasing power of their owner.
A gold-backed stablecoin is more stable of a $-backed stablecoin, even if its price fluctuate more than the price of the $-backed stablecoin, when compared to the $.
The reason for that is that gold save the purchasing power of its owner more that the $

[mayo2u]

In the short term meaning days, weeks and months of course all major fiat currencies are more stable. What crypto is doing is providing an alternative means of sending, spending and storing value. Crypto can only work well provided that there are stable societies that permit it politically: meaning that miners and users of crypto are not hunted down as enemies of the state and secondly that there is a stable electric and internet grid.

Come anarchy, come the zombie apocalypse neither fiat nor crypto would have value. In fact fiat would have a LOT more value. It could, once again be considered a means of exchange as it would be relatively scarce and could no longer be recreated. Not to mention, that at worse, it could be used in fires. Crypto? Without electricity and the internet crypto doesn't exist.

Your analysis of fiat conflates Cash with all fiat; and may actually be backwards.

Without electricity, Crypto safely resides in various blockchains and wallets. Fiat, the largest fraction of which resides in electronic ledgers, may be forever lost.
<b>
Neither crypto, or fiat, is dependent on the Internet. The messages by which transactions are sent to miners are not Internet based. And for Fiat, pretty much the same is true.</b>

Hmm. Good point. I did conflate cash with fiat. They are absolutely not the same.

And you're correct Crypto will still exist, but in a very crippled form. I would not consider to be useful in the zombie apocalypse. Although it would be potentially be useful after we rise up out of the ashes.

[X-ray]

Volatility is one significant association with the world of cryptocurrency. This is evident even with the stable coins like tether. In reality, cash is more stable than crypto and  I don't think anybody who has experienced both worlds, would argue about this.

Most of the people don't know that fiat even don't have stable value so they might argue that crypto is not stable and fiat is more stable.

But when we try to see from the technical view and i have no reason to call fiat as something that can be valued. It's caused by the fiat created by the government and we will be back again to the fiat definition when

Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver

https://www.investopedia.com/terms/f/fiatmoney.asp


Where the government can make it stable? based on the demand and supply? crypto is even doing it.

But governments are printing more and more money every year which makes the demand less as well as the value so why we need to trust something not backed up anything and also losing the value year by year.

The government can't print it anytime. A lot of things must be consider before the government tried to issued a new fiat money and distributed it to the public. Fiat gains it value from the trust by the users but the economic condition of the country become the main thing to determine the time to create a new fiat money or not. When government always printing it anytime and that means inflation.

[Siren]

The price of fiat might looks stable but it is not and it never will be.

What do you mean looks stable?never the price of fiat becomes stable and we can see that on forex exchange that the value is moving every hour

The price of fiat just keep decreasing year by year due to inflation but the value of crypto changes in the pattern of change in demand for that coin.

Where did you get that idea that Fiat price is decreasing year by year?lol never that this happen,yeah maybe there is a consecutive dropping about the value but not constantly since the economy of each countries that represented those fiat changes and some grows while some are not

[coolcoinz]

We shouldn't generalize. There are fiat currencies that are or used to be much more volatile than Bitcoin and Bitcoin isn't really stable compared to stablecoins. Just take a look at some fiat currencies that went through the process of hyperinflation. Compare Bitcoin or stablecoins to the currency of Venezuela or Zimbabwe. But wait, there's more cases, much more. Greece during WW2, Poland after WW1 and later when communism was coming to an end in the 80s, China in the 40s...
These currencies weren't going through a cycle like Bitcoin with 500% increase in a year. No, they were going through a cycle of 10,000% decrease! If Bitcoin experienced a bubble like that you'd be able to live like a king for the rest of your life with just 1 coin. Calling bitcoin volatile is really unjust.

[ck343]

@ coolcoinz,
Your comparison with fiat currencies is flawed, because you consider the fiat currencies you mentioned, only while they were collapsing.
I wouldn't talk about volatility in that case

Compared to the major currencies since Bitcoin exists, Bitcoin is volatile.
For example, as far as I know, in this period it has been more volatile than any commodity.