One of the problems of the existing cryptocurrency market at its current stage of development is its high volatility and lack of stability. The cryptocurrency rate can change by 10% to 20% in a few days. And if the traders can gain profit from the change of the exchange rates, ordinary guys only have problems because of such changes. It is this volatility that slows down the use of cryptocurrencies in commodity-and-money turnover and positions cryptocurrencies exclusively as a speculative-grade tool.
Figure 1. Ethereum exchange rate. The exchange rate twofold decrease over 2 weeks
Figure 2. Bitcoin exchange rate. The exchange rate dropped by more than 25% in 2 weeks
But the cryptocurrency market is not just twiddling its thumbs. As early as in 2015, the first stable coins appeared, i. e., cryptocurrencies which are 100% backed by this or that traditional valuable asset. Unlike conventional cryptocurrencies, the price of which is largely determined by abstract factors (most often the balance of supply and demand in the market) and is, therefore, highly volatile, stable coins are fully pegged to the value and rate of the asset which they are backed with, so they have a stable price, i. e. low volatility.
The leader among stable coins is Tether. Initially, it was pegged only to the US dollar in the ratio 1:1 and was designated USDT. Tether’s policy is to maintain a provisional bank account with the amount of money corresponding to the number of printed USTD coins in order to provide backing for them. That is, if the turnover is 50 million USDT, the provision maintained by Tether Limited is 50 million USD, etc. If someone withdraws all or a part of their USDT, converting them into ordinary dollars, this amount is debited from the account, and the same number of tokens is cancelled at the same time. If the account is replenished (someone buys tokens), they are printed to order in real time.
Figure 3. USDT stability over a three-months period.
Among other stable-coins, we can also mention EURT, TUSD, DGX.
Three years passed, and many things have changed, and new regulatory tools for the cryptocurrency market as a whole emerged. For instance, exchange transactions can only be made through stock exchanges, banks block transactions aimed at the replenishment of stock exchange accounts, it is necessary to undergo complex and long procedures of identity verification (KYC), which significantly complicates the entry into the cryptocurrency market for new players. When there is demand, the market immediately generates new supply. A tool which is not unique, but rather interesting is points offered by CryptoPoints. The company produces prepaid cards pegged to the dollar with a 1:1 ratio. Thus, buying a card for 100 points for $100, you always have exactly 100 points on your account, the price of which is exactly $100. At any time, one can make transactions to buy the most popular cryptocurrencies at their current rate (on the day of the transaction). Currently, three cryptocurrencies are supported: Bitcoin, Ethereum, Litecoin.
Figure 4. A CryptoPoints prepaid card, with par value of 500 points
The main advantages of CryptoPoints prepaid cards are the following:
- There are no losses or rate volatility. The card always has points which are pegged to the US dollar in 1:1 ratio. The very moment when you need to add money to your wallet or pay someone in cryptocurrency, you perform the operation of points conversion into the required cryptocurrency and then send it.
- CryptoPoints offers the easiest way to purchase cryptocurrency. It is no longer necessary to register an account at a stock exchange, to pass KYC procedure, or to confirm and unblock the bank transactions which were suspended. All you need to do is to buy a card, scratch off the protection over the security code, enter it at https://getcryptopoints.com website, and immediately after that you can buy the amount of cryptocurrency you need, at the best rate.
- There are no limits on transfers. Whereas at some exchanges, such as Bitfinex, there are limits on withdrawal and conversion, by using https://getcryptopoints.com service, you can transfer any amounts to any wallets.
- You can pay for your cards by bank transfer, because it is a physical product not subject to any restrictions which are in force in the cryptocurrency market.
- It is possible to become a partner of CryptoPoints and develop your own business, reselling cards with a mark-on in places with high foot traffic or in the currency exchange offices of your city.
Places where you can buy a CryptoPoints prepaid card:
- At https://getcryptopoints.com web site, paying by bank transfer or through processing with the use of VISA, MasterCard cards. Cards can be received in two ways: they can be delivered (the buyer pays for the delivery) or sent electronically by e-mail (at no charge for the buyer).
- In currency exchange offices where CryptoPoints physical cards are offered.