Initially designed as an alternative to traditional currencies, cryptocurrencies have evolved to offer a wide range of applications across various industries. This includes digital payment, smart contracts, and decentralized finance among others. Many of these benefits are actively enjoyed in the financial industry and other industries existing today. From asset tokenization to crypto staking, we will walk you through 10 crypto use cases you should know today.
Top cryptocurrency use cases
Currently, there are over 20,000 different kinds of cryptocurrencies in existence. Here are 10 Crypto use cases you should know:
1. Decentralised digital currency
The most important use case of cryptocurrencies is that these digital coins have supplied the world with a decentralized digital currency. Essentially, this means that crypto is not controlled or managed by the government and third parties like banks or other financial organizations. This affords a degree of freedom that traditional currencies cannot.
2. Crypto banking
World-class banks like JP Morgan and Barclays have designed their numerous banking services to handle cryptocurrencies. This shift has birthed a unique system known as crypto banking. Essentially, these banks now offer their customers crypto interest accounts and savings accounts.
Basically, just as traditional banks keep cash, stocks, and other vital financial assets for their customers, crypto banks help to reserve their customers’ crypto assets and fiat currencies.
3. Crypto staking
Beyond doubts, Crypto staking is currently one of the best ways you can put your tokens to good use and earn passive income from it. Essentially, Proof-of-Stake (PoS) blockchains enable you to stake your digital coins and partake in its consensus mechanism. In return, you are allowed to validate a block on that chain and gain rewards. The few cryptocurrencies you can stake include:
- Ethereum (ETH)
- Cardano (ADA)
- Solana (SOL)
- Avalanche (AVAX)
- Polkadot (DOT)
- Luna (LUNA)
When it comes to investing your coins safely, you can rely on PoS blockchain via crypto staking. Nothing can go wrong during the process because the network compels all participants to lock away a specific amount of its native tokens. So it protects against any malicious move on that blockchain.
4. Online payments
Cryptocurrencies have enhanced the speed of international payments and lowered the transaction costs. It has also helped in securing the identities of users who want to do a transfer anonymously.
Additionally, you can also use your tokens to pay for goods and services at stores that accept crypto as a form of payment or fund a virtual card with stablecoins to make payments internationally. Currently, world-class enterprises like Pepsi, Mastercard, Starbucks, Tesla, Visa, and many more accept cryptocurrencies as a valid payment method.
5. Asset tokenisation
Cryptocurrencies permit you to tokenize your material assets and unite them into digital tokens. Hence, you can tokenize real estate, stocks, commodities, art, and even copyrights. Essentially, the process of asset digitization helps to improve the market liquidity of different physical assets. Asset tokenization increases the participation of real-world investors who would have otherwise been incapable of investing in crypto due to inadequate cash.
Also, by splitting up the ownership of commodities into numerous pieces, investors can earn a ratio of the value of assets they possess.
6. On-chain governance
Cryptocurrencies offer users a better and more refined way to enforce fresh policies on a network. Basically, blockchains have DAOs (Decentralised Autonomous Organizations), which allow you to stake tokens in exchange for voting privileges. Blockchain developers call this process Governance Token.
The crypto community on a blockchain is also free to distribute ruling power among its various stakeholders via these tokens. This is known as On-Chain Governance. By possessing governance tokens, you acquire the authority to modify a network’s protocol.
7. Smart contracts
Smart contracts are unique lines of code that perform a transaction if a predetermined set of terms and conditions are satisfied among the affiliated parties. Basically, it allows users to automate different actions and functionalities.
The best part about smart contracts is that there are no disruptions or interruptions in the enactment of a process whenever the underlying terms are satisfied. Also, no third party has the power to change or modify the agreement or decision of the contract.
Since smart contracts are typically blockchain-based, the data they yield is immutable, and no person can update or change it in any way.
8. Crypto gaming
Over the past few years, the crypto gaming industry has witnessed a boom. Basically, gamers around the world are now earning in-game commodities in the form of NFTs and trading and selling these items based on their demand.
These P2E crypto games can be a great way to use your crypto assets and attain unlimited hours of fun and NFTs in the form of your reward. Also, you can earn digital coins as a reward through these games.
9. Borrowing and lending
One of the 10 crypto use cases you should know is borrowing and lending. You can use your tongue to lend or borrow money through Decentralised Finance (DeFi) applications.
Since crypto has no boundaries, you can easily borrow or lend startup capital from any region in the world with the use of your crypto assets. These DeFi apps also help to reduce the time and the loads of paperwork you require to fill out while trying to obtain a loan from a traditional bank.
10. NFTs
NFTs, short for non-fungible tokens, are one of the most profitable investments you can make with your cryptocurrencies. Essentially, NFTs are distinctive cryptographic tokens that exist on a blockchain that people cannot duplicate. These unique digital tokens can characterize a variety of items, such as:
- Artwork
- Digital artwork
- Real estate
- Sportscards
- Rare items and much more
Which Cryptos have the best use case?
Ethereum currently has the highest utility and greatest number of real-world active use cases of any leading crypto. Nonetheless, Polygon is leading when it comes to the most resourceful applications of blockchain technology by world-class brands and companies.
Although we’ve listed the 10 crypto use cases you should know, bear in mind that these are only a few. There would be a continuous adoption of digital coins in daily use over time. Countries like El Salvador and the Central African Republic (CAR) have taken on Bitcoin as a legal tender and we expect to see more countries follow suit in no time.
From recent happenings, it is obvious that as worldwide acceptance of digital currencies continues to grow and blockchain technology sees more adoption, there will be a significant boost in the use of crypto coins.
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