Before the emergence of stablecoins (such as USDT, USDC, etc.), cryptocurrency was bought and sold directly for fiat money (dollars, euros, rubles, etc.) or through barter schemes between different crypto assets. Here are the main methods:
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1. Fiat → Cryptocurrency
• People used bank transfers, credit cards, or even cash to buy BTC or ETH on centralized exchanges (e.g., Mt. Gox, LocalBitcoins, Bitstamp).
• Problem: volatility. For example, you sent $1000, and while the money was on its way, the BTC rate changed — and you receive less or more than you expected.
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2. P2P exchange
• Through forums and platforms (Reddit, Bitcointalk, LocalBitcoins), people negotiated directly:
"You give me $500 in cash — I give you 0.5 BTC."
• Such transactions were accompanied by the risk of fraud and lack of guarantees.
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3. Fiat deposit on the exchange + crypto
• A person would deposit dollars/euros on the exchange and then buy the desired asset there.
• Inconvenience: there was no stable "digital dollar," and if you wanted to convert to “cash,” you had to transfer the money back to the bank (which took time and wasn't always accessible).
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4. Crypto to crypto
• Already existing cryptocurrencies (e.g., Litecoin, Ethereum) were exchanged among themselves.
• Example: if you held BTC but wanted to buy ETH — you would do a cross-swap, but without a "anchor" in the form of a stablecoin, everything was extremely unstable.
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Why did stablecoins change everything?
• They provided a stable digital unit of account, independent of banks.
• Allowed for quick exit from a position into “cash” without reverting to fiat.
• Simplified DeFi, trading, and storage.
