HIVE BACKED DOLLAR ( HBD) VERSUS TETHER ( USDT)
Stable coins were introduced into the cryptocurrency world to combat the volatile nature of cryptocurrency, and also in serving as a medium for swapping one coin for another. In this post, we are going to see the similarities and differences between two stable coins; Hive-backed dollar ( HBD) and Tether ( USDT).
TETHER
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This is a stablecoin offered by Tether Limited, a Hong Kong-based company. It is pegged in a 1:1 ratio with the US dollar. In most exchanges, it is represented by the acronym USDT.
HIVE BACKED DOLLAR
The Hive network can convert 1 HBD to 1$ worth of Hive and as such we can define HBD as the stablecoin of the Hive blockchain.
SIMILARITIES BETWEEN HBD AND USDT
Both are stable coins: In as much as the Hive-backed Dollar is not as stable as Tether, and it is a bit above 1$ in value (HBD value ranges from 95 cents to $1.05), It is a stablecoin as far as the Hive Blockchain is concerned due to the HBD stabilizer that has been put in place.
They can be used for swapping other coins: Stables are mainly used as trading pairs for most coins in the crypto market. HBD can be converted and unconverted to Hive, and used to Swap one Hive engine token for another. Tether is available in Ethereum and Binance Smart Chain for swapping coins.
DIFFERENCES
Tether is pegged at 1:1 ratio to the US Dollar, Hive Back Dollar value is pegged slightly above 1$. The advantage is that SEC and other regulatory bodies will not have any case to prove against Hive-backed Dollar unlike with Tether.
Hive-backed Dollar has a Debt limit which affects its market cap, Tether has no such Limit, the company can mint as much Tether as they desire provided they have an equivalent reserve for it.
This is my contribution to the guide on Hive-backed dollar , an initiative by @forexbrokr.
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https://twitter.com/Josemendez_1010/status/1451326571558711296
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The key here is that HBD is completely out of reach by the US regulator, while Tether will forever be watched.
In my opinion, the risks of continuing to use Tether when there are much better algorithmic stablecoin options available, are simply too high.
PS. Can I just get you to quickly edit the subheadings to use "### at the start, rather than just bolding with stars? On this and your other HBD blog
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Thanks for the observation. The corrections have been made.
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For anyone who is curious as to what Hive Backed Dollars or HBD is, here is an excellent guide.
We are also seeing the interest potentially increased to 20%.
A lot of good things happening with the Hive Backed Dollar.
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