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What Is USD Coin (USDC)? What Every Crypto Investor Should Know
The world has changed a lot over the past few years due to the advancement of technology. Trade is no longer carried out the same way it was in ancient times. Barter trade is rarely used, and even though cash is, there are other means that have overpowered it including the use of USD Coin.
As a popular type of cryptocurrency, everyone is supposed to know what USD Coin is, how it works, who runs it, how it is used, the advantages and disadvantages, how and where to buy it, and much more. This is the reason why this article has been written, to answer all these questions.
What Is USD Coin?
USD Coin, also known as USDC, is simply a stablecoin whose price is attached to the US dollar. Whenever a person earns USDC, they get the chance to transfer any money they have in USDC at a faster rate around the globe.
The special thing about USD Coin is that it aims to stabilize to equal the price of one US dollar for every token. Not only is USD Coin a stablecoin, but it is also an ERC-20 token, which is a cryptocurrency existing in digital contracts that are built in the Ethereum network.
Who Runs USD Coin?
A group of organizations called Centre does. This consortium owns and runs all projects concerning USD Coin including funding. This group of companies allows the users to use their online platforms for investing in stablecoins.
Bitmain, which is a large Bitcoin mining company that also owns Coinbase and other crypto exchange platforms, has a big share in USDC investment. Many other organizations have invested in the crypto together with individuals across the world. Since its introduction in 2018, its base has grown tremendously.
How Does USD Coin Work?
Simply put, it runs on Ethereum technology, meaning the Ethereum blockchain is in charge of the hard work. But that does not mean that Centre is not involved, because it is. All the technical details about how to earn USDC are covered by Centre. They have put their technical team behind everything to ensure smooth operation, safety measures, and growth.
New coins are minted by an affiliate system run by Centre. Once they are authorized, any person can transfer their USDC to accredited institutions, and on the other hand, the institutions can mint them. This is how you earn USDC.
Advantages of USDC
It is important to understand that the value of the USD Coin holds constant. And because of this, it has many uses like paying employees or giving to charity. The latter has become very common especially when wealthy people want to remain discreet in their activities.
Traders around the world use this coin as a type of investment to earn USDC interest. All you need to do is accumulate a lot of these digital coins in your safe digital wallet. The interest comes from lending the USDC to investors, which is regulated by Centre. Interest is earned annually, and those with many coins can earn good interest.
It reduces the time taken to transact money internationally. Generally, blockchain technology has become quite fast especially when using superfast internet. USD Coin also reduces the costs of transferring money worldwide because of this. Numerous transactions can be completed using the same resources. Hence, the charges are relatively low.
Another advantage of USDC is that it is more reliable compared to other stablecoins. The project has strong support from the developers. Therefore, it is believed that it will actively grow in the future.
Disadvantages of USDC
The market has many stablecoins that are similar to USDC, and therefore, there is high competition. This stablecoin is still new, and many investors are not sure how it will behave in the long-term future.
Investors are still uncertain about what will happen to the all-new USDC, even with a lot of information pointing out that it will likely continue to grow. Everyone can only wait and watch what will happen.
How and Where to Buy USDC
You can earn USDC by purchasing directly from an issuer or from a reputable exchange. When you earn USDC from an exchange, then you will not acquire your token directly from an issuer, but instead, you get it from a third-party broker. Both ways are acceptable and reliable. The third-party brokers are authorized by an issuer, which is why you should always use a trustworthy broker.
You need a digital wallet that supports ERC-20 technology to store your USDC. From here, you can either keep them as an investment, use them to buy goods and services where they are accepted, or do what many crypto investors do, trade.
Risks to Avoid When Dealing with USDC
There have been claims of the freezing of accounts with hundreds of thousands worth of stablecoins by Centre due to safety reasons. From this, the crypto community has promised to employ more scrutiny to ensure that all safety measures are followed by the users. To avoid blacklisting, users are required to follow the precautions used by crypto experts. They include but are not limited to these essential recommendations.
· Use a reliable exchange platform – When buying or selling your USDC, plan to use cryptocurrency exchanges with a good reputation on matters related to safety and security. This will avoid suspicion of fraud and the blacklisting of your account.
· Use a safe computer and internet connection – Hackers are all over and looking for opportunities to strike and steal cryptocurrencies. Therefore, your computer should be protected by strong antivirus software. Additionally, avoid using unprotected public Wi-Fi, where you can be targeted easily.
· Protect your digital wallet – Do you know that even people who are close to you can steal your digital wallet credentials and steal all your USDC? Well, you should keep your digital wallet address and key safe to protect them from being stolen.
· Trade carefully – As an investor, you know that you cannot put all your eggs in one basket. When buying USDC, buy the coins at different times to increase the chances of getting the best deals. Also, sell them at different times to maximize the profit. After all, these stablecoins continue to fluctuate in value.
USDC has a high chance of bringing analogs into the crypto market because it holds all the benefits of blockchain. Hopefully, you have now understood everything about USD Coin. If you are a crypto investor, then try out this digital coin, and you will not regret it.
This article does not necessarily reflect the opinions of the editors or the management of EconoTimes