10 Most Popular Use Cases For Cryptocurrency

Cryptocurrency is growing in popularity, and more industries and businesses are lining up to join the change. Since its inception in 2009, the new payment option meant big savings for you as it eliminates the middleman, including banks and remittance companies such as Western Union.

As adoption increases, people are starting to find all kinds of reasons to switch over to digital-only money. To give you an idea of how widespread the use of cryptocurrency has become, let's take a look at the ten most popular use cases for cryptocurrency will help you understand why it is the new monetary trend.

What is cryptocurrency?

A cryptocurrency is virtual money that exists in the form of a token or coin and operates within the platform that was created. Most cryptos have remained intangibles, although some have ventured into traditional states such as credit cards.

Since 2009, more than 9000 cryptocurrencies have been started by the same number of platforms. Each platform tries to separate itself from the rest by its focal service or case use. Here are three of the most popular classifications.

Tokens:

Platforms offering these cryptos use them for purposes other than money, even though, at some point, they are compared with money, and an exchange value is established by the platform. Some tokens may be linked to the value of the company and are called security tokens.

Utility crypto:

You can use these tokens to interact with other users on the platforms. You may trade or access the platform service using this virtual money. Platforms also use them as part of a reward system for contributors.

Meme coins:

If you are part of a social group, you can create a special cryptocurrency for it, a meme coin like dogecoin. These are mostly used for charity and donations.

Here are ten of the most cryptocurrency use cases.

1. Saving

Bitcoin has bought with it true digital scarcity and maintains a store of value. This has encouraged investors to buy and hold or rather save in bitcoin. Some tend to save using their own keys and take no custodial risk, while others leave their funds with third-party businesses to manage the funds.

Services like exchanges and fintech apps, as well as some banks and investment companies, are now allowing savings in virtual money.

In March 2022, the online giant, FIRI, introduced a new crypto saving program, "Kryptosparing", making it easier for customers to save in cryptocurrencies as if they were saving in a regular account. Clients can create savings accounts and perform deposits or withdrawal transactions.

2. Speculative trading

Crypto tokens tend to have massive amounts of volatility, which attracts traders coming into the space to try and take advantage of these price movements. There is a growing trend towards investors' day trading or speculating on price movements in the spot market, futures market or derivatives market.

3. Inflation hedge

Most people ask the question of whether or not cryptocurrency can be an inflation Hedge. According to the IMF, inflation is the reduction in the purchasing power of a currency. When investors saw the rapid growth of Bitcoin and other cryptocurrencies in 2021, they were eager to increase their holdings. However, near the end of the third quarter, the virtual money dived, leaving investors jittery.

That is where stablecoin cryptocurrencies come in. They are backed by a reserve amount matching the circulation value. Plus, they are pegged to a fiat currency, such as the USD, on a 1:1 ratio. This gives hope to investors seeking an alternative to a volatile world economy.

4. Remittance

When a traditional fiat money transfer is made, the money becomes available in the other country or location almost immediately. However, the remittance service will have to refund the sum paid out by the second location at a later date.

With cryptocurrency transfer, the paying company or individual already receives the money instantly once confirmed on the chain. This is great news for both the payee and the payer. There is a great reduction in fees, funds are transferred instantly, and no records are necessary.

5. Gambling and sports betting

Bitcoin and other cryptocurrencies operate on blockchain technology, making transactions completely private and easy. Players can send money to their favourite gambling and sports betting facilities without the approval of regulating bodies.

As the US government enhances its crackdown on online gambling, cryptocurrencies are becoming more attractive for casinos, especially offshore ones.

Many sportsbooks have made Bitcoin or other altcoins as a standard payment option added to their payment platform, such as those listed on casinos-online.co.ke.

6. Remote work payments

The COVID-19 pandemic has made global staffing models call for efficient workflow management systems. Businesses need to hire top talent from all over the globe to stay competitive and grow. Paying these remote workers with traditional fiat currencies, subject to government regulations, inflation, and currency exchange processing fees, can be expensive.

Cryptocurrency has provided the solution. It is cheaper and private, and no additional accounting staffing is needed. Plus, most freelance job platforms accept Bitcoins and most stablecoins, giving the company the ease of remote work payments.

7. International trade

When Bitcoin was launched in 2009, no one could envision that it would play a leading role in fomenting international trade, but today it is at the centre of the creation of an economic block consisting of Latin America and the Caribbean (LAC).

Blockchain technology and the frontier funds transfer protocol of the cryptocurrency allow optimised processes, make goods traceable, guarantee the security of payments and financing, facilitate the verification of digital quality and origin certifications, enable real-time sharing of information on the different stages of trade, and helps improve how related public and private services operate.

8. Charity and donations

One of the largest problems for charity organisations has been clarity. They have to pay huge legal and accounting fees every year. This worsens with the detailed contracts that must be created for huge donors who seek to access tax reductions from their charity. These contracts require traceable and audited reports. Thanks to blockchain technology, this is an issue of yesterday.

Cryptocurrency Platforms, such as Ethereum (ETH), provide use cases for reporting and accountability through Smart Contracts. Since these contracts are created directly in the code, there is no need for an intermediary party such as lawyers or accountants. The donations are traceable, and the reports are automatic, audited, and credible.

9. Private transactions

While most virtual currencies are built around privacy and are completely anonymous, it is important to understand that it is not 100% untraceable. If we were to use Bitcoin as an example, we would discover that it does not document names or source details. A good example is that its founder is not a real person's name.

However, it does record transaction trace information such as IP addresses. These in turn, can be traced to the device of the transaction, and although an IP is not a legal ID, the information can be used to isolate destinations and origins of transactions. For example, Coinbase does not permit the transfer to or from gambling sites.

Some cryptocurrencies do provide a fully private service, . In this way, there is no record of identity on the ledger, and the transaction is 100% private. Despite having these private networks and tokens, some of these have very limited coverage and may not be available for your country or niche, so they become hard to acquire.

Here are some tips on keeping your private transaction completely untraceable.

• Pay for a private service
• Make an anonymous donation
• Prevent advertisers from tracking your spending habits
• Only share your personal info on secure servers, and use a strong ant-virus system on your computer
• Keep your spending habits private in terms of what you spend and where
• Don't share your public addresses
• Don't re-use the same addresses
• Holding value outside the traditional system

10. NFTs

Non-fungible tokens (NFTs) and digital collectables represent real-life items such as art pieces, merch, and real estate. The world is embracing technology to increase the value of original and distinctive works. NFTs are used to generate documents that serve as proof of authenticity for tangible assets like paintings and jewellery, digital music, and art.

More to come for crypto

There are many more ways in which digital money is changing our lives. Cryptocurrencies and their use cases will lead us into new horizons with more freedom.

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Recommended reading

If you enjoyed this post and have a little extra time to dive deeper down the rabbit hole, why not check out the following posts on cryptocurrency and blockchain.

• Why Blockchain and Cryptocurrency Is The Future Of Money
• 24 Ways To Earn Cryptocurrency
• How To Pay Tax On Cryptocurrency In South Africa
• How To Buy Bitcoin In South Africa
• Why Does Your Bitcoin Wallet Address Keep Changing?
• How To Tokenise Your Art & Sell It For Cryptocurrency

Disclaimer: This article should not be taken as, and is not intended to provide any investment advice and is for educational purposes only. As of the time posting the writers may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency as all investments contain risk.

Tags: Crypto, Stablecoins, NFT, Cryptocurrency , Blockchain, Guest Post