What is a Stablecoin?

Purpose of Stablecoins

Firstly, the cryptocurrency community has a crazy amount of drive. One common theme amongst those who use and make cryptocurrency is the initiative to fix things that they find issues with. Lots of various types of cryptocurrency and coins have been made in attempts to improve flaws that programmers found with other cryptocurrencies.

Types of Stablecoins

Basically, stablecoins seek to decrease a wide range of value fluctuation by tying the coin’s value to more stable assets such as fiat (government-issued currencies). For example, some stablecoins peg their value to the US dollar. Whatever organization creates the coin does this by maintaining a reserve of said fiat currency to back the value of their stablecoin. This can also be done with assets like gold.

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