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Sunday, November 27, 2022

Crypto dollar: which are the most convenient as an investment

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1. Fiat Collateral: Holds reserves in fiat money: it is assumed that there is at least $1 in a bank account for each token issued. Such is the case with USDT and USDC. They are the most used and the safest.

2. Hybrid collateral

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They combine fiat money and cryptocurrencies, such as DAI. In this case, the reserve is divided between crypto assets such as Ethereum or Bitcoin and other stablecoins, such as USDC or USDT, backed by fiat currency.

3. algorithmic: The best known is UST, from the Terra ecosystem, which in May lost its parity and led to the fork of the network, in addition to putting the crypto world in check. Its operation is based on a coin issuance and redemption algorithm. In the aforementioned case, for each UST created, US$1 of LUNA (Terra’s native cryptocurrency) was withdrawn from circulation and vice versa. They are not the most convenient.

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Four. crypto collateral: in this case, the endorsement are other digital currenciesas the case of DOCcollateralized in Bitcoin.

Crypto dollar: where to buy them

Buying dollars in cryptocurrency format is relatively simple. The first step is to have a crypto wallet, which can be easily purchased with an account in one of the exchanges that exist today in Argentina.

Some examples of the most popular are AirTm, Lemon Cash, Bitso, Buenbit or Binance.

Once the account is created, you only have to select the way to buy the cryptocurrencies. For this there are generally two options: Peer-2-Peer (P2P) and Business to Customer (B2C).

In the P2P format, you buy directly from another user of the platform and the price is established by consensus between both (so it can be lower than the average but it is also riskier). It is currently available on Binance and other similar platforms.

The B2C format is purchased directly from the exchange at a fixed price. The main advantage is the possibility of paying with any means (cards, transfer and even Mercado Pago) and the security that the cryptocurrencies will be delivered.

Source: Ambito

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