The digital currency world is growing exponentially and it shows no signs of stopping.
Bitcoin, being the first cryptocurrency invented in 2009, has given rise to numerous other
cryptocurrency tokens that are being used for different purposes. With such a rapid change
in the digital economy, new use cases of cryptocurrency continue to emerge. From using it
as a payment method to implementing it as a security measure, there are many ways crypto
is changing the world. Let’s look at the compelling use cases of cryptocurrency and how it is
changing the world.
Use Cases of Cryptocurrency
As the first and most common of use cases, payments are the obvious for cryptocurrencies.
Being a decentralized payment system, cryptocurrencies can be used for online transactions
without needing a third-party service. Because of the nature of blockchain technology,
cryptocurrency payments do not come with high transaction fees. There are no processing
charges, additional fees, or foreign currency exchange rates. Because of their decentralized
nature, cryptocurrencies are generally considered safe to use, especially for international
payments. They have no intermediary banks or governing bodies; thus, they are considered
very safe from various types of fraud. Open-source and distributed ledger technologies have
also enabled cryptocurrency payments to be accessible to every part of the world.
Another important aspect of cryptocurrencies is their use as a security measure. More
businesses are accepting cryptocurrencies as payment methods and using them to protect
their data and systems. Because of their decentralized nature, cryptocurrencies are safer
and harder to hack than credit cards. Cryptocurrencies are also immune to data breaches
and hacking and do not come with arbitrary chargebacks. Because of distributed ledger
technology, cryptocurrency transfers are verified and recorded. This is beneficial for
businesses because they can track the entire process of their payments. And because of the
decentralized nature of cryptocurrencies, they have no way of being shut down; thus, they
continue to operate 24/7, even if a country’s government shuts down their own financial
- Smart Contracts
A smart contract is a self-executing agreement between two parties that does not require a
third party or an intermediary to verify and authenticate the transaction. The idea of smart
contracts was first introduced with the Ethereum blockchain. This is the second-largest
cryptocurrency coin after Bitcoin and has many uses, from Smart Contracts to Decentralized Autonomous Organizations (DAOs). Because of blockchain technology's decentralized nature, intelligent contracts' execution is transparent and publicly verifiable through consensus algorithms. Such a structure makes it impossible for anyone to alter the contract terms.
- Store of Value
Cryptocurrencies have been commonly associated with other assets such as stocks, gold,
and real estate. They are seen as assets that can be traded or exchanged for goods or
services in the future. This is the idea of the store of value. And the value of cryptocurrencies
will continue to rise as more people invest in them. The most common way to invest in
digital currency is by trading coins for other ones or by buying these coins on crypto
exchanges. The value of the coins goes up as more people buy them, and the sellers can
then exchange their digital money for goods or services or sell it for cash. Other forms of
investing in cryptocurrencies include buying them for long-term storage or investing in ICOs
(Initial Coin Offerings).
How is Cryptocurrency Changing the World?
- Easy to Send & Receive Money
Cryptocurrency is changing the way people think about money. Before we had fiat currency,
meaning that country’s paper and coins, and when you wanted to buy something, you had to
go to a bank and exchange your money for the goods or services you wanted. That process
was inefficient, slow, and expensive. Cryptocurrencies like Bitcoin and Ethereum have helped
solve this problem by making it possible for people worldwide to send & receive money to
each other quickly and at a low cost.
- More Secure Transactions
Cryptocurrency allows for more secure transactions than traditional banking methods do.
Cryptocurrency transactions are made through computers that use encryption algorithms to
ensure that no one else can see or change the transaction details. This means that in an
emergency where there is no trust between parties involved in a transaction (such as with
fraudsters), cryptocurrency transactions become much more secure than traditional banking
methods do because they don't require trusted third parties like banks or governments to
validate them before sending them on their way.
- Provide Lower Transaction Fees
Cryptocurrencies have lower transaction fees than credit cards and bank transfers;
furthermore, they're usually free of charge when transferred between wallets. Bitcoin
transactions are confirmed within 10 minutes, and Ethereum transactions take about 20
seconds (or less). If you want to transfer money from one wallet to another, you don't need
an intermediary like a bank account or credit card company—you could just send them both
- Financially Independent
Cryptocurrency has also helped people who did not have access to banks or credit cards
become more financially independent. People can do business without having to worry
about their finances and payments. This can help them start their own businesses or even
move out of poverty if they want to.
Cryptocurrency is a digital asset created as an alternative to fiat money. It is decentralized
and operates on a peer-to-peer basis between users through blockchain technology. Many
different cryptocurrencies are available, but the most common are Bitcoin, Ethereum, Ripple,
and Litecoin. With such a rapid change in the digital economy, new use cases of
cryptocurrency continue to emerge all the time. From using it as a payment method to
implementing it as a security measure, there are many ways crypto is changing the world. Its
definitely the future of finances and you’re seeing it at its infancy.