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Complete Guide on E-stablecoins: Stablecoins Pegged to Electricity

UTC by Beatrice Mastropietro · 9 min read
Complete Guide on E-stablecoins: Stablecoins Pegged to Electricity
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In this guide on e-stablecoins, we will discuss a new breed of stablecoins pegged to electricity. E-stablecoins are unique in that they are backed by an asset that is not subject to volatility – something that is sorely lacking in cryptocurrency. We will explore what makes these coins special and how you can get involved in this exciting new market.

As the world becomes increasingly digitized, it’s no surprise that cryptocurrencies are gaining popularity. Bitcoin (BTC), the first and most well-known cryptocurrency, was created in 2009. Since then, thousands of other cryptocurrencies have been created. Most of them are volatile, meaning their prices can fluctuate greatly in a short period. This makes them unsuitable for many purposes, such as a means of payment or a store of value. This is where stablecoins come in.

Stablecoins are cryptocurrencies pegged to a stable asset, such as gold or the US dollar. This means that their prices are less volatile than other cryptocurrencies. There are different types of stablecoins, including those backed by fiat currencies, commodities, and even electricity. We will get deeper into the latest ones.

E-stablecoins are a type of stablecoin that is pegged to the price of electricity. They are designed to offer the stability of a traditional currency with the added benefits of being environmentally friendly and sustainable.

E-Stablecoin’s Concept

E-stablecoins are digital assets that aim to stable prices by pegging them to electricity prices. In theory, this would create a more stable cryptocurrency ecosystem, as the price of e-stablecoins would be less volatile than traditional cryptocurrencies. There are a few different ways that e-stablecoins can be pegged to electricity prices, and each method has its advantages and disadvantages.

One method is to use an oracle to track electricity prices. The oracle would provide data on electricity in various markets, and the e-stablecoin would be pegged to that data. This method is simple and does not require any special infrastructure. It is reliant on the oracle being accurate and reliable.

Another method is to use a smart contract to track electricity prices. The smart contract would be programmed to track the price of electricity in various markets and adjust the supply of e-stablecoins accordingly. This method is more complex than an oracle but is also more resilient to errors and Manipulation.

There is no clear answer as to which method is better. Each method has its advantages and disadvantages. Oracle-based e-stablecoins may be simpler to create and manage, but they depend on the oracle being accurate and reliable. Meanwhile, smart contract-based e-stablecoins are more complex.

It is important to note that neither method is perfect. Oracle-based e-stablecoins may be subject to manipulation if the oracle is not reliable. Smart contract-based e-stablecoins may be subject to errors if the smart contract is not programmed correctly. Ultimately, it is up to the developers of each e-stablecoin to decide which method is best for their project.

The main advantage of e-stablecoins is that they are more stable than other types of cryptocurrencies. This is because electricity prices are not as volatile as those of other commodities. E-stablecoins can also be used to hedge against inflation.

The main disadvantage of e-stablecoins is that they are not widely accepted yet. Some businesses may not accept e-stablecoins as payment. Additionally, e-stablecoins are not as liquid as other types of cryptocurrencies.

Why E-Stablecoins Are Gaining Traction

E-stablecoins are a new class of cryptocurrencies that aim to provide stability by pegging their value to electricity. The name “e-stablecoins” comes from the fact that these coins are backed by electrons, the particles that makeup electricity.

The idea for e-stablecoins came about because traditional fiat currencies (such as the US dollar) were prone to inflation, and recent years have seen an electricity price increase. E-stablecoins hope to offer a more stable form of currency by pegging their value to electricity.

There are two main types of e-stablecoins: those pegged to the US dollar, and those pegged to the price of electricity.

E-stablecoins pegged to the US dollar aim to maintain a stable value by pegging their supply to the amount of electricity generated in the United States. The developers of these coins believe that this will create a more stable currency, as the supply of e-stablecoins will increase when demand for electricity increases, and decrease when demand decreases.

E-stablecoins pegged to the price of electricity aim to maintain a stable value by pegging their supply to the amount of electricity consumed globally. The developers of these coins believe that this will create a more stable currency, as the supply of e-stablecoins will increase when demand for electricity increases, and decrease when demand decreases.

Notably, e-stablecoins have the potential to revolutionize the way we use and store value. By pegging their value to electricity, they offer a more stable alternative to traditional fiat currencies. They could help facilitate the transition to a low-carbon economy by providing a financial incentive for investing in renewable energy.

Features of E-Stablecoins

E-stablecoins are unique because they offer all the benefits of traditional stablecoins, such as price stability and low volatility, while also being eco-friendly and sustainable. In addition, e-stablecoins can be used to power decentralized applications (dApps) and smart contracts on the Ethereum (ETH) blockchain.

Some of the key features of e-stablecoins include:

  • Price stability. E-stablecoins are backed by a reserve of electricity held in a smart contract on the Ethereum blockchain to ensure price stability. The electricity reserve is used to stabilize the price of e-stablecoins when there are large swings in the market.
  • Low volatility. The price of e-stablecoins is pegged to the price of electricity, which is relatively stable compared to other fiat currencies and commodities. As a result, e-stablecoins are less volatile than traditional stablecoins.
  • Eco-friendly and sustainable. Electricity is an abundant and renewable resource that can be generated from various sources, such as solar, wind, and hydropower. By pegging their electricity value, e-stablecoins are eco-friendly and sustainable.
  • Can be used to power dApps and smart contracts. E-stablecoins can power decentralized applications (dApps) and smart contracts on the Ethereum blockchain. This is because e-stablecoins are ERC20 compliant, which means they can be used with any Ethereum-based dApp or smart contract.
  • Transparent and auditable. The supply of e-stablecoins is transparent and auditable on the Ethereum blockchain. This allows users to track the supply of e-stablecoins and ensure that there is no central authority controlling the supply.

Uses of E-Stablecoins

E-stablecoins are pegged to the price of electricity and are designed to stabilize by being backed by a real asset. This makes them different from other stablecoins, either fiat-collateralized or crypto-collateralized. E-stablecoins have several benefits over other types of stablecoins, which allows to use them in a number of cases:

  • Storing value. Firstly, a use case for e-stablecoins is simply storing value. This is because e-stablecoins are pegged to the price of electricity. Thus, they will maintain their value over time. Additionally, e-stablecoins can be easily traded on exchanges. This makes them a convenient way to store value.
  • Hedging. Secondly, e-stablecoins can help hedge against price volatility.
  • Paying for electricity. Further, you can use e-stablecoins to pay for electricity. Additionally, they can be used to pay for other goods and electricity-related services, such as electric car charging stations.
  • Unit of account. Another use case is using these assets as a unit of account.
  • Medium of exchange. A final use case for e-stablecoins is using them as a medium of exchange.
  • Investments. Because e-stablecoins are pegged to the price of electricity, they will maintain their value over time. They can be easily traded on exchanges.
  • E-Stablecoins and decentralized applications. E-stablecoins can be used in decentralized applications in various ways. They can be used to pay transaction fees, purchase goods and services, or simply store value. Additionally, e-stablecoins can be used to create new decentralized applications. For example, an e-stablecoin could be used to tokenize electric car charging stations.

What’s Next?

The future of  E-stablecoins is shrouded in great potential. Soon, we can expect more countries to create their sovereign digital currencies. These will be based on blockchain technology and pegged to a commodity like electricity. This would help these countries to stabilize their economies and protect against inflation. Moreover, it would also help them move away from traditional fiat currencies. Saudi Arabia and Sweden are already working on their digital currencies.

The future of e-stablecoins is promising. With the right strategy and implementation, e-stablecoins could become a significant force in cryptocurrency. Here are some potential applications and use cases for e-stablecoins:

  1. Banking and financial services. E-stablecoins could be used to facilitate international money transfers, payments, and settlements. They could also be used as a reserve currency or collateral for loans and other financial products.
  2. E-commerce and retail. E-stablecoins could be used to purchase goods and services online. They could also be used as a loyalty or rewards currency.
  3. Government services. E-stablecoins could be used to pay taxes, fees, and other government charges. They could also be used to disburse government benefits.
  4. Public Infrastructure. E-stablecoins could be used to finance and operate public infrastructure projects, such as roads, bridges, and tunnels.
  5. Charity and humanitarian aid. E-stablecoins could be used to donate to charities and provide relief to disaster victims.
  6. Gambling and gaming. E-stablecoins could be used to place bets or wagers on games of chance. They could also be used to purchase in-game items and currency.
  7. Predictions markets. E-stablecoins could be used to trade contracts that pay out based on the results of future events, such as elections or sports matches.
  8. Social media tipping. E-stablecoins could be used to tip content creators on social media platforms, such as YouTube, Twitter, and Instagram.
  9. Micro-lending. E-stablecoins could be used to provide small loans to businesses and individuals in developing countries.
  10. Data storage and processing. E-stablecoins could be used to pay for data storage and processing services.

Bottom Line

E-stablecoins are a type of cryptocurrency that is pegged to the price of electricity. E-stablecoins are more stable than other types of cryptocurrencies and can be used to purchase goods and services or to pay for electricity. They are not widely accepted yet, but they are becoming more popular as businesses begin to accept them as payment.

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FAQ

What are e-stablecoins?

E-stablecoins are a type of stablecoin that is pegged to the price of electricity. They are designed to offer the stability of a traditional currency with the added benefits of being environmentally friendly and sustainable.

How did e-stablecoins appear?

The first e-stablecoin was created in 2014 by the company BitShares. The coin was called BitUSD and was pegged to the US dollar. In 2015, other companies followed suit and created their versions of e-stablecoins.

Who created e-stablecoins?

It was issued as a token on the BitShares blockchain. The pioneering digital asset was the brainchild of two future leading figures in the cryptocurrency industry, Dan Larimer (EOS) and Charles Hoskinson (Cardano), CoolWallet notes.

How do e-stablecoins work?

E-stablecoins are digital assets pegged to a stable asset, such as a fiat currency or gold. They are usually backed by a reserve of the underlying asset and can be used to trade store value or make payments. E-stablecoins offer several advantages over traditional fiat currencies, including lower transaction costs, faster transaction speeds, and greater security. In addition, e-stablecoins are often more volatile than fiat currencies, which makes them attractive to investors seeking to capitalize on price movements.

What are the use cases of e-stablecoins?

E-stablecoins can be used for a variety of purposes, including payments and settlements, store of value, hedging against cryptocurrency price volatility, lending and borrowing, investing, and speculation.

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