When many people think of cryptocurrency, they usually think of volatile digital currencies that can rise and fall within hours. While this is true, not all cryptocurrencies are like that. A group of cryptocurrencies called stablecoins are not that volatile. In fact, their relative stability earned them the name 'stablecoins.'

While tens of stablecoins are available today, this article will focus on USDC. USDC is a leading stablecoin and a household name in Web3. We take a look at what it is, what it is used for, and where you can buy USDC. 

What is USDC: Definition

USD Coin (USDC) is a dollar-backed cryptocurrency owned by an association of several crypto companies collectively called Circle. USDC is digital and is pegged to the American Dollar. This means that 1 USD=1 USDC, although this price could vary slightly around ± 0.01 in periods of high volatility.

USDC was first launched in 2018 by a consortium called CENTRE. Today, the association that manages the token is called Circle, which includes top crypto stakeholders like Coinbase and Bitmain. Since its launch, Circle has continuously worked on improving USDC by making it a stablecoin with "internet speed."

How Does USDC work?

Firstly, USDC tokens need to be issued. This is done majorly by Circle and Coinbase. Next, the tokens are created on Ethereum as ERC-20 tokens. After that, they are distributed for use on the blockchain.

The dollars backing USDC are held in physical reserves, so the money is not just pegged to imaginary money. The USDC in these reserves can be redeemed at any time for the same amount in dollars, making them a reliable means of payment.

Regularly, Circle works with third-party firms to ensure that the USDC in circulation matches what is in the reserves. This way, there is no falsification of records, and the coin remains stable.

Uses of USDC

Stablecoins like USDC are excellent for payment since they don't have the volatility of other classes of fellow cryptocurrency. But you can use USDC for a whole lot other than just payments.  Here are a few more:

• Store of value: 

If you don't want to hold local currency in your bank account, you can easily convert it to USDC with minimal fees. Most exchanges charge minimal fees for buying USDC, so you can buy and hold dollars in the form of USDC without having any physical dollars. In some countries with a high inflation rate, USDC could help curb inflation.

• Remittances:

With USD, local brands and companies can easily make international payments without worrying about excess fees or long wait times. USDC transactions usually take less than a minute, saving everyone time.

• Payment token: 

Because USDC is an open source software protocol, anyone can integrate its API into its platform or dApp and use it as a means of payment. By doing this, developers are making it easy to pay for in-app purchases with USDC, which is simpler and better.

• E-commerce

Some companies like Microsoft and ExpressVPN accept USDC payments directly. For some other companies like Amazon, you have to buy gift cards with your USDC and then go ahead to purchase whatever you want. It is possible to make purchases with USDC, and we might see more companies adopt it with time.

There are other uses of USDC, but these are the most popular ones. Other uses include staking and trading, just like with any other cryptocurrency, stablecoin or not.

Should you buy USDC?

With USDC being useful within and outside the crypto world, is it something you should buy? How can you make money with USDC? Well, USDC can be a good investment if you are into holding the dollar instead. 

It can add stability to your portfolio and is usually a 'safe haven' for crypto investors when the markets begin to tank. Buying USDC does not make you any money if you do not trade or put it into a staking program, so you might consider putting it to work as well. If you are unsure of buying USDC, start by buying it in small quantities. That way, you can get used to it and see if it fits your investment goals well. 

Where to Buy USDC 

USDC is a popular cryptocurrency, so it is available on almost all centralized and decentralized exchanges. Popular choices include Kraken, Binance, and Coinbase (a Circle member). 

If you prefer private transactions, go for a decentralized exchange like Uniswap or PancakeSwap. USDC can also be bought through peer-to-peer and over-the-counter methods. Just be careful to get a reliable platform/person to trade with.

Conclusion

USDC is a dollar-backed stablecoin issued by Circle that has broad uses globally. While it is cheaper to transfer money with USDC compared to USD, many people have not adopted crypto yet, so this could be one of the reasons USDC is not very popular.

It could be a good investment if you're interested in stability more than volatility, and can be bought on many exchanges. However, just before you buy USDC, do your research, as none of the information in this article is financial advice.

FAQs:

What wallets support USDC?

Many hot wallets support USDC. So, if you are buying on an exchange that has USDC, it's usually not a problem unless you require a separate wallet, like a cold wallet. A cold wallet that can store your USDC is Ledger.

Is USDC the same as USDT?

No, USDC and USDT are not the same. While both are dollar-backed stablecoins, they are issued by separate companies. Circle issues and manages USDC, while Tether is in charge of USDT. 

Why is USDC popular?

USDC is popular for a number of reasons. Firstly, it is a reputable company's product, making it easy for people to trust it. Also, many companies looking to adopt crypto for payments would naturally consider stablecoins like USDC first before other cryptocurrencies.

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If you're new to the crypto space, seek financial advice from a professional and don’t invest what you cannot afford to lose. This article is for educational purposes and is not financial advice.