Digital Cash FAQ
A short overview of questions & answers on distributed ledger technology, stablecoins & pools.
What is Distributed Ledger Technology?
Distributed Ledger Technology (DLT), more commonly known as “blockchain” technology, forms the basis of cryptocurrencies and thus decentralized markets. Encrypted sequences of digital information units, stored consecutively in a public databases, enable secure & instant peer-to-peer transactions without centralized financial intermediaries.
What is Ethereum?
Etherum is a “blockchain”, a decentralized global software platform powered by distributed ledger technology. It is currently the largest platform allowing for the secure development of smart contracts & deployment of decentralized apps. It is also well-known for its native cryptocurrency, Ether (ETH).
What is a Stablecoin?
A stablecoin is a cryptocurrency with low volatility, due to tethering on real-world assets, such as central bank currencies. The course of the coin is backed either physically, or by algorithms. This anchoring provides high stability to stablecoins, which bitcoins inherently lack.
What is a Euro Stablecoin?
A Euro stablecoin is a cryptocurrency tethered to the course of the central bank currency EUR. Well-known equivalents in USD are e.g. USD Tether, or USD Coin.
What is Custody?
Custody in the crypto market context can refer to two forms of safekeeping: either the custodyship of digital assets via the protection of distributed ledgers (smart contracts), or the secure storage of cash, or other valuables, which values have been tokenized onto a blockchain.
What is Tokenization?
Tokenization is the process by which real-world assets are turned into something of digital value. These are called tokens, which act as smart contracts on distributed ledgers.
What is a Liquidity Pool?
A liquidity pool consists of crypto assets that are kept to facilitate the trading of pairs on decentralized exchanges. Stablecoins are commonly kept in such pools, providing the users with relative stability & predictable interest rates.
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