Crypto Academy Week 7 - Homework Post for @yohan2on on Stable Coin USD (USDC) by @salmanwains

First of all I'm really thankful to @steemitblog , @steemcurator01, @steemcurator02 and all the professors of SteemitCryptoAcademy specially @yohan2on . We are learning a lot from these lessons started by the Steemit Crypto Academy Team.

In this week 7 lecture of professor @yohan2on, we got to know about Stable Coins. And our task for week 7 is...

Homework task: Write about any one of the following Stable coins
USD Coin (USDC)
TrueUSD (TUSD)
Paxos Standard (PAX)
Digix (DGX)

So today, I will write about USD coin (USDC). First, have a look at Stable coins, what they are and why they called stable coins?

Stable coins are those coins whose value remain stable at most of the time. Actually, Stable coins are cryptocurrency assets that are supposed to be stable in nature and are an alternate of other fiat currencies. USDC, USDT and TUSD are all alternate of US$ . These stable coins can only be traded in cryptocurrency blockchain and their price is fixed. Below are some examples Stable coins

• USD Coin (USDC)

• TrueUSD (TUSD)

• Tether (USDT)

• Paxos Standard (PAX)

• Digix (DGX)

USDC, is an Ethereum-based stable coin launched in September, 2018 and is directly linked with US$, so it's base price is fixed to 1 US Dollar. (source)

USD coin is designed to ease out the headache of carrying money around as it serves as an alternative to USD and it also help in tokenizing the US dollars and helps carrying it to online transaction on the internet.

Who developed USD Coin?

USD Coin is developed by the Centre consortium, a partnership between Circle and Coinbase. The technology and governing framework are developed by Centre, while Circle and Coinbase are the first commercial issuers of USDC. Circle was founded in 2013 by the entrepreneurs Jeremy Allaire and Sean Neville.

USD Coin (USDC) Price is stable

As you can see in the below image or graph that price of USDC is not changing much. The lowest price of USDC in last 1 year is $0.991660 and that was also in January 4 2021. Whereas, the highest price of USDC in last One year is $1.002

So now, we have clear Idea that value of Stable Coins like USDC do not change most of the times and these coins are purely designed as an alternative of fiat currencies or in the case of USD Coin, it is an alternative of US Dollar.

Tokenization or How to get USDC or USD Coin through US Dollars

Converting USD's to USDC is called tokenization and it's a Three step process which is given below.

• Users send their USD's to the token issuer authority or in the issuer's bank account

• The issuing authority uses a USD smart contract to create equivalent USDC

• The USDC is sent to the buyer while the USD is kept as reserve. (source)

(Reverse)- How to get USD or US Dollars through USDC Coins

• It all starts by sending a request to the USDC issuing authority that you want to redeem your USDC for equivalent USD.

• The issuing authority then sends the request for transecting the equivalent amount to the smart contract against your USDC.

• After that the smart contract takes the money out of the reserves and transfers it to the account of issuing authority which in turn is transferred to your account. (source)

PROS	CONS
Stable linked with US$	Trust issue with the 3'rd party
Can be processed with any commodity i.e. gold, crypto, US$	Prone of failure because of their dependency on the 3'rd party
Money tokenization	Value dependent on underlying commodity
Ease of transfer from underlying commodity to USDC	Lack of privacy as it requires KYC
Easy to use on web based platforms	Avoid Hyper inflation

Every asset is kept with an end purpose of using it for some kind of investment and that investment may shape in form of using the asset to buy another asset or investing it as a capital in the shares market.

And, If we look at the stable coins like USDC as an option for investment then it may not yield as bigger rewards because Stable Coins are not well suited for investments, e.g. if you invest 1000 USD in Circle, where you buy and hold 1000 USDC tokens for 3 years, this cannot bring any profit for the investor as stable coins have a fixed price and their price will remain fix even after 3 years.

By going through this week task, we have come to know about

• Stable Coins

• Origin of the USD Coin

• The parent Company of USD Coin

• USDC relationship with US dollar

• How one can get USD coin

• How one can get US Dollars through USDC

• Benefits and drawbacks of having USDC

USD coin is one of the most popular coin among all of the stable coins and it is a safe investing opportunity for the people who are risk avoiders because their price doesn't fluctuate like other cryptocurrencies such as Bitcoin & Steem etc.

Thank you all for reading post. Now, I would like to mention Professor @yohan2on to check my entry for homework week 7 Task.