Currency Standard

The currency standard in cryptocurrency refers to using cryptocurrency as the unit of pricing and settlement, rather than using fiat currency or stablecoins as a reference. It is a cryptocurrency-led value concept and transaction method, which is conducive to the value stability, autonomy, decentralization and popularity of cryptocurrency. For example, if a trading platform adopts currency-based contracts, users can directly use Bitcoin as margin and calculate profits or losses in Bitcoin. In this way, users do not need to care about exchange rate changes of the US dollar or other fiat currencies, nor do they need to hold stablecoins to offset risks. At the same time, users can also express their trust and support for Bitcoin and enjoy the benefits brought by the increase in Bitcoin prices.

The Impact of Currency Standard

Coin-based currency has both positive and negative impacts on the development of cryptocurrencies.

Positive Influence

• The currency standard can improve the circulation and usage of cryptocurrency, making it closer to the function of real currency.

• Coin-based currency can reduce the need for fiat currencies or stablecoins, reducing transaction costs and risks.

• The currency standard can enhance the community cohesion and trust of cryptocurrency and promote innovation and cooperation.

Negative Impact

• The currency standard may increase the volatility and uncertainty of cryptocurrency and affect its value stability.

• The currency standard may lead to the isolation and isolation of cryptocurrencies and reduce their interaction with other markets and society.

• The currency standard may cause environmental problems for cryptocurrency, increasing its energy consumption and carbon emissions.

Therefore, the currency standard is a double-edged sword for the development of cryptocurrency. It is necessary to balance its pros and cons and choose the appropriate strategy according to different situations and goals.

Advantages of Currency Standard

The advantages of currency standard are as follows:

1. The currency standard can improve the circulation and usage of cryptocurrency, making it closer to the function of real currency.

2. Coin-based currency can reduce the need for fiat currencies or stablecoins, reducing transaction costs and risks.

3. The currency standard can enhance the community cohesion and trust of cryptocurrency and promote innovation and cooperation.

4. The currency standard can avoid exchange rate problems and improve the efficiency and fairness of international investment and trade.

Disadvantages of Currency Standard

The main risks of implementing currency standards in cryptocurrency are:

1. Coin-standardization will increase the volatility and uncertainty of cryptocurrencies, making them more difficult to predict and manage.

2. Coin standardization would reduce the liquidity and convertibility of cryptocurrencies, making them more difficult to trade with other currencies or assets.

3. Coin-standardization increases the technical and security risks of cryptocurrencies, making them more vulnerable to attack or loss.

4. The currency standard will reduce the popularity and acceptance of cryptocurrencies, making it more difficult to gain legal and social recognition.

Which Cryptocurrencies Are Coin-Based?

There are many currency-based cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, Monero, etc. These cryptocurrencies use themselves as the unit of denomination and settlement, rather than using fiat currencies or stablecoins as a reference. What these cryptocurrencies have in common is that they have high market capitalization and trading volume, and have many supporters and users. They are relatively popular cryptocurrencies that are generally recognized by the public.