Crypto Stablecoins (USDC, BUSD, USDT) (1 Viewer)

[wuffle]

Greetings PCF,

I'll like to take this opportunity to discuss about crypto stablecoins. Stablecoins are designed to be valued at $1, and they are backed by assets of equivalent value or more. The 3 biggest stablecoins by marketcap are USDT ($66b), USDC ($43b) and BUSD ($16b). In this post, I'll focus on USDC as the Tiger Sale gives significant benefits if you pay by USDC.

What is USDC?
USD Coin (USDC) is a digital currency that is fully backed by U.S. dollar assets and issued by Circle. Every time you deposit $1 with them, 1 USDC is minted on the blockchain. Redemption works in the opposite - 1 USDC is burned for each $1 redeemed.

How can I trust USDC?
Circle publishes a transparency report each month, and most of their holdings are in short term US treasury securities and cash (https://www.circle.com/en/transparency#stability). For the supply of USDC, we can easily check them on block explorers. For example, we can see that there are around $40b worth of USDC on the Ethereum chain (https://etherscan.io/token/0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48). The remaining $3b of USDC are in other blockchains like Avalanche, Solana, Algorand etc.

How do I get(mint) USDC or withdraw(burn) USDC?
Personally, I have a retail account with Circle so I can deposit USD and get USDC, and withdraw USD to my bank account directly with Circle. Another alternative will be Coinbase, but Coinbase doesn't have deposit/withdraw function for SG users so I am not sure of the process exactly. Perhaps the others who use Coinbase can chip in here.

Generally there are 2 places where you can store your USDC - custodial (an exchange like Coinbase, Gemini or Binance) or non-custodial (your own wallet where you own the private keys).

Advantages of using USDC
Cheap and fast. Transferring USDC to another address costs $2 or less (in ETH terms), and it's sent and confirmed in less than 3min. No chargeback or funny business after that. (I don't have a Coinbase account, but I believe internal transfer between Coinbase addresses is free and instant, I'll leave it for the US Coinbase users to comment on this).



I am no crypto expert and still learning too, just taking this chance to open up a discussion to facilitate alternative payments other than Paypal/Venmo. Cheers

 

[Carnth]

There's just a couple of things I want to sum up from @wuffle's post above. I'll give it a USA perspective too.

Stablecoins are designed to be valued at $1, and they are backed by assets of equivalent value or more.

Not all stable coins are. But the three listed here are pledged by their respective companies to be backed by actual dollar assets.

The 3 biggest stablecoins by marketcap are USDT ($66b), USDC ($43b) and BUSD ($16b).

What is USDC?
USD Coin (USDC) is a digital currency that is fully backed by U.S. dollar assets and issued by Circle.

USDC wasfounded by Centre. A joint venture of Circle and Coinbase.
https://www.centre.io/usdc

If you're a beginner, you don't really need to know that... Or the following... (This next section can be skipped, but it's interesting info for people more interested in how USDC functions.)

Every time you deposit $1 with them, 1 USDC is minted on the blockchain. Redemption works in the opposite - 1 USDC is burned for each $1 redeemed.

How can I trust USDC?
Circle publishes a transparency report each month, and most of their holdings are in short term US treasury securities and cash (https://www.circle.com/en/transparency#stability). For the supply of USDC, we can easily check them on block explorers. For example, we can see that there are around $40b worth of USDC on the Ethereum chain (https://etherscan.io/token/0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48). The remaining $3b of USDC are in other blockchains like Avalanche, Solana, Algorand etc.

The above is fantastic info, but is beyond what you need to know as a beginner.

Well, as a beginner, what do I need to know?
Two things: how to get USDC, and how to send it.

How do I get(mint) USDC or withdraw(burn) USDC?
Personally, I have a retail account with Circle so I can deposit USD and get USDC, and withdraw USD to my bank account directly with Circle. Another alternative will be Coinbase, but Coinbase doesn't have deposit/withdraw function for SG users so I am not sure of the process exactly. Perhaps the others who use Coinbase can chip in here.

In the USA, you can buy and sell USDC 1:1 for US dollars for free at Coinbase, when funding your purchase with an ACH bank transfer.

Just open an account at Coinbase. com (I left this link broken on purpose, just type it manually in your browser.)
Coinbase is a financial company, so they require your ID and bank account info to complete your account setup.

After that's done, click the BUY button in the top right, change the selection from "buy Bitcoin" to "buy USDC" and use you bank account to fund your purchase.
It's ok to test with a small amount for your first purchase. I recommend buying $5 to $10 of USDC to get your feet wet.

After you buy USDC, it will remain in your Coinbase account until you send it. Sending any coin to any network address requires you to pay a transfer fee.

Advantages of using USDC
Cheap and fast. Transferring USDC to another address costs $2 or less (in ETH terms), and it's sent and confirmed in less than 3min.

This fee is also pretty much a flat fee. When sending 5 USDC, or 500, or 5,000,000, the transfer fee is the same.

No chargeback or funny business after that.

This is true. Not only is it free to receive USDC (you only pay a fee when sending it), but there is no such thing as a reversal of payment, or chargeback.
So, here is this...
Warning: sending virtual currency is an irreversible action. The only way to get your currency back from someone is if they manually send it back to your own address. So only send to people you trust. If you send virtual currency to an address that nobody owns, it is essentially lost for all time.

ProTip: never manually type in virtual currency addresses. They are just too long and complicated. Always copy and paste in the address, and then check the first 5 digits and last 5 digits to make sure it is pasted in correctly.

(I don't have a Coinbase account, but I believe internal transfer between Coinbase addresses is free and instant, I'll leave it for the US Coinbase users to comment on this).

This is true, if you send from your Coinbase account to another Coinbase user by using their email address (not the network address) your transfer is free. Since they just make a DB update to their own accounting database and don't send on the network, no transfer fee is paid, so they pass the savings on to you.

If anyone setup a new Coinbase account and wants to test sending USDC back and forth, PM me for my Coinbase account email address.

 

[tabletalker7]

OK look I am a complete moron when it comes to crypto but every time I try to wrap my head around this stuff I always have the same two questions. Maybe you can help me answer them here.

USD Coin (USDC) is a digital currency that is fully backed by U.S. dollar assets and issued by Circle. Every time you deposit $1 with them, 1 USDC is minted on the blockchain. Redemption works in the opposite - 1 USDC is burned for each $1 redeemed.

1. So, a USDC is equal to 1 American dollar. Why invest in this then and not just get American dollars? A one for one exchange to exchange back at one for one sounds like nothing happens so why bother?

Cheap and fast. Transferring USDC to another address costs $2 or less (in ETH terms), and it's sent and confirmed in less than 3min. No chargeback or funny business after that. (I don't have a Coinbase account, but I believe internal transfer between Coinbase addresses is free and instant, I'll leave it for the US Coinbase users to comment on this).

2. So after getting your coins and moving them where you want them, you have now spent more than the 1 American dollar per USDC per each coin. But when you cash out these coins you get 1 American dollar per coin. Doesn't this turn the whole operation in a giant ponzi scheme in the likes of FTX? Now look I know FTX was equal parts stupidity and negligence, but it was also a giant ponzi scheme where people at the very top pocketed tons of cash while everyone else lost their collective backsides. How is this any different?

 

[HaRDHouSeiNC]

Yes. Awesome topic and I’d fully support going all USDC for PCF transactions

 

[Carnth]

1. So, a USDC is equal to 1 American dollar. Why invest in this then and not just get American dollars? A one for one exchange to exchange back at one for one sounds like nothing happens so why bother?

For most people in the USA, sending money to someone else in the USA is no problem using "real American dollars."

Have you sent money to someone in Canada, or Europe? PayPal charges like five to six bucks even when using friends and family. Why?
I'd rather pay the $2 USDC transfer fee.

Ever try sending more than 10k? You'll run into a huge number of problems, and more fees.

What about someone with no bank account?

These are a few examples of issues that virtual currencies solve. The "no bank account" one is most likely very rare for people on this forum, but foreign transactions are hella easier, and hella cheaper.

2. So after getting your coins and moving them where you want them, you have now spent more than the 1 American dollar per USDC per each coin.

Correct, you pay a transfer fee to send USDC to someone else.

But when you cash out these coins you get 1 American dollar per coin.

Yes, cash out one USDC for one US dollar at Circle or Coinbase.

Doesn't this turn the whole operation in a giant ponzi scheme in the likes of FTX?

FTX is an exchange, not a virtual currency. I'll get to that later.

But USDC works similar to cash in this example:

Say you owe your friend some cash. You go to the closest ATM, pay the ATM fee, withdraw cash, give it to your friend. Done.

Now your friend is in Europe, you're in USA.
Go to Coinbase, buy USDC, send to friend, pay transfer fee. Done. No transatlantic fight necessary!

In my ATM example, when there's a withdraw fee, you pay like $103 for $100. Is this a Ponzi?

Now look I know FTX was equal parts stupidity and negligence, but it was also a giant ponzi scheme where people at the very top pocketed tons of cash while everyone else lost their collective backsides. How is this any different?

FTX was an exchange run by someone who thought they knew what they were doing. Illegally took people's deposits, and invested in highly unstable things and lost... lost everyone's money.

Let me check something.... Year 2008.
Big banks and hedge funds run by people who thought they knew what they were doing, legally took people's deposits and invested in highly unstable things and lost. Government swooped in, printed money, and saved everyone's deposits. (Banks to big to fail)
Later that year, being disgusted that banks would do such a thing, a computer programmer (code named Satoshi) creates a virtual currency that doesn't need banks or governments to run. It runs on internet connected devices. This virtual currency is released in 2009.

Holy shit, we've come full circle.

Getting back to ponzi accusations... You have every right to not trust the crypto exchanges. People with advanced crypto skillz withdraw their funds from the exchange immediately and hold their currency in their own secure digital wallets. This would have saved everyone at FTX if everyone would withdraw their funds immediately. But most newbs don't know that you're supposed to do this, let alone how to do it.

But what about USDC?
It has value because, Circle and Coinbase say it does, and they promise to always pay 1 real American dollar for 1 USDC. But if you don't believe in circle/Coinbase or you don't trust them, then USDC has no value for you.

And that's ok. You can still use other virtual currencies that don't use companies to back the value.... These are called decentralized currencies. Like Ethereum, Bitcoin, Litecoin, etc.

 

[yeahfkyeah]

1. So, a USDC is equal to 1 American dollar. Why invest in this then and not just get American dollars? A one for one exchange to exchange back at one for one sounds like nothing happens so why bother?

I wouldn't think of USDC as an investment. It's great for payments, or as a store of value from a more volatile crypto while you expect it to lose value.

I'll also offer a warning:
NOT YOUR KEYS NOT YOUR MONEY!

If you plan to hold any USDC for a while (or any crypto) do NOT leave it on coinbase or another exchange. They control that money and not you... great for payments, but bad for storage. This is how so many people got screwed by FTX.

It needs to be in a wallet which you control the keys to. I would recommend using a hardware wallet, but many good free software wallets exist.

 

[waddadonk]

It needs to be in a wallet which you control the keys to. I would recommend using a hardware wallet, but many good free software wallets exist.

I can't stress enough how cautious you need to be with your own wallet. Once you become more active in crypto, you will encounter many things that try to take your money. As said earlier, transactions are not reversible, so once you send a token it's gone.

Most self-custody wallets come in the form of a Chrome extension or phone app - MetaMask, Rainbow, Coinbase Wallet, Trust Wallet are a few popular ones. You should be careful on whatever device you install this on. You will be given a secret 12 or 24 word "seed phrase" to create your unique wallet. Never ever store this phrase digitally. Don't send it in an email, don't save it to a text document, no Google drive. Once someone else has your seed phrase, they have control of your assets. Write it down, or stamp them into metal, and store it in a fireproof safe.

As I keep saying, be cautious and skeptical. If you get an email from one of these self custody wallets, assume it's a phishing scam. If you go to a website and it pops up the extension asking you to transact, verify it's doing something you intended it to do. "Do I want to approve my tokens to be transferred around by this site?" If a pop up asks you to type your seed phrase in, big huge giant red flag.

Now when do we get to the Pudgy Penguins that @wuffle has as his avatar

 

[Mike mac]

what are your thoughts about using xumm wallet ?

 

[fishsaybloop]

Perhaps to use an analogy that we’re familiar with might be to think of stablecoins/USDC as a poker chip in the world of crypto. Both are dollar backed tokens that simplify the flow of money.

Casino
- USD 1 = $1 chip (+ ATM fees)
- Chips are ‘secure’ so bets go faster without the dealer verifying bank notes every time
- Casino takes a rake to cover its costs

Crypto
- USD 1 = 1 USDC (+ fees if any)
- USDC is secured on the blockchain that allows fast transactions without going via banks / intermediaries
- Blockchain takes a transaction fee to ‘pay’ people around the world helping to validate each transaction

This is just a simple illustration that might help visualize how this works. The other posts cover the benefits and risks much better.

Just as a reference, Transferwise would cost ~$30 in fees and 24-48hrs to transfer USD 5k.
Compared to a few dollars in minutes.

 

[HaRDHouSeiNC]

Also, there’s another reason here why a stable coinbwallet is so good for small sales like this site.
Some users in countries that don’t support apps like cash app or Zelle or other payment processors can’t take advantage of fee-less payments, so a USDC wallet and a small network fee is a great option

 

[kk405]

Thank you @wuffle @Carnth and everyone else who is helping out with this topic... but, everyone.... please let's NOT turn this into a crypto thread... I believe there is another one here somewhere and we can always start others... crypto and tech jargons will make 90%+ of PCFers run away from this very quickly and they won't even give it a try.

The focus of this thread should be how to slowly get people to try USDC and make it easy for them to do so.

Something like: first step: if you live in the U.S., open a Coinbase account and connect it to your bank account (very similar to how you did it for PayPal or Venmo); Second step: BUY $10 in USDC...Coinbase simply deducts $10 from your bank account and now you have $10 in USDC in your account; 3rd step, find someone on PCF who has a Coinbase account and send him/her the $10 and ask them to send it back... this is simply done by exchanging your email addresses...no crypto key is needed..no copy and paste, etc.

There is not much to lose in the above scenario...except for a little bit of time opening the account at Coinbase.

For those outside the U.S. I would ask someone with greater expertise to suggest a similarly simple solution... i.e.; Step onepen an account at Binance; step 2, 3,,4... and let's try to walk people into doing a simple transaction before scaring everyone off

 

[cpac54]

Thank you @wuffle @Carnth and everyone else who is helping out with this topic... but, everyone.... please let's NOT turn this into a crypto thread... I believe there is another one here somewhere and we can always start others... crypto and tech jargons will make 90%+ of PCFers run away from this very quickly and they won't even give it a try.

The focus of this thread should be how to slowly get people to try USDC and make it easy for them to do so.

Something like: first step: if you live in the U.S., open a Coinbase account and connect it to your bank account (very similar to how you did it for PayPal or Venmo); Second step: BUY $10 in USDC...Coinbase simply deducts $10 from your bank account and now you have $10 in USDC in your account; 3rd step, find someone on PCF who has a Coinbase account and send him/her the $10 and ask them to send it back... this is simply done by exchanging your email addresses...no crypto key is needed..no copy and paste, etc.

There is not much to lose in the above scenario...except for a little bit of time opening the account at Coinbase.

For those outside the U.S. I would ask someone with greater expertise to suggest a similarly simple solution... i.e.; Step onepen an account at Binance; step 2, 3,,4... and let's try to walk people into doing a simple transaction before scaring everyone off

This was going to be my next question: being based in Switzerland, I can open a Coinbase account, but cannot directly link it with my bank account like in the U.S., rather I need to do a SEPA transfer from my bank (in Euros) to coinbase. This means paying a bank transfer fee plus whatever the current exchange rate is for CHF to EUR.

Once I have the funds in my coinbase account, I can then buy USDC with my Euro balance, where there's another exchange rate for EUR to USDC.

Comparing this vs. doing a direct bank wire of CHF to USD, the coinbase/USDC ends up costing approx 0.5% more (or approx $25 more in an example used for the purposes of buying a Tiger set). Not a huge difference, but I guess I wonder what the benefit is for an international user vs. a simple wire transfer?

If any international users have advice for buying USDC direct with one's own currency, without the middle step described above, I'd be grateful!

 

[kk405]

1. So, a USDC is equal to 1 American dollar. Why invest in this then and not just get American dollars? A one for one exchange to exchange back at one for one sounds like nothing happens so why bother?

I will try to answer your other questions a bit later... and without making this too complicated about the pros and cons and risks of crypto or all these new exchanges (and you're right, there is a significant lack of trust ...deservedly so)... the reality is this: we are seeing significant issues with PayPal, Venmo, Zelle and other payment methods. Yes, if you're spending a few hundred dollars once in a while for transactions, it may not be an issue, but over time, and even with future potential of changes in regulations (as we saw with the $600 reporting requirement that was eventually scuttled...but likely will come back in a different form in the future)... there is potentially a significantly better way to transfer funds. And it's cheap/free and once we get used to it, as we have with PayPal and Venmo, it becomes easy and is a game changer.

For beginners, you don't have to own any USDC or store it anywhere ... All you have to do is have an account at one of the more reputable and big exchanges. And again, you don't even have to have any money deposited... some may need a minimal amount to keep your account active, but that's similar to having a checking account at the bank...just keep a few buck in your account, only if needed.

The best part is this: it's just like PayPal... as I said, you can have a zero balance in your Coinbase account. IDC as payment), you log in to your Coinbase account... click on the buy button...and buy the amount you are sending him...let's say it's $150. Then you immediately send the $150 to him/her via his email address (process works slightly differently for international users). Transaction is free for Coinbase to Coinbase accounts and has minimal cost for others (call it sub-$5)... When XYZ gets the funds, he/she immediately sells it and converts it to US $... and transfer it to his/her bank account.

Lots of people have been complaining about closed accounts, restrictions on how much they can send via Venmo or Zelle, or reporting issues with 1099s, delayed and hold on payments for a day or more, and other shenanigans at PayPal and other platforms. USDC isn't perfect, but it does solve/address a LOT of these issues.

 

[kk405]

This was going to be my next question: being based in Switzerland, I can open a Coinbase account, but cannot directly link it with my bank account like in the U.S., rather I need to do a SEPA transfer from my bank (in Euros) to coinbase. This means paying a bank transfer fee plus whatever the current exchange rate is for CHF to EUR.

Once I have the funds in my coinbase account, I can then buy USDC with my Euro balance, where I there's another exchange rate for EUR to USDC.

Comparing this vs. doing a direct bank wire of CHF to USD, the coinbase/USDC ends up costing approx 0.5% more (or approx $25 more in an example used for the purposes of buying a Tiger set). Not a huge difference, but I guess I wonder what the benefit is for an international user vs. a simple wire transfer?

If any international users have advice for buying USDC direct with one's own currency, without the middle step described above, I'd be grateful!

I am hoping some of our international friends can help with this. I do know that many have told me the cost of transfer for them is significantly less than traditional wire transfer and or other payment platforms.

And to anyone trying to help... again, please let's keep it simple... it's how iPhone beat the pants off of Blackberry and Palm ... no need to talk about USB keys, hardware wallets or how people can get rich off of NFTs

 

[yeahfkyeah]

Now when do we get to the Pudgy Penguins that @wuffle has as his avatar

I minted 6 pudgy penguins...sold too soon

I also sold my BAYC in a moment of weakness.

 

[HaRDHouSeiNC]

This was going to be my next question: being based in Switzerland, I can open a Coinbase account, but cannot directly link it with my bank account like in the U.S., rather I need to do a SEPA transfer from my bank (in Euros) to coinbase. This means paying a bank transfer fee plus whatever the current exchange rate is for CHF to EUR.

Once I have the funds in my coinbase account, I can then buy USDC with my Euro balance, where I there's another exchange rate for EUR to USDC.

Comparing this vs. doing a direct bank wire of CHF to USD, the coinbase/USDC ends up costing approx 0.5% more (or approx $25 more in an example used for the purposes of buying a Tiger set). Not a huge difference, but I guess I wonder what the benefit is for an international user vs. a simple wire transfer?

If any international users have advice for buying USDC direct with one's own currency, without the middle step described above, I'd be grateful!

Do you have any local crypto apps?
When I’m in the Philippines I can walk up and cash into coins.PH for a tiny percentage load fee for the merchant and add cash into my account in seconds for maybe a .5% fee

They support USDC

 

[kk405]

I'll also offer a warning:
NOT YOUR KEYS NOT YOUR MONEY!

If you plan to hold any USDC for a while (or any crypto) do NOT leave it on coinbase or another exchange. They control that money and not you... great for payments, but bad for storage. This is how so many people got screwed by FTX.

It needs to be in a wallet which you control the keys to. I would recommend using a hardware wallet, but many good free software wallets exist.

Above is good advice... and gets me back to the main reason some of us might want to try to use USDC for PCF payments... I am NOT advocating crypto, nor am I suggesting anyone keep money on these exchanges...even Coinbase, as financially sound as they are...

Personally, I am using it to conduct transactions and send money in and out. For the account that I use for PCF/chip transactions...I typically have $100 in my Coinbase account. If I need to send out $1125 to buy some chips, I buy $1125 of USDC on Coinbase...they deduct the money from my bank account...just like PayPal would... then I send it to the seller.. and i get my chips... now, if someone sends me the $1125, I immediately sell the USDC and convert it to US $, and again, immediately transfer it out to my bank account... there is little to no risk as I am not holding any money/capital at Coinbase.

Is this all 100% risk-free? No, but it's pretty close...especially if you stick with well capitalized companies like Coinbase

 

[yeahfkyeah]

Above is good advice... and gets me back to the main reason some of us might want to try to use USDC for PCF payments... I am NOT advocating crypto, nor am I suggesting anyone keep money on these exchanges...even Coinbase, as financially sound as they are...

Personally, I am using it to conduct transactions and send money in and out. For the account that I use for PCF/chip transactions...I typically have $100 in my Coinbase account. If I need to send out $1125 to buy some chips, I buy $1125 of USDC on Coinbase...they deduct the money from my bank account...just like PayPal would... then I send it to the seller.. and i get my chips... now, if someone sends me the $1125, I immediately sell the USDC and convert it to US $, and again, immediately transfer it out to my bank account... there is little to no risk as I am not holding any money/capital at Coinbase.

Is this all 100% risk-free? No, but it's pretty close...especially if you stick with well capitalized companies like Coinbase

This is the way

 

[kk405]

I can't stress enough how cautious you need to be with your own wallet. Once you become more active in crypto, you will encounter many things that try to take your money. As said earlier, transactions are not reversible, so once you send a token it's gone.

Most self-custody wallets come in the form of a Chrome extension or phone app - MetaMask, Rainbow, Coinbase Wallet, Trust Wallet are a few popular ones. You should be careful on whatever device you install this on. You will be given a secret 12 or 24 word "seed phrase" to create your unique wallet. Never ever store this phrase digitally. Don't send it in an email, don't save it to a text document, no Google drive. Once someone else has your seed phrase, they have control of your assets. Write it down, or stamp them into metal, and store it in a fireproof safe.

As I keep saying, be cautious and skeptical. If you get an email from one of these self custody wallets, assume it's a phishing scam. If you go to a website and it pops up the extension asking you to transact, verify it's doing something you intended it to do. "Do I want to approve my tokens to be transferred around by this site?" If a pop up asks you to type your seed phrase in, big huge giant red flag.

agreed with above, but too complicated of a topic and not necessary to talk about/discuss YET ... for the purpose of onboarding people .... and recruiting more people to even try USDC....

maybe in part 2, after a few have onboarded... we can tell them ... 'don't use your Coinbase account for gambling on crypto or Apes'

Now when do we get to the Pudgy Penguins that @wuffle has as his avatar

Curious about that too... cute little fella...maybe we can ask him in a different thread...

 

[kk405]

Do you have any local crypto apps?
When I’m in the Philippines I can walk up and cash into coins.PH for a tiny percentage load fee for the merchant and add cash into my account in seconds for maybe a .5% fee

They support USDC

how does that help/work if someone is trying to send $7000 or $37000?

 

[yeahfkyeah]

agreed with above, but too complicated of a topic and not necessary to talk about/discuss YET ... for the purpose of onboarding people .... and recruiting more people to even try USDC....

maybe in part 2, after a few have onboarded... we can tell them ... 'don't use your Coinbase account for gambling on crypto or Apes'



Curious about that too... cute little fella...maybe we can ask him in a different thread...

How curious are you? I can send you all kinds of NFTs for a primary cash set...

Check out just how stupid I am at: https://opensea.io/yeahfkyeah

 

[waddadonk]

How curious are you? I can send you all kinds of NFTs for a primary cash set...

Check out just how stupid I am at: ~redacted~

Promise this is the last derail. But ser, you have a MAYC, Otherside WITH Koda, and Rogs

To make this semi-relevant to the thread, but probably more for the advanced thread: If you do move to a self-custody wallet, the blockchain is public and you can see all transactions. The centralized exchanges which are recommended in this thread for USDC transactions, like Coinbase and Binance, provide some level of anonymity to the public as they pull funds from many, many wallets. Of course, you KYC with the exchanges so you're not completely anon.

 

[Tonysquander]

I wouldn't think of USDC as an investment. It's great for payments, or as a store of value from a more volatile crypto while you expect it to lose value.

I'll also offer a warning:
NOT YOUR KEYS NOT YOUR MONEY!

If you plan to hold any USDC for a while (or any crypto) do NOT leave it on coinbase or another exchange. They control that money and not you... great for payments, but bad for storage. This is how so many people got screwed by FTX.

It needs to be in a wallet which you control the keys to. I would recommend using a hardware wallet, but many good free software wallets exist.

Please explain this wallet process. How does one save keys and coins on it and move back and forth as needed to coinbase?

I also seem to recall something on the last tax return asking if I owned or had owned any crypto or something about crypto...are these purchases/holdings/transfers reported to the govt. and do they need to be disclosed on income tax returns?

Is there a coinbase transfer fee for $ in from your bank account and/or for $ back out to your account?

 

[Tonysquander]

Another question, has anyone run into your bank limiting the daily amount you can transfer into coinbase? I don't want to be set up and then go to transfer several thousand into coinbase only to be told there is a limit on transfers by the bank. Do the banks charge for transfers into it or back out?

 

[yeahfkyeah]

Please explain this wallet process. How does one save keys and coins on it and move back and forth as needed to coinbase?

I also seem to recall something on the last tax return asking if I owned or had owned any crypto or something about crypto...are these purchases/holdings/transfers reported to the govt. and do they need to be disclosed on income tax returns?

Is there a coinbase transfer fee for $ in from your bank account and/or for $ back out to your account?

I can easily help explain the wallet process, but the tax implications are a whole different beast...I used software last year to track all of my wallets and give me tax forms, but it was absurd and not all accurate. I probably paid too much, but I want to be able to show my work if anyone comes looking...

As far as setting up a wallet (off exchange), there are many options. The most popular software wallet is likely Metamask, and my favorite HW wallet is Ledger. When you initially set up a wallet, it will give you a seed phrase. These are typically 12 or 24 word phrases which you will need to store somewhere EXTRA safe. Anyone with these words can restore your account to a different wallet...this is how you control your money. If you ever lose access to your device with Metamask, or lose your Ledger, you can simply input this seed phrase into another wallet to restore this account.

With your main wallet set up you would add USDC and then check what the address is to receive funds. From coinbase you would send your funds to that same address, and it will send (with a small fee) to your Metamask/Ledger. Same for sending back to coinbase...your account will have a specific address to send USDC tokens to.

If I'm not mistaken, however, USDC sends on the ethereum network. This would mean you wouldn't be charged any extra USDC to transact, but would need to pay a small gas fee in ETH. This would apply both ways, or any time you send between wallets. This fee is not applied in the case of coinbase to coinbase transfers. If buying/sending/cashing out only within Coinbase you shouldn't see any fees.

 

[yeahfkyeah]

Another question, has anyone run into your bank limiting the daily amount you can transfer into coinbase? I don't want to be set up and then go to transfer several thousand into coinbase only to be told there is a limit on transfers by the bank. Do the banks charge for transfers into it or back out?

I believe it takes several days to connect your bank account for instant transfers of USDC...if you're interested, I would recommend getting that moving NOW. Buying ETH or BTC with your bank account is typically instant for Coinbase trades but takes a while to actually clear your account to send out to another wallet.

 

[wuffle]

Thank you @wuffle @Carnth and everyone else who is helping out with this topic... but, everyone.... please let's NOT turn this into a crypto thread... I believe there is another one here somewhere and we can always start others... crypto and tech jargons will make 90%+ of PCFers run away from this very quickly and they won't even give it a try.

The focus of this thread should be how to slowly get people to try USDC and make it easy for them to do so.

Something like: first step: if you live in the U.S., open a Coinbase account and connect it to your bank account (very similar to how you did it for PayPal or Venmo); Second step: BUY $10 in USDC...Coinbase simply deducts $10 from your bank account and now you have $10 in USDC in your account; 3rd step, find someone on PCF who has a Coinbase account and send him/her the $10 and ask them to send it back... this is simply done by exchanging your email addresses...no crypto key is needed..no copy and paste, etc.

There is not much to lose in the above scenario...except for a little bit of time opening the account at Coinbase.

For those outside the U.S. I would ask someone with greater expertise to suggest a similarly simple solution... i.e.; Step onepen an account at Binance; step 2, 3,,4... and let's try to walk people into doing a simple transaction before scaring everyone off

Agreed - I tried to keep it as simple as possible without getting too technical

 

[wuffle]

what are your thoughts about using xumm wallet ?

I've never heard of this wallet before. A quick google search shows that it's a wallet for XRP?

 

[Highli99]

believe it takes several days to connect your bank account for instant transfers of USDC

Not anymore, coinbase uses Plaid for bank verification so you can buy and transfer instantly. The downside is Plaid is a data company and I effing HATE the access it gets. They can see everything about the the accounts you give it access to. No thanks.

I set up a seperate bank account at a seperate institution just for crypto stuff and that way Plaid can’t see my transactions or assets. If you don’t care about privacy it doesn’t matter but I do.

I am a huge fan of ledger wallets as well. Very secure. The point about blockchain being transparent is a good one. I’d probably receive directly into coinbase then transfer out to ledger for privacy. Do not keep funds on coinbase or any other exchange any longer than necessary. Send to other party or your wallet.

 

[Tonysquander]

I can easily help explain the wallet process, but the tax implications are a whole different beast...I used software last year to track all of my wallets and give me tax forms, but it was absurd and not all accurate. I probably paid too much, but I want to be able to show my work if anyone comes looking...

As far as setting up a wallet (off exchange), there are many options. The most popular software wallet is likely Metamask, and my favorite HW wallet is Ledger. When you initially set up a wallet, it will give you a seed phrase. These are typically 12 or 24 word phrases which you will need to store somewhere EXTRA safe. Anyone with these words can restore your account to a different wallet...this is how you control your money. If you ever lose access to your device with Metamask, or lose your Ledger, you can simply input this seed phrase into another wallet to restore this account.

With your main wallet set up you would add USDC and then check what the address is to receive funds. From coinbase you would send your funds to that same address, and it will send (with a small fee) to your Metamask/Ledger. Same for sending back to coinbase...your account will have a specific address to send USDC tokens to.

If I'm not mistaken, however, USDC sends on the ethereum network. This would mean you wouldn't be charged any extra USDC to transact, but would need to pay a small gas fee in ETH. This would apply both ways, or any time you send between wallets. This fee is not applied in the case of coinbase to coinbase transfers. If buying/sending/cashing out only within Coinbase you shouldn't see any fees.

So if I’m reading this right, transactions involving buying and selling coins, even if it’s USDC, which is tagged to the dollar and unlikely to make any profit or loss either way, are required to be reported and need to be kept track of and disclosed on your tax return? I was starting to like the idea of this method of payment but not if I need to do a bunch of paperwork later just because I bought some poker chips.