It’s believed that cryptocurrencies are an absolute innovation, and experts are confident that in the future this type of digital money will produce a complete revolution in the finance world. Despite the presence of a huge number of advantages in use and great demand among customers, cryptocurrencies have one significant drawback — instability.
Stable digital tokens — stablecoins, have been created for all people who are afraid for the safety of their funds at times of price fluctuations. This article will tell you what stablecoins are and explain where they can be purchased in 2022.
Stablecoins in the World of Modern Cryptocurrencies
What are stablecoins? A stablecoin is a digital token whose value is tied to a fixed economic unit. It can be, for example, a euro or a dollar. The idea is to reduce price fluctuations and create a system that is more convenient for everyday use. For each issued unit of a stablecoin, an equivalent unit of an economic unit is deposited as collateral.
To date, there are more than 39 types of stablecoins, the most popular of which are the following digital tokens:
- Tether;
- USD Coin;
- True USD;
- Paxos Standard Token;
- Gemini Dollar;
- DAY;
- Stasis Eur Usd;
- HKD;
- PHP;
- Brazilian Digital Token;
- IDK;
- PHX and many others.
Conventional cryptocurrencies have a fixed or limited issue, while stablecoins are limited only by the economic resources to which they are tied. Consequently, they are regulated depending on the market situation.
Types of Stablecoins
There are different methods of maintaining the value of cryptocurrencies, and there are currently three different types of digital token data on the market:
- stablecoins with fiduciary guarantee, — secured by reserve assets, that is, for each stablecoin in circulation, there must be an equivalent in dollars stored in the bank;
- stablecoins backed by cryptocurrencies, — the goal is to create a balance between the benefits of decentralization, while cryptocurrency reserves absorb market volatility;
- unprotected stablecoins, — they aren’t tied to any reserve but instead use smart contracts to control price fluctuations, issue, and purchase tokens.
In general, stablecoins are now progressive and promising digital tokens, which causes even greater demand from users. This type won’t be suitable for people who plan to earn on market volatility, but stablecoins will be an excellent solution for customers who want to fix the balance!
Where to Buy a Stablecoin?
In fact, the place of stablecoins’ purchase depends on the specific digital asset. The most popular stablecoins can be found on almost all well-known exchanges (the most commonly used are Binance or TabTrader), but you often have to struggle with finding and acquiring little-known tokens.
In addition, there are three main ways to buy stablecoins:
- directly from the seller, — this option isn’t supported by all companies;
- through an online exchanger for fiat money or for cryptocurrency, — your money goes to the details of the exchange office, and after that, the employees send the stablecoins to your wallet;
- directly on the exchange, — a pair containing the desired stablecoin is selected, and then an application for its purchase is sent.
Stable coins have become popular because they eliminate uncertainty and provide the desired predictability, and it is also a good way to preserve assets during periods of high volatility in the crypto market. The disadvantages of centralized stablecoins include insufficient transparency.