☕ [Analysis] How stablecoins can become currency to buy coffee - JP Koning

Volatility in Bitcoin ($BTC) has made it difficult to use as a payment system like Paypal or Visa. According to Koning, stablecoins, pegged to fiat currencies, can become what Bitcoin did not by sidestepping volatility but keeping other core features. For stablecoins to become common currency, however,they need to identify and then implement these features. First, stablecoins should adopt Satoshi Nakamoto's non-reversibility design, which makes Bitcoin operate like digital cash: no third party mediation on disputed contracts. Anti-Money Laundering (AML) laws required for regulated stablecoins make implementing this design difficult though. Even if non-reversibility is implemented, stablecoins still have to be adopted by the market. The best way is through merchants who can pass along the savings from the non-reversibility design--to lack third party oversight is to lack overhead costs--to the consumer. Even still, behavioral theory shows that humans digest gains and losses asymmetrically and that discounting is not always as effective a method as once thought. Stablecoins still have a lot of questions to answer.

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