Hello Steemian !!
In this article, I will discuss the homework provided by @awesononso.

Explain why Stability is important in Digital currencies

Since the excitement of one of the cryptocurrencies, namely Bitcoin in 2017, the crypto market has become increasingly popular with many people, especially investors who have started to arrive and invest in this type of currency.

However, there is a big challenge for these investors, because this digital currency called cryptocurrency has a very high level of volatility so that it will make its price experience very significant changes in a very short time. This will make investors who initially benefited from their investments, will experience sudden losses due to this high level of volatility.

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From this explanation, we can see how important stability is in digital currencies, especially in the concept of investing in the long term for a long time. Investors definitely need a place where they can secure their digital currency assets so they don't lose because they are eroded by high volatility.

Therefore, a digital currency that has a good concept of stability that can save investors' money is called Stablecoin. A currency that has this level of stability is created by pegging the price on the coin to be the same as the commodity assets in the market. In the real world, for example, one of the most famous stablecoins is USDT which has the same price as the US dollar so that this coin has a 1:1 ratio with the US dollar. But stablecoins are not always pegged digital currencies to fiat currencies such as the US dollar, there are also other stablecoins that peg to other assets such as the Digix coin which pegs the same price as gold, so the price of 1 Digix will be equal to 1 gram of gold in the real world.

Do you think CBDCs would be good in the future? Weigh the pros and cons in your own understanding and state your position

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Central Bank Digital Currency (CBDC) is a concept where central banks in all countries create their own stablecoins based on the fiat currency of the country itself. This means that all circulation of this digital currency will be fully controlled by the central bank that issued the digital currency.

This will make this concept contrary to the concept of a decentralized system that has been used in cryptocurrencies from the start. With the control held by the central bank, the institution can easily manage, monitor, freeze the wallets of its users with ease. This makes its users no longer have freedom over their wallets.

Here are the advantages and disadvantages of CBDC:

Advantages of CBDC

1. No conflict with regulations

As we know that the biggest problem with cryptocurrencies is seeing conflicts with government regulations in various countries because the decentralized system used in digital currencies is not compatible with a centralized system where all control must be held by the local government. If the CBDC is successfully carried out, then the regulatory problem can be solved easily because the currency issued by the CBDC already meets the regulatory requirements of the local government.

2. Blockchain technology is getting better known

Blockchain technology is a very good technology and at the same time, it is a new technology, if CBDC is carried out it will make this technology increasingly known by many people because it will be introduced directly from the local government.

3. The process of financial transactions will be easier

Because blockchain technology has been applied to central banks because of this CBDC concept, the entire process of financial transactions at the central bank will be easier and more practical because it can be done online using only the devices we have every day such as laptops and smartphones.

Disadvantages of CBDC

1. Centralized system

As I explained earlier that if a cryptocurrency is made by a financial institution, the institution will freely manage the entire system and this includes access to the wallets of its users. Therefore, the system that should have been decentralized has turned back into a centralized system as before.

2. It's hard for ordinary people to use

Blockchain technology is a technology that is difficult to understand for people who don't pay much attention to technology, so if the CBDC concept is implemented with the adaptation of this blockchain, it will make many people who are ordinary people have difficulty in conducting financial transactions.

3. Own a third party

With the intervention of the central bank in the CBDC concept, it will make third parties that should be able to be deleted on cryptocurrency be used again, this is in stark contrast to the initial concept of creating cryptocurrency where one of the goals is to remove third parties from the financial transaction process.

4. More expensive transaction fees

The presence of a third party in the transaction process, makes transaction costs more expensive because of additional costs that must be incurred by users.

From all the advantages and disadvantages that I have explained earlier, I conclude that CBDC concept is not good for future use. I take this because if there is an institution that returns to the transaction process, it will create a decentralized financial system that is progress and will return to its old system, namely a centralized system controlled by a third party.

Explain in your own words how Rebase Tokens work and Give an illustration

The Rebase Token is a stablecoin that is based on the concept of the stability of a digital currency which is the same as other stablecoins. However, there is one thing that distinguishes it from other stablecoins, which is to maintain price stability by regulating the supply of circulating tokens.

Token Rebase creates a mechanism that will adjust the supply of its tokens circulating in the market when the price changes up or down. If the demand for tokens in the market increases and the price of Rebase tokens increases as well, then the system will increase the circulating supply as well so that the price volatility can be suppressed.

But if the demand for tokens in the market decreases, the system will also reduce the supply of circulating tokens so that the price will not decrease. It is the same as the law of supply and demand.

For example, if I make a purchase of 10 Rebase tokens with a token price of $1 which means I buy $10 of Rebase tokens. Then suddenly the demand for Rebase tokens decreased by 50% which made the price of Rebase Tokens decrease by 50% and of course my money also decreased by 50%. Then the system will start reducing the total supply of different Rebase tokens on the market which can cover the price drop by up to 50% so that the price remains stable.

Meanwhile, if at the time I bought the Rebase token and the demand in the market for the token increased to 100% which made my money increase 2 times. Then the system will add to the total supply circulating in the market to suppress the price increase so that the price also remains stable.

Go to the https://www.ampleforth.org/dashboard/. Check the necessary parameters and calculate the rebase %. What else can you find on the page?

From the picture above, there are 2 data/parameters that we can get to calculate the Rebase percentage, namely:

• ORACLE RATE: $1.003
• PRICE TARGET: $1.061

These two parameters will be entered into the following formula:

Rebase % = {[(Oracle Rate - Price Target) / Price Target] x 100} / 10

Okay, now I will enter the two data into the formula shown above.

Rebase % = {[(Oracle Rate - Price Target) / Price Target] x 100} / 10
= {[(1.003 - 1.061) / 1.061] x 100} / 10
= {[(-0.058) / 1.061] x 100} / 10
= {(-0.054) x 100} / 10
= (-5.466) / 10
= -0.546%

What else can we get on the page?

• On this page we can see the history of the total supply of Rebase Tokens.

• Then we can also see the Rate history and CPI History of the Rebase token.

• And we can also see the movement of Asset Performance and Weekly Returns of Token Rebase on this page.

Trade some tokens for at least $15 worth of USDT on Binance and explain your steps. (Give necessary Screenshots of the transaction)

Now I will trade by buying USDT tokens on Binance, Since I only have BTT tokens in my Binance wallet, I will choose the BTT/USDT market with the option I will sell some of the BTT tokens I have to earn USDT.

Then I filled in the price which of the BTT I want to sell at the price of 0.003607 USDT which means I will sell 4158 BTT to get around 15 USDT. After that my order will wait until someone wants to buy my BTT at the price I have made.

And on the far right picture, we can see that the trade I did was successful. My BTT has been successfully sold and I have earned around 15 USDT of USDT tokens.

Transfer the USDT to another wallet with the Tron Network. From the transaction, what are the pros of stablecoin over fiat money transactions? (Give Screenshot of the transaction)

Now I will show you how to send the USDT tokens that I bought earlier to my wallet. To do this I select the Withdraw button on my Binance wallet page, then I search for USDT tokens in the search field.

After that I will choose the type of network that I will use to send USDT Tokens from Binance to my wallet, here I will choose the Tron network (TRC 20) because it has a fairly cheap fee and fast transfer speed, after that we will be shown the amount of USDT which will be received in our wallet.

And on the far right picture, we can see that the trade I did was successful. My BTT has been successfully sold and I have earned around 14 USDT of USDT tokens.

Pros of stablecoin over fiat currency

• Ease of transaction
  The advantage of stablecoins compared to fiat currencies is the ease of doing transactions, we can see that we can make transactions wherever we want through stablecoins, even though it's abroad. Meanwhile, if we do it with fiat currency, then it will be complicated.

• Cheap transaction fees
  The costs incurred in stablecoin transactions are very low, with a fee of $1 we can make transfers wherever we want.

• Transaction speed
  The transaction speed we experience in transferring stablecoins is also very fast, in just a few seconds the USDT I sent from Binance to my wallet was already in.

Conclusion

Stability is very important in digital currencies, this is because stability is a concept that can save various investors who enter the crypto market which has a very high level of volatility. Stablecoin which is a cryptocurrency that uses the concept of stability is the answer to this problem, and it is very good progress and needs to be improved again.

I thank prof @awesononso who has created a very unique discussion topic like this, I think topics like this will make learning about blockchain and cryptocurrency more interesting to follow.

CC:
@awesononso