How Blockchain and Cryptocurrencies is Changing the World: Crypto Use Cases
There is no doubt that Cryptocurrency is here to stay. More and more people are beginning to use it as a form of payment, and businesses are starting to accept it as well. Here are some reasons why Cryptocurrency is becoming more popular and why you should start using it. Today we talk about Cryptocurrency Adaptation and Use cases
Nowadays a lot of skeptics claim that Bitcoin is a bubble which is about to burst and that there’s no practical use for cryptocurrencies. States have shown mistrust and are not ready to support crypto. Some countries like China have even banned it outright. We are here to prove that these assumptions are wrong and cryptocurrencies have more practical value than people think. Let’s see how and where you can really use your digital cash.
Read: Top 10 Countries with The Highest Rate of Cryptocurrency Possession In 2022
Many cryptocurrencies can be used for applications other than just paying for goods and services.
- Cryptocurrencies open up access to financial services for users around the world
- Ethereum was the catalyst for the growth of the crypto space into an industry through the ERC20 standard
- IOTA aims to develop use cases for the Internet of Things in real life
- Asset-backed tokens grant ownership to assets such as real estate and precious metals
- Stablecoins are increasing in popularity because they trade at parity with fiat currencies
- Media and Entertainment
- Blockchain and Real World Data Computation
In this post, we are going to learn about different use cases of cryptocurrencies that go beyond digital money.
The present definition of cryptocurrencies terms as “digital representation of value” not issued by a central bank or another public authority and accepted by natural or legal persons as means of payment. Cryptocurrencies can be stored, transferred, or traded electronically. However, in most countries, they are not considered currencies in the traditional sense.
Also, besides their function as a medium of exchange (in the form of digital money) and a store of value, cryptocurrencies are products with market value. Thanks to the potential of blockchain technology, a vast range of use cases beyond conventional financial transactions are emerging as the number of applications is increasing at unprecedented rates.
Bitcoin - Payment and Decentralised Bank
Trends indicate that besides countries struggling with political instability and hyperinflation, there is also formidable interest in Bitcoin in regions where the local population has little or limited access to banking facilities. Creating a digital wallet to transfer Bitcoin offers people access to a store of value independent of traditional banks and also many Decentralise Exchange (Dex) advantages and uses.
While in many of those regions’ economies are still largely cash-driven and people cannot afford to pay for transportation to visit banks for registration, the number of those who have access to or own mobile phones is increasing. Thus, using digital wallets to transfer Bitcoin independent of traditional banks may provide a viable alternative for people without a bank account to participate in finance and to create a store of value. Cryptocurrency adaptation have also led to the birth of Web 3, What is Web 3? Web 3 is one of the products of blockchain technology which is redefined how we used the internet where a digital wallet grants one access to internet resources, replacing how credit card and other payment processor how payment on their channels. Some companies are using Bitcoin to settle their payroll system. payroll companies for small business can handle their financial processes seamlessly with cryptocurrency.
There are some financial brokerage adopting cryptocurrency and also some leverage, while other used Defi to offer crypto load and business loan while consolidate debt from small business loan.
Ethereum - A decentralised network for applications and smart contracts
Bitcoin may have started the cryptocurrency revolution all but it was Ethereum that pushed cryptocurrencies into a true industry. Thanks to Ethereum’s unofficial status as the “world computer” for decentralised applications (DApps), the popularisation of smart contracts and introduction of the ERC20 standard for tokens, the Ethereum network currently provides the world’s leading platform for distributed computing and decentrised finance (Defi).
Read: Essential Ethereum guide for beginners
The Ethereum network currently provides the world’s leading platform for distributing computing.
As you learned in previous lessons of the Ethereum Explain, the ERC20 standard and smart tokens are the technological foundation of blockchain-based assets such as utility tokens, which convey holders the right to use DApps or preferential access to the services of cryptocurrency ecosystems, online games such as CryptoKitties and security tokens, which transfer investors shares of the company issuing the token.
IOTA - connecting services and resources in the IoT
The IOTA project behind the Tangle, an open-source distributed ledger, has the objective of creating an environment in which machines trade services and resources with each other. One use case for IOTA which is already underway in real life, is IOTA’s partnership with a prominent car manufacturer to test employing “smart wallet” technology in the scope of connected car services.
IOTA aims to create an environment in which machines trade services and resources with each other.
Drivers are able to earn credits that they can use to digitally pay road tolls, smart charging or parking fees using their mobile phones. They receive these credits by enabling their vehicles to report data on road conditions to entities such as highway departments, road maintenance authorities and others.
Another of IOTA’s Tangle use cases involves building a self-sufficient, energy-positive community in Trondheim, Norway. Based on the assumption that office buildings are responsible for 40% of global energy consumption, the project has set out to upgrade such buildings from being energy wasters to become producers instead, even supplying surrounding buildings with decentralised, sustainable electricity. All in all, the project is expected to generate more renewable energy within 60 years than the total amount of energy that is needed to build, maintain and demolish the building.
Asset-backed tokens - NFTs
In contrast to utility tokens, asset-backed tokens have intrinsic value that is directly linked to the physical asset backing up the token. The tokenisation of assets enhances the liquidity of real world assets in the markets.
The term “liquidity” in this case implies how quickly and easily an asset can be bought and sold. By digitising a real world asset like real estate or a car, purchase processes are much quicker and easier.
Digitising assets also opens up markets to those investors that may not have been able to participate in investing until now. While traditional financial institutions more often than not bar clients with insufficient funds from making investments, tokenisation of a physical asset allows for a very high degree of fractionalisation - meaning that an asset is divided into numerous small parts.
By splitting ownership of an asset into numerous small fractions, all invested parties benefit from their investment in proportion to the amount of the asset they own and require just a small amount of funds to start investing,
While traditional financial institutions more often than not bar clients with insufficient funds from making investments, tokenisation allows people to start investing with a small amount of money.
NFTs, or "non-fungible tokens," are a new type of digital asset that allows for more complex and customizable trading and ownership. NFTs are similar to other digital assets, like Bitcoin and Ethereum, but they are built on a new blockchain technology.
NFTs can be used to create unique and customizable assets that can be traded and owned like any other digital asset. They can also be used to power new decentralized applications (DApps). NFT and Metaverse are offer us with good opportunities in real estate as we buy houses and land and Sell house and land as digital asset with other art that are digitalized.
Read: Crypto Biz: Gucci “Ape” in Crypto.
Tether - Pegging Cryptocurrencies to Fiat
Stablecoins were established with the purpose to eliminate the volatility of traditional cryptocurrencies by consistently holding a stable value. In most cases, one unit of a stablecoin is “pegged” at the value of one US dollar or the Japanese yen (fiat-backed).
However, a stablecoin may also be pegged to another cryptocurrency (crypto-backed) or to other real-world assets (commodity-backed). The fiat currency or asset backing up a stable coin is optimally held by a regulated financial entity.
Stablecoins such as Tether and USD Coin which are pegged to the US dollar are used by traders to move quickly between cryptocurrencies on cryptocurrency exchanges.
The concept underlying a stablecoin is that its value fluctuates along with the stable value of another asset, providing the benefits of a cryptocurrency without the price volatility. The main use case for stablecoins is in cryptocurrency trading by traders who want to quickly switch between a volatile cryptocurrency and an asset that is more stable.
Imagine you want to exchange Bitcoin for Ethereum without losing too much value due to price movements. You expect the Bitcoin price to drop and therefore exchange your Bitcoins for a stablecoin like Tether or USD Coin.
Furthermore, stablecoins can also provide an option of value transfer and participation in the global financial system to people living in regions marked by economic turmoil, unstable domestic currencies and insufficient access to banking.
The driving force behind the blockchain industry is the democratization of technologies and investments. Over time, the successful use cases based on cryptocurrencies will directly depend on global regulators and industry professionals working together to promote the adoption of digital assets in everyday life.
With the recent cryptocurrency news and crypto update on hacks like Terra Luna coin news going on one needs to understand Cryptocurrency very well in order to always make informed investment choices
Media and entertainment
If you are a blogger, writer, or videographer crypto adoption could be especially significant for you. Platforms like Steemit, Cent, Bitchute etc. are social networks that reward creators contributing to their platforms. Create valuable and interesting content, share it and you will get an internal coin, which can be exchanged with any other cryptocurrency.
In case your art project costs you a fortune, Tokit can be the solution. Tokit works as a crowdfunding platform for music producers, film directors, writers, etc., helping them tokenize their projects. Thus, they can manage the rights, revenue and royalties of their project by transferring tokens to contributors or anyone who was part of their team. Tokit drew a lot of attention in 2017 when a Slovenian music producer raised $ 2 mil. in 24 hours on this platform.
Video games are perfect for tokenization. A lot of online multiplayer games have numerous in-game items that are tradable among users. Having no internal system for trading, gamers don’t have any guarantee that they won’t be cheated. Now with the boom of blockchain and cryptocurrencies, game projects such as Worldopoly and Beyond the Void have designed their own tokens to create an internal cryptocurrency economy. Players can sell and buy in-game swords, spaceships, vehicles, etc. and don’t have to worry ABOUT fraud because all transactions and rights for the items are registered on the blockchain and some crypto job available in web 3 like live virtual assistance.
Despite all the negative talk about crypto and the recent bear market, new crypto users are flocking to the industry. As the number of users increases, the interest from companies is also growing. New places to use your coins keep opening up all over the place. If you look closely you might even be able to find a place in your neighborhood to buy bread with crypto.
Gambling and betting
Cryptocurrency is an ideal tool for the gambling and betting industry, so there’s no surprise that it has become very popular among sport betting services and gambling websites. We have already told you about the best betting websites accepting crypto, check them out. As for online casinos, there are several popular platforms such as FortuneJack and mBit Casino where you can try your luck if you’ve got some spare coins.
Las Vegas, the heart of the gambling industry, decided it didn’t want to miss out on the fun; ATMs, where people can cash out their Bitcoins are installed all around Las Vegas and some casinos accept BTC as payment. But Las Vegas strip clubs have gone even further. Strippers have been getting temporary tattoos with QR codes to accept Bitcoins. The use of cryptocurrency allows the dancers to avoid explaining to banks where they get large amounts of cash. According to some strip club workers, banks can block accounts linked to people working in the adult entertainment industry.
Blockchain and Real-World Data Computations
Blockchain has seen a staggering rise in popularity since Bitcoin, the first cryptocurrency, launched in 2010. Blockchain has a number of advantages, including decentralization and security. The demand for a decentralized currency has catapulted Bitcoin and other cryptocurrencies to worldwide popularity.
But blockchain has its limitations. These systems are inherently closed off from the rest of the world, which is good for security and integrity but also limits the input data they can accept.
Thus, there is a need for a sort of bridge that can help these systems see what is happening in the outside world. But in order for the system to work, the input cannot come from a single source. Why? Because it would then rely on a centralized source of data, which goes against the very nature of blockchain, that is the very problem Chainlink can help solve, as we will find out.
Chainlink is a decentralized oracle network that is poised to play an important role in the real-world implementation of blockchain technologies. The purpose of this network is to provide input on a variety of external sources of data.
Although blockchain is great at what it does — providing a decentralized, secure ledger for digital transactions — it isn’t so great at taking input for things happening outside the blockchain. There are many “off-chain” forces that influence markets, including fiat currencies, credit cards and even the weather and sports scores. As a decentralized oracle, Chainlink can provide input to what’s known as smart contracts.
These smart contracts help the system respond to a wide range of input (if X, do Y). As the first cryptocurrency, Bitcoin and its corresponding blockchain can only process a small range of this input. But newer blockchains, such as Ethereum, have a wider range. That includes support for programmable smart contracts.
On that note, Chainlink was launched on the Ethereum blockchain in 2019, but it is meant to be agnostic. Thus, it can work with other blockchains, too.
Resource for crypto beginners: Bytexbit.com, , binance.com, coinbase.com, coingecko.com, crypto.com
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