I have decided to write about Paxos Standard (PAX) as my homework theme for week 7. PAX is a stable coin that has exactly the same value as the USD. It has a market cap at the moment of about 800 million USD and is one of the larger stable coins right now at 89 position on Coinmarketcap. Why is it fixed with the USD? Well, because the USD is the fiat currency most used in market transactions all over the world, and it is one of the less volatile coins, yes the Euro is not bad as also the Japanese Yen or the Chinese Yuan, but being realistic the USD is accepted everywhere.
Now what are the advantages of using a coin like Paxos Standard? Well for one thing it can be converted instantly back to USD, you can use it to purchase goods and services, it can be easily sent peer to peer with no middle men, and of course its value is always stable. It is also a haven for when the crypto market goes into one of its volatile phases and you still want to hold your money in crypto, not in fiat. I think Paxos Standard is really one of the better stable coins and I think it does give the most important thing people look for - security.
Now what are the disadvantages? Well it is backed by third party companies that can go bad, it is centralized, and most important its price is fixed with the USD so any devaluation faced by the USD will be reflected in the PAX value, this I think is its major drawback. Also, as an apart, on its site it says you can safely keep your USD in PAX and not worry about them, but I am not making any money by keeping my money in PAX, I might as well just have my fiat in a safe, it will be just as secure.
In my mind what I see is a future where the big crypto currencies such as Bitcoin, Ethereum stabilize their prices and stable coins will not be needed as the big ones will in themselves be stable coins. Of course as I have said before it could be that we will in the future see a new crypto that will rule them all.