USD Coin Cryptocurrency is Better than Dogecoin

What is USD Coin?

USD Coin, or USDC, is an electronic fiat-backed “stablecoin.” That means you can store US dollars in a digital form in a blockchain-based account, with low volatility against the dollar. It’s a smart contract-based token created by the company Circle using blockchain technology and the Ethereum network. USDC is meant to be a bridge between the crypto world and the regular financial system. You can deposit fiat money into a USDC account at Circle or another partner institution, and the company issues you the equivalent amount of USDC tokens. It’s one of many “stablecoins” that have emerged in recent months as a way to bring more stability to cryptocurrencies.

How Does USD Coin Work?

USD Coin is an asset-backed token on the Ethereum blockchain. It's similar to Tether, but you can redeem your tokens for regular dollars. The goal of this project is to make an ERC-20 token that can be exchanged as a digital version of the US dollar. USD Coin is a fully collateralized US dollar-backed ERC-20 token. Investors purchase USDC by locking up USD in a verified account, with a 1:1 ratio. That means $100 in a bank account will generate one USDC. The smart contract will also generate USDC if you have USDC but don’t have $100 in the bank. You can redeem your tokens for $100 at any time, and the contract will return your USD.

Pros of USD Coin

- Fully collateralized: Investors lock up USD in a verified account, with a 1:1 ratio. That means $100 in a bank account will generate one USDC. The smart contract will also generate USDC if you have USDC but don’t have $100 in the bank. You can redeem your tokens for $100 at any time, and the contract will return your USD.

- Transparent auditing: All of the above is fully auditable, meaning anyone can check the state of the system to verify that it’s adhering to the correct rules.

- No counterparty risk: Investors are not relying on someone else to keep their word. The system doesn’t rely on a single company to be solvent and keep its promises. The system is decentralized and open to anyone who wants to participate.

- Low transaction fees: The platform is extremely cheap to use, with low transaction fees.

Cons of USD Coin

- Not suitable for long-term investments: You can only use the USDC tokens to change back into fiat once per month. This might not be ideal if you plan to keep investing in the token, because you’ll have to sell it and buy it back every month.

- Not available to residents of some states: The USDC is only available to residents of California, Delaware, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New York, Nevada, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington, and Wisconsin.

Who Should Buy USD Coins?

Anyone who wants to access the benefits of the USD Coin network. You can use the same infrastructure and features available to the native USD Coin network. You can also redeem your tokens for regular USD at any time. The USD Coin network is fully functional and has been used by select partners for some time. More companies are adopting the network, and it’s poised for significant growth. If you want to capitalize on the benefits of this network, it’s best to buy the native token. If you don’t want to use the native token, you’re better off with Tether. We’ll cover that in the next section.

Final Words: Which One Is Better?

Overall, these two tokens are very similar. They both have a lot of promise and use a smart contract-based system to ensure smooth operation. Both are fully collateralized, meaning they’re backed by real assets like USD. Ultimately, you need to decide which token is best for you. It’s important to understand their differences and decide whether one makes more sense than the other. In the end, these are both excellent coins and have a lot to offer. They are highly liquid, simple to use, and have low transaction fees. They’re great for everyday transactions and long-term investments.