USD Coin Explained

USD Coin (USDC) is a new stable coin tied to the value of US dollar. It was made available on September 26, 2018. The currency connects the existing financial system and the open financial system enabled by blockchain. USD Coin is a popular alternative among cryptocurrency investors who wish to avoid the volatility and price risk of currencies such as Bitcoin and Ethereum. It is available on both controlled and decentralized exchanges (DEXs). Stable coins can be ideal for payments by traders who want to gain profits from trading in higher-volatility digital assets into lower volatility digital assets; without exiting to fiat.

Unlike US dollars, USD Coin does not require a bank account. Furthermore, it is not necessary for you to reside in a particular geographical area to acquire USD Coins. USDC is worldwide accepted.

How is the USD Coin Produced?

US Dollar Coins are not mined like many other cryptocurrencies.The process of transforming US currency into USDC tokens is known as tokenization.

Converting USD to USDC is a three-step process:

1. First, a user transfers USD to the token issuer's bank account.
2. Using a USDC smart contract, the issuer generates an equivalent amount of USDC.
3. Finally, the newly issued USDC is given to the user, while the replacement US dollars are kept in reserve.

How Long Does it Take to Complete a USDC Transaction?

Transactions made to your USDC Savings Account will be recorded to the Ethereum blockchain after 15 confirmations. This procedure takes roughly 4 minutes on average, depending on the transaction fee chosen by the sender and the Ethereum network traffic. That is why USD Coin, in a nutshell, is a service that tokenizes US dollars and allows them to be on the Internet and public blockchains.

What are Wallets for USD Coins?

Before we start talking about specific wallets, it's essential to understand the distinction between hot and cold wallets. Every form of cryptocurrency wallet fits into one of these two groups.

Cold wallets are not present on the Internet, but hot wallets are.

Because hot wallets are on the Internet, cash held in them is more accessible for purposes like day-to-day trade or payments. They are also famous for their ease of use. However, because they are on the world wide web, they are vulnerable to Internet threats like hacking and viruses. On the other hand, cold wallets are a great option if you plan to include cryptocurrency in your investing portfolio. They are more secure and not prone to hacks because they are not connected to the internet.

Hot Wallets for USD Coin?

Exchange wallets, online wallets, and software wallets are examples of hot wallets.

A hot wallet is an online cryptocurrency wallet that may operate on many blockchains and facilitate various currencies between the owner and end-users.

One of the most significant bugs confronting a hot wallet is the security breach of private keys kept on the Internet and in the wallet's browser.

To deter cybersecurity dangers, users of hot wallets should retain a modest amount of their coin holdings on such sites. Best examples for Hot wallets for USD Coin are Desktop wallets like MetaMask, Exodus, and Electrum. For increased protection, several of these blockchain wallets have cold storage alternatives.

Cold Wallets for USD Coin?

A Cold wallet goes a step further in terms of security by allowing access to your cryptos held on a piece of hardware. That is why Cold wallets are a safer alternative for storing your USD Coin. The wallet may be linked to a computer by USB or another interface to allow transfers and transactions, although it is mainly used to retain cryptocurrency in cold storage. That's how cold wallets provide the maximum protection, but you must keep track of your security keys (like a private password only you know). Ledger and Trezor are two well-known hardware wallets manufacturers, so we suggest trying one of those for keeping your USD Coin.

Pros and Cons for USD Coins?

While stable coins such as USDC have lower price volatility than other cryptocurrencies, which is their major advantage- they may be subject to additional regulation by authority bodies like the United States Securities and Exchange Commission. Therefore, before acquiring USDC, you should be aware of the pros and cons regarding USD Coins.

Advantages:

1. Simple to transfer- Regardless of the time of day, two parties with an Ethereum wallet may transact USDC in seconds. This implies that even if someone needs to transfer a massive payment to a supplier in another country, the cash will arrive in seconds, and the transaction will be as simple as purchasing goods from an e-commerce site. Wire transfers, in contrast, can take anywhere from 1 to 3 days.
2. Low price volatility- This is a feature shared by all Stablecoins. Some individuals favor stablecoins because they allow them to participate in the crypto ecosystem without worrying about enormous volatility.
3. USDC protects against inflation.
4. Integration with dApps- The crypto dApps, blockchain-based games, and exchanges ecosystem have been thriving for several years. Because USDC is an ERC-20 token, it will be accepted by any program that supports this standard. This enables USDC users to purchase a broad range of crypto-verse things, such as blockchain-based games and collectibles like digital artwork.

Disadvantages

1. There is no price increase.
2. The reserve asset mix is not entirely revealed.
3. Not immune to the rise in the value of the US currency

Why Should You Invest in USDC?

USDC is among the top-15 coins across all exchanges, and it has a total supply of $26.8 billion (up from $518 million at the start of 2020) and a 23 percent market share among all stable coins. A stable cryptocurrency is still decentralized, which means it is not subject to the laws and restrictions of a centralized system. That fact provides possibilities such as faster money transfers, access to financial services without apps, keeping financial data private, and avoiding financial service costs. So it's quickly become one of the most valuable currencies, and it appears to be gaining popularity.

How to Buy USD Coins?

To purchase USDC, complete these steps:

1. Find a USDC-trading exchange. Many exchanges provide USDC trading pairs against Bitcoin and other cryptocurrencies.
2. Register for an account on the exchange.
3. Add money to your account. Depositing cryptocurrency can be faster than depositing fiat cash such as US dollars.
4. Convert the currency you used to finance your account into USDC.

USD Coin (USDC) is available for purchase on the following exchanges:

• Binance (paired with BTC, BNB).
• Poloniex (paired with BTC, ETH, XRP, BHC, STR, LTC, ZEC, XMR, DOGE).
• Pro Coinbase (paired with BTC, ETH).
• Coinbase (in conjunction with CoinEx) (paired with USDT).
• OKEx (paired with BTC, USDT).
• Kucoin (paired with BTC, ETH, USDT).
• LATOKEN (paired with BTC, ETH).
• Crex24 (paired with USD).

When you compare the options in the list above, you may pick the qualities you desire, such as low costs, convenience of use, or 24-hour customer support.