8 uses of cryptocurrency to know

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Cryptocurrency is a decentralized digital currency based on blockchain technology. You may be familiar with the most popular versions, Bitcoin and Ethereum, but there are over 19,000 different cryptocurrencies in circulation.

For most people, cryptocurrencies are generally considered high-risk investments. However, what gets lost in the hype and speculation is that most decentralized digital currencies like Bitcoin were created to “do something useful” and therefore have a wide range of powerful use cases. Many countries, often with less regulation, fewer banks and younger populations, have figured it out!

However, cryptocurrency continues to be heavily influenced by macro market trends. While cryptocurrency and blockchain is a unique technology unlike any other payment and accounting technology, its value has been affected over the past year by inflation, interest rates and the relationship with the US stock market. In particular, the main driver of price changes in 2022 has been the CPI index and FOMC rate announcements. It’s worth noting that Web3 has partially disengaged from the speculative cryptocurrency trading market, with Web3 sectors including passive income, gaming and NFT markets maintaining consistent volume and usage over the past three months. This consistent use and user base associated with Web3 explains the growing demand for Layer2 solutions. This generally refers to any secondary framework or protocol built on top of an existing blockchain that adds features that increase the scalability of the main chain.

In terms of 30-day daily active users, Arbitrum averages 48,000, Optimism 61,000, and Polygon 381,000. This means that the leading Ethereum layer 2 solutions have almost half a million daily users. About 470,000 daily active Ethereum users.

In any case, once MiCA is implemented, the line between a suitable cryptocurrency project and one that is not will be clear. While there are still those who believe this will stifle innovation, it is worth noting that the cost of this innovation has been a series of epic financial crashes that have driven more people away from cryptocurrency than any regulations. Despite the extremely difficult year 2022, most crypto projects have not failed, a lot of money has been raised, and the result will be a number of Layer 2 placements aimed at the retail market, which can attract new users and start developing the sector this year. again.

Cheap money transfers

One of the most popular uses of cryptocurrency is to send and receive payments at low cost and in real time. For example, a recent $99 million Litecoin (LTC) transaction took just two and a half minutes to process and cost the sender just $0.40. If this money transfer went through a financial intermediary, the fees would be much higher and the transfer would take several days, or even longer if it was a cross-border transaction. The low fees associated with transactions using digital currencies such as Litecoin (LTC), Stellar (XLM) or Bitcoin Cash (BCH) make them excellent payment systems for international money transfers.

Productivity

Successfully trading cryptocurrencies for profit takes a lot of time, experience and skill. Instead, many cryptocurrency holders hold onto their coins for long-term gains. However, there are ways to earn regular interest. Popular examples include DeFi lending and cryptocurrency. Giving your cryptocurrency to a reputable platform is an option offered at 12% per year on highly liquid cryptocurrencies like Tether. However, it should be noted that this type of loan is not without risk. Several major crypto lending platforms went bankrupt in 2022, taking their customers’ funds with them. Cryptocurrency lending or borrowing is not insured by the FDIC or similar government agencies in other countries.

Censorship resistant

While you probably don’t think your bank account and assets will be frozen, the reality is that it happens more often than people think, especially in jurisdictions where the rule of law is questionable. And in cases where countries are struggling with record inflation, like in Venezuela. This is where one of the most unique and powerful uses of cryptocurrency comes from. Cryptocurrencies like Bitcoin act as a censorship-resistant alternative store of wealth that is only accessible to individuals with the private keys to the wallet. Therefore, no private Bitcoin wallet can ever be frozen by the authorities.

Investing in startup startups

The emergence of digital token-based fundraising has made it possible for anyone with an internet connection to become an investor in innovative early-stage tech startups, while also providing capital to new startups. Although less common these days, initial coin offerings (ICOs) and IPOs are a form of fundraising that offer startups the opportunity to raise capital by selling a newly minted digital token to early backers of a project in exchange for established cryptocurrencies such as Bitcoin (BTC). or Ether (ETH). The price of the newly issued token then acts as a proxy for the success or failure of said startup once it begins trading on the secondary market.

In the past, access to these transactions would have been available only to experienced venture capitalists, but the emergence of cryptocurrency has opened these opportunities to a wider range of investors. In some cases, the digital tokens of the best-performing ICOs have increased by several thousand percent, and cryptocurrency-based fundraising has helped startups raise more than $12 billion in the past two years.

Make personal transactions

Privacy-focused digital currencies such as Monero (XMR), Zcash (ZEC), and PIVX (PIVX) allow users to conduct anonymous financial transactions. This means that individuals can make money transfers without explaining why they are sending large amounts of money to the bank, from which sources and to whom, which can delay the transaction and lead to unnecessary bureaucratic processes. .

Send money other than cash

For example, blockchain startup SureRemit allows users to send cashless remittances from anywhere in the world to selected African countries. Africans in the diaspora can buy SureRemit’s local RMT tokens, which are then used to send non-cash remittances, such as mobile data top-ups or utility bills to loved ones in Africa, within the SureRemit app.

Get paid to publish content

Steemit, the first social media and incentive blogging platform, allows publishers to receive financial rewards in the form of cryptocurrency for publishing and hosting content by voting on high-quality content. Instead of taking their data and selling it to third parties like Facebook, Steemit empowers its users financially by rewarding them for their contribution to the platform. For this reason, Steemit has become especially popular in emerging markets with large numbers of users. Recently, social media app Taki has also been paying content creators with cryptocurrency.

Rent your hard drive space in the cloud

Decentralized blockchain-based cloud storage solutions like Storj allow users to earn cryptocurrency in exchange for renting hard disk storage space to those in need on a peer-to-peer basis. . Storj can be faster, cheaper and more secure than traditional cloud storage platforms. It’s faster because multiple machines serve your file simultaneously, cheaper because you’re renting people’s existing disk space instead of paying for a purpose-built data center, and safer because your file is both encrypted and sharded. No need to trust your files to any company, sensitive servers or employees.

Storj and other decentralized cloud storage solutions, such as Siacoin and Filecoin, not only provide a cheaper and more secure alternative to existing corporate cloud storage platforms, but also provide users with a new source of revenue.

Published by tsueyisiow.com

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