NewsBTC
No Result
View All Result
  • Cryptocurrency News
    • Bitcoin News (BTC)
    • Ethereum News (ETH)
    • Ripple News (XRP)
    • Shiba Inu News (SHIB)
    • Cardano News (ADA)
    • Dogecoin News (DOGE)
    • Solana News (SOL)
    • Litecoin News (LTC)
    • Avalanche News (AVAX)
    • Polygon News (MATIC)
  • Crypto Prices
    • Binance Coin (BNB) Price
    • Bitcoin (BTC) Price
    • Cardano (ADA) Price
    • Chainlink (LINK) Price
    • Dogecoin (DOGE) Price
    • Ethereum (ETH) Price
    • Litecoin (LTC) Price
    • Polkadot (DOT) Price
  • Crypto Resources & Directory
  • All Crypto
  • Play GamesTry
  • CasinosTry
Breaking News: SoftBank, Ark Invest Among Potential Investors In Tether's $15 Billion Funding Round
  • Cryptocurrency News
    • Bitcoin News (BTC)
    • Ethereum News (ETH)
    • Ripple News (XRP)
    • Shiba Inu News (SHIB)
    • Cardano News (ADA)
    • Dogecoin News (DOGE)
    • Solana News (SOL)
    • Litecoin News (LTC)
    • Avalanche News (AVAX)
    • Polygon News (MATIC)
  • Crypto Prices
    • Binance Coin (BNB) Price
    • Bitcoin (BTC) Price
    • Cardano (ADA) Price
    • Chainlink (LINK) Price
    • Dogecoin (DOGE) Price
    • Ethereum (ETH) Price
    • Litecoin (LTC) Price
    • Polkadot (DOT) Price
  • Crypto Resources & Directory
  • All Crypto
  • Play GamesTry
  • CasinosTry
Bitcoin News
No Result
View All Result
Breaking News: SoftBank, Ark Invest Among Potential Investors In Tether's $15 Billion Funding Round

Stablecoin Done Right for Traders Miners and Merchants

NewsBTC
NewsBTC
5 years ago
4 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

 

The crypto world needs a stablecoin it can trust. In case you are new to this game, let’s explain that a little further. No, we’re not talking about making Bitcoin, Ethereum et al less volatile. That’s something that will likely come with age. Instead, we are talking about solving a problem that confronts all crypto traders – where to hide when the going gets tough?

The market is falling precipitously and as an investor or trader you want to protect your portfolio from losses. If your coins are on an altcoin exchange that doesn’t handle fiat then your options are limited to using a token issued byTethercalled UST or the lesser known Dai token from MakerDAO.

Tether, as its name suggests, has its valued tethered to that of the US dollar. This is what is known as being “pegged” in economics.

For instance, sometimes government’s peg their currency to the value of another currency. For example, The Swiss Franc was pegged to the euro between 2011 and 2015. When the euro cap was removed, the value of the Swiss Franc soared, suggesting that the currency was undervalued while it was pegged to the euro.

What’s wrong with Tether?

Tether is pegged to the US dollar so that its value does not deviate very much from 1 USDT = 1 USD. This feat is achieved by matching the issuance of USDT by backing each one with an equivalent sum of dollars. Currently there are 2.3 billion USDT in circulation, which means there should be$2.3 billion dollars held by Tether. The trouble is no-one knows for sure whether that is in fact the case.

This goes to the root of the problem with Tether but also its alternatives such as MakerDAO and Basecoin, which is currently still in the works – they are centralised systems. Because they are not mined as with a typical cryptocurrency and their issuance is in the hands of a central authority, there is no transparency to their operations. A blockchain startup called Kowala is taking a radically different approach, as we shall see.

Of course this could be fixed in the case of Tether by it having its accounts audited by a reputable firm of accountants, although it should be said that it is not unknown for auditors to sign off on company accounts that have shown signs of what we might be generously describes as a creative application of balance sheet reconciliation.

Up until early this year auditing firm Friedman LLP was providing its services to Tether. The, out of nowhere, at the end of January it was reported that Friedman had “dissolved” its relationship with Tether.

Of the many known unknowns circulating around Tether, the size of its dollar holding is perhaps the most worrisome imponderable. However, there are other  worries, such as who is its banker, why can’t USDT be directly redeemed for dollars and what is the nature of its relationship with altcoin exchange Bitfinex?

On that last point there have been persistent suspicions that Tether, which is owned by the same corporate entity as Bitfinex, may have been issuing more USDT to Bitfinex, which in turn has been using those funds to artificially inflate the price of bitcoin. It should be added that none of those charges against Tether have been proven but neither has the company come forward to dispel the rumors with hard facts.

Kowala stays true to crypto ethos and technology

There has to be a better way ahead for stablecoins and Kowalathinks it has found it.

Rather than relying on the seemingly arbitrary issuance of tokens by a centralised corporation, Kowala has instead chosen to stay true to the ethos and technology of blockchain by letting the market set the value, but then regulating it through a dynamic adjustment of supply and and block reward to control the price.

Kowala’s Yap Consensus provides the algorithms that handle the issuance and mining and crucially it comes with the full transparency of a public blockchain.

Unlike is the usual mining set up where nodes compete to mine, the Yap Consensus is predicated on co-operation. The upshot of that is a blockchain that maintains the security of blockchain with more energy-efficient and, therefore, less costly mining. Kowala does not use proof-of-work in its consensus mechanism, preferring what it dubsproof-of-control, which sets a threshold for the amount of mUSD a node must own before it can mine.

Making mining easy again

The kUSD token which acts as the stablecoin has a partner token called mUSD which gives its owner the right to mine and to a share of the profits. Mining rights can also be leased.

In short then, kUSD is pegged to the value of the dollar but not by owning the underlying asset. kUSD connects to the outside world through oracles that are essentially are data feeds from crypto exchanges. The k protocol is the mechanism that constantly pings for this information in real-time and feeds it into the algorithms of the wider Yap Consensus system.

The block reward, the stability fee that kicks in if the block reward mechanism is insufficient to maintain price stability and lastly the trading activity mechanism that encourages market participants to take advantage of the arbitrage opportunities to push the kUSD price back to $1, areall designed to work best with multiple exchanges in order to optimize price discovery, although Kowala still works with just one participating exchange.

Likewise, the platform is able to function with as few as three active traders on the platform, although it is designed to function at massive scale.

Made for traders, merchants and consumers

Kowala’s mission is to create a cryptocurrency that abolishes volatility while keeping the advantages of the nascent asset class in terms of low transaction costs, speed, security and privacy.

It also holds the promise of making cryptocurrencies easier to use for merchants because it will stamp put the volatility that makes crypto an unreliable unit of account. With that in mind the Kowala team has built a wallet to make using the token a piece of cake.

If this all comes together as advertised, then this could be the stablecoin crypto traders have been waiting forand merchants and consumers too.

Tweet123Share196ShareSend
NewsBTC
NewsBTC

NewsBTC

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

Related News

XRP and Solana Investors Eye SpacePay for Q4 Gains, Here's Why

XRP and Solana Investors Eye SpacePay for Q4 Gains, Here’s Why

XRP and Solana holders are increasingly allocating capital to SpacePay’s presale as a strategic Q4 investment that offers utility-driven returns...

ericdunne519 4 days ago
dHealth Intelligence Launches a Medical-Grade AI Agent Engineered for Privacy and Trust

dHealth Intelligence Launches a Medical-Grade AI Agent Engineered for Privacy and Trust

A revolutionary convergence of AI and blockchain is finally delivering practical solutions for everyday healthcare users. dHealth has unveiled a...

ericdunne519 6 days ago
D’CENT Wallet Launches GasPass, Bringing Gas-Free Blockchain Transactions

D’CENT Wallet Launches GasPass, Bringing Gas-Free Blockchain Transactions

D’CENT Wallet, the hardware wallet maker best known for pioneering biometric crypto security, just unveiled GasPass. The feature removes one...

Aaron Walker 1 week ago
Load More

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Related News

top kryptomeny na investovanie október

Top 3 kryptomeny na investovanie v októbri 2025

Nina Šefčíková 2 hours ago
BlockchainFX Brings You the Best of Solana (SOL) and Cardano (ADA) Trading:

BlockchainFX Brings You the Best of Solana (SOL) and Cardano (ADA) Trading: Here’s How

ericdunne519 2 days ago

GBC Mining Platform Could Benefit as Saylor Predicts Bitcoin’s “Smart Move Up” by Year-End

ericdunne519 4 days ago

Premium Sponsors

Press Releases

  • Grok が示す ドージコイン 今後 の行方:マスク主導のラリーと Maxi Doge の可能性

    Grok が示す ドージコイン 今後...

    2 hours ago
  • リップル 今後の価格予測:3ドル抵抗線が迫る三角ブレイクの行方

    リップル...

    2 hours ago
  • ビットコインが114,000ドル回復:今注目すべき仮想通貨プレセール

    ...

    3 hours ago
  • ビットコインが11万4,000ドルに回復:Geminiが選ぶ仮想通貨おすすめ銘柄

    ...

    3 hours ago
  • 新しい仮想通貨のプリセールが急上昇、大口投資家が1日で32.9万ドル購入

    ...

    4 hours ago

Newsletter

About Us

NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

Company

  • About Us
  • Advertising
  • Contact Us
  • Privacy Center

Social

© 2025 NewsBTC. All Rights Reserved.

  • Cryptocurrency News
    • Bitcoin News (BTC)
    • Ethereum News (ETH)
    • Ripple News (XRP)
    • Shiba Inu News (SHIB)
    • Cardano News (ADA)
    • Dogecoin News (DOGE)
    • Solana News (SOL)
    • Litecoin News (LTC)
    • Avalanche News (AVAX)
    • Polygon News (MATIC)
  • Crypto Prices
    • Binance Coin (BNB) Price
    • Bitcoin (BTC) Price
    • Cardano (ADA) Price
    • Chainlink (LINK) Price
    • Dogecoin (DOGE) Price
    • Ethereum (ETH) Price
    • Litecoin (LTC) Price
    • Polkadot (DOT) Price
  • Crypto Resources & Directory
  • All Crypto
  • Play Games
  • Casinos
Advertise

© 2025 NewsBTC. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.