{"id":9291,"date":"2023-07-08T00:22:47","date_gmt":"2023-07-08T00:22:47","guid":{"rendered":"https:\/\/www.bitnovo.com\/blog\/?p=9291"},"modified":"2022-05-16T15:32:02","modified_gmt":"2022-05-16T15:32:02","slug":"stablecoin-what-is","status":"publish","type":"post","link":"https:\/\/www.bitnovo.com\/blog\/en\/stablecoin-what-is","title":{"rendered":"What is a stablecoin?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Alternar tabla de contenidos\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/stablecoin-what-is\/#what_is_a_stablecoin_how_do_they_work\" >What is a Stablecoin? How do they work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/stablecoin-what-is\/#how_do_stablecoins_work\" >How do Stablecoins work?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.bitnovo.com\/blog\/en\/stablecoin-what-is\/#where_to_buy_stablecoins\" >Where to buy stablecoins?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 3<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span><div id=\"row-1211633739\" class=\"row\">\n<div class=\"col small-12 large-12\">\n<div class=\"col-inner\">\n<p>Most of the cryptocurrencies were created with the purpose of being a medium of exchange and not simply a store of value. The problem is that due to their smalls market caps,\u00a0<b>even the most popular cryptocurrencies tend to experience too much price fluctuation.<\/b>\u00a0However, do you know what a stablecoin is?<\/p>\n<p>Typically, the smaller the Market Cap of an asset, the more volatile its price will be.<\/p>\n<p>Imagine throwing a rock into a small pond. Now take the same rock and drop it into the ocean.<\/p>\n<div id=\"image_1821156656\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img fetchpriority=\"high\" decoding=\"async\" class=\"attachment-large size-large ls-is-cached lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/03\/Stablecoin-marketcap-que-es.jpg\" sizes=\"(max-width: 865px) 100vw, 865px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/03\/Stablecoin-marketcap-que-es.jpg 865w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/03\/Stablecoin-marketcap-que-es-300x154.jpg 300w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/03\/Stablecoin-marketcap-que-es-768x394.jpg 768w\" alt=\"Stablecoin marketcap Bitnovo\" width=\"865\" height=\"444\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/03\/Stablecoin-marketcap-que-es.jpg 865w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/03\/Stablecoin-marketcap-que-es-300x154.jpg 300w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/03\/Stablecoin-marketcap-que-es-768x394.jpg 768w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/03\/Stablecoin-marketcap-que-es.jpg\" data-sizes=\"(max-width: 865px) 100vw, 865px\" \/><\/div>\n<\/div>\n<p>Right now, the Market Cap for cryptocurrencies is like a little pond and every stone that falls creates a lot of fluctuation in the price.<\/p>\n<p>Imagine how difficult it is to use Bitcoin or any other cryptocurrency for daily transactions and to trade if one day it is worth X and the next day it is worth half of X.<\/p>\n<p>For that same reason,\u00a0It is important\u00a0that you know what a stablecoin is, what the types are and how they work.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div id=\"row-1875595425\" class=\"row\">\n<div class=\"col small-12 large-12\">\n<div class=\"col-inner\">\n<h2><span class=\"ez-toc-section\" id=\"what_is_a_stablecoin_how_do_they_work\"><\/span>What is a Stablecoin? How do they work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The purpose of stablecoins is to create a cryptocurrency that is not volatile.\u00a0<b>The value of a stablecoin is tied to a real world currency, also known as FIAT money.<\/b>\u00a0For example, stablecoin Tether (USDT) or stablecoin DAI are worth 1 dollar and are expected to have that value no matter what.<\/p>\n<p>Since few people really knows what a stablecoin is, they have low acceptance as a payment method and for this reason, the main use of stablecoins is for trading purposes on different exchanges.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div id=\"row-393576055\" class=\"row\">\n<div class=\"col small-12 large-12\">\n<div class=\"col-inner\">\n<h2><span class=\"ez-toc-section\" id=\"how_do_stablecoins_work\"><\/span>How do Stablecoins work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When traders want to minimize risk they can choose to trade volatile cryptocurrencies (like Bitcoin or Ethereum) for stablecoins.<\/p>\n<p>For example,\u00a0<b>if you invest in Bitcoin and the value starts to drop against the dollar, you can simply trade your BTC for the stablecoin Tether (USDT) or DAI and keep the dollar value in seconds.<\/b><br \/>\nSo, when you want to trade again, because you expect that Bitcoin will rise, you just have to change your Tether or DAI for Bitcoin again.<\/p>\n<p><b>Stablecoin types<\/b><\/p>\n<p>You may wonder\u00a0<b>how a stablecoin keep its price stable<\/b>. There are different ways to do it:<\/p>\n<div id=\"row-1809424101\" class=\"row\">\n<div class=\"col medium-6 small-12 large-6\">\n<div class=\"col-inner\">\n<p><em>Stablecoins backed by FIAT<\/em><\/p>\n<p>One way to maintain parity with the FIAT currency is by building trust in the company behind it. For this reason, companies like DAI or Tether support their stablecoins with dollars and undergo constant audits that guarantee and certify that there is a dollar behind each cryptocurrency issued.<\/p>\n<p>If the market doesn\u2019t believe that a Tether is worth a dollar, people would simply sell their USDT and the price would drop immediately.<\/p>\n<\/div>\n<\/div>\n<div class=\"col medium-6 small-12 large-6\">\n<div class=\"col-inner\">\n<p><i>Stablecoins backed by Cryptocurrencies<\/i><\/p>\n<p>Another way to maintain parity is by linking the stablecoin to one or more cryptocurrencies. This option is much simpler to audit since the company\u2019s balance can be seen on the blockchain.<\/p>\n<p>In the following chart you can find some of the most popular stablecoins, classified according to their support.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div id=\"image_1470115732\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Stablecoins-examples.jpg\" sizes=\"(max-width: 768px) 100vw, 768px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Stablecoins-examples.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Stablecoins-examples-300x189.jpg 300w\" alt=\"listado de stablecoins m\u00e1s populares Bitnovo\" width=\"768\" height=\"485\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Stablecoins-examples.jpg 768w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Stablecoins-examples-300x189.jpg 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Stablecoins-examples.jpg\" data-sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div id=\"row-168203693\" class=\"row\">\n<div class=\"col small-12 large-12\">\n<div class=\"col-inner\">\n<h3><span class=\"ez-toc-section\" id=\"where_to_buy_stablecoins\"><\/span>Where to buy stablecoins?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Bitnovo offers the opportunity to\u00a0<b>buy stablecoins online.\u00a0<\/b>It is possible to\u00a0<a href=\"https:\/\/www.bitnovo.com\/buy-dai-online-en\">buy DAI<\/a>\u00a0and also\u00a0<a href=\"https:\/\/www.bitnovo.com\/buy-tether-online-en\">buy Tether<\/a>\u00a0in just minutes.<\/p>\n<div class=\"is-divider divider clearfix\"><\/div>\n<div id=\"image_421418803\" class=\"img has-hover x md-x lg-x y md-y lg-y\">\n<div class=\"img-inner dark\"><img decoding=\"async\" class=\"attachment-large size-large lazyloaded\" src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Buy-cryptocurrency-bitnovo-DAI.png\" sizes=\"(max-width: 388px) 100vw, 388px\" srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Buy-cryptocurrency-bitnovo-DAI.png 388w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Buy-cryptocurrency-bitnovo-DAI-300x200.png 300w\" alt=\"Buy cryptocurrency bitnovo DAI Bitnovo\" width=\"388\" height=\"259\" data-srcset=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Buy-cryptocurrency-bitnovo-DAI.png 388w, https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Buy-cryptocurrency-bitnovo-DAI-300x200.png 300w\" data-src=\"https:\/\/www.bitnovo.com\/blog\/wp-content\/uploads\/2021\/02\/Buy-cryptocurrency-bitnovo-DAI.png\" data-sizes=\"(max-width: 388px) 100vw, 388px\" \/><\/div>\n<\/div>\n<div class=\"is-divider divider clearfix\"><\/div>\n<p>By following a few simple steps you will receive stablecoins in your\u00a0<a href=\"https:\/\/www.bitnovo.com\/blog\/en\/types-of-wallet\/\">cryptocurrency wallet<\/a>.<\/p>\n<p>In short, remember that\u00a0<b>a stablecoin is a type of cryptocurrency that is tied to the price of a less volatile asset<\/b>, for example, the dollar.<\/p>\n<p>If you want to learn more about the crypto world you can find many interesting articles by browsing our blog.<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Tiempo de lectura:<\/span> <span class=\"rt-time\"> 3<\/span> <span class=\"rt-label rt-postfix\">minutos<\/span><\/span>Most of the cryptocurrencies were created with the purpose of being a medium of exchange and not simply a store of value. The problem is that due to their smalls market caps,\u00a0even the most popular cryptocurrencies tend to experience too much price fluctuation.\u00a0However, do you know what a stablecoin is? Typically, the smaller the Market [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":9295,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[185],"tags":[],"class_list":["post-9291","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-en"],"_links":{"self":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/9291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/comments?post=9291"}],"version-history":[{"count":0,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/posts\/9291\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media\/9295"}],"wp:attachment":[{"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/media?parent=9291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/categories?post=9291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitnovo.com\/blog\/wp-json\/wp\/v2\/tags?post=9291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}