What is USDC? How It Works and Steps for Buying the Stablecoin

What is USDC

Cryptocurrencies, such as ETH (Ethereum) and BTC (Bitcoin), demand a lot of attention in the crypto space, but only for a good reason.

Apart from Bitcoin and Ethereum, other digital assets, like USDC (USD Coin), have price stability.

What USDC Is

USDC (USD Coin) is basically a stablecoin pegged to the United States dollar. This means it performs the way dollars do.

It will also be right to say that the USD Coin is an alternative to other pegged stablecoins, such as TUSD (TrueUSD) and USDT (Tether).

Generally, USDC is one of the crypto projects which tokenizes USD and usually facilitates other uses on the public blockchains and the internet.

Integrating US dollars on blockchains and earning a yield from USDC allows seamless use of finances globally, bringing more stability to cryptocurrencies.

How It Works

How It Works

If you constantly pay attention to cryptocurrencies, you have probably realized that their prices usually fluctuate rapidly. This is perhaps among the reasons many individuals are not associated with cryptocurrency investment.

USDC being a stablecoin is a compromise that certain sectors in the crypto space propose. The basic idea behind USDC is that it is one of the digital currencies, which reduces volatility and at the same addresses issues with fiat currency, which makes things a little bit costlier for some individuals.

USDC becomes stable through the collateralization process. This means the coin has a reserve fund, which ensures the same amount of pegged assets backs up every USDC.

So in case, there are three million units of USDC pegged to dollars in circulation, $3M should be sitting in your bank account somewhere to back the coin up. Though it's not always the case.

Is USDC a Great Investment?

USDC, as one of the popular stablecoins, is not designed for people to invest in. If the coin works as it is supposed to, every USDC you buy will have the same value in two years and even seven years.

Although people don’t regard this stablecoin as an investment, it is a perfect option for individuals looking for a passive income. You may turn a yield of around 7% on USDC yearly through different lending programs. So you will be taking little risks for generous returns.

Steps for Buying USDC

Steps for Buying USDC

Like every beginner, it can be confusing to buy stablecoins, especially USDC. But with the right steps, like the following, you will successfully buy the stablecoin:

  • Open your online account: This can be through Coinbase. You just need to enter your email and create a strong password. With this trading account, you will easily convert your stablecoin into different cryptocurrencies with an online account.
  • Purchase a wallet: Avoid storing your USDC or other digital currencies on an exchange. This is because they are a target for many hackers. Instead, consider buying a dedicated or good wallet to store your coin.
  • Start trading: In order to trade, you will have to fund your online account. Connecting your trading account with your bank account should be simple.

Concluding Remarks!

Stablecoins, like USDC, should definitely have a special place in the world of cryptocurrency. That is because they offer a bridge between crypto and the real world of fiat, not to mention a storage place for traders and investors to temporarily escape the crypto market's volatility.

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