Steemit Crypto Academy Week 7//Stable coin (2) // Homework submitted to @yohan2on

Thank you Prof. @yohan2on for another week lecture on Stable coin.

Introduction
It is true that stable coins have proved to be very influential in cryptocurrency adoption, but more analysis should be carried out on this coin to know what the future holds. As stated in lecturer 6,we say a stable coin is coin whose price is pegged to that of a fiat currency, e.g the US dollars.

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According to your homework task I will be discussing about the USD coin (USDC)

What is the USD coin?
Usdc coin like other stable coin is pegged same value with a fiat currency, e.g dollar. For more emphasis, Usdc is a an Etherum based token (ERC-20), issued on the Ethereum blockchain, fully collaterised, backed by the US dollar, launched in 2018 and was masterminded by Coinbase and Circle exchanges respectively. It turns the dollar into a token making it easier to transfer and use.

How are they created
Exchanges trading USD coin are approved to do so. When a buyer orders a purchase of USDC token via an approved dealer or issuer, he pays in US dollars, for every dollar received, the issuer engages an ERC-20 smart contract with generates Usdc equivalent of the value. The token is then collected and handed over to the buyer. USD deposited by the issuer is kept in the reserve as collateral.

These coins are fully backed by the USD in the ration of 1:1,the coins are also redeemable incase they are not totally spent can be returned back to the issuer who inturn receive the coins and returns an equivalent fiat. The redeemed coin are then burnt forever.

Unlike other stable coins, in Usdc the issuer must provide proof that they are of high standard and can be mandated to distribute cryptocurrency even as they are being regulated and audited. This secures the holding to a 1:1 ration. Issuers from time to time must provide accurate record of Usdc holding which can be published and viewed any time needed.

What are its Advantages and Disadvantages
Usdc has some series of advantages as well as disadvantages. First we look at advantages.

Advantages
1)Usdc is a stable coin and it is able to tackle the problem of volatility of cryptocurrency bringing stability to the system. Once your cryptocurrency is changed to Usdc, it becomes the same value as 1 USD which we agree is not usually affected by price fluctuations and cryptocurrency coins are stable.

2)It gives you the leverage to tokenized your cryptocurrency asset making it easy to utilize, or stored for future use. It also gives you opportunity to transfer USD around the world.

3)Usdc is considered to be more reliable than its stable coin cointerparts.

4)Usdc has being able to win the heart of numerous sponsors like bitmart, etc.

Disadvantages
The lecture today starts the problem faced by stablecoins, Tether and the others, well Usdc is not the only stablecoin and is also prone to this problems.

There is serious competition as in the cryptocurrency market and Usdc must have a more advanced advantages to better than the other stablecoin.

Conclusion
Stablecoins are important part of cryptocurrency, there are various stablecoins in the system now and competition will definitely arise. Anything could happen in crypto and whether or note cryptocurrency will dominate finance can not be ascertained the future is stablecoins.

Thank you sir

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