The Holy Grail Of Cryptocurrency
A “stable coin” is a cryptocurrency that is pegged to another stable asset, like gold or the U.S. dollar. It’s a currency that is global, but is not tied to a central bank and has low volatility. This allows for practical usage of using cryptocurrency like paying for things every single day.
Coins like Bitcoin and Ethereum and highly volatile. On any given day, it is common to see an increase to 10-20% or even a decrease. That makes using most cryptocurrencies for daily transactions inconvenient. Imagine paying $5 for your flat white (my coffee of choice) today and finding out tomorrow that it should have been $4. Price changes like that are shocking for a consumer. The adoption of stable coins will be be a catalyst to the new decentralized internet becoming mainstream.
There are various stablecoins available, but only one is decentralized at the moment:
Maker is a decentralized autonomous organization that is pegged against the U.S. dollar, but is completely backed by ETH. Their stable coin is Dai and each one is worth $1 USD. Stability is maintained through an autonomous system of smart contracts. To receive Dai, you send your tokens to the Maker platform to lock those tokens up.
Advantages: One of the first in the space (First Mover Advantage), backed by ETH (which is on the blockchain and therefore transparent, unlike Tether)
Disadvantages: Highly complex, slow-moving
More Details here: Revisiting stablecoins