This video seeks to explain The Use Cases of Crypto with simple everyday terminologies. Very convenient for Absolute Beginners and people looking to familiarize themselves with new developments in the industry. @bitbyday got you covered.
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. From increasing opportunities for financial freedom to providing emergency funds during times of crisis, crypto has multiple use cases that support critical causes and individual empowerment.
Here are six of the most important use cases for cryptocurrencies:
Number one is Digital Payments
a. Peer-to-Peer Transactions:
Cryptocurrencies like Bitcoin and Litecoin enable individuals to send money directly to one another without the need for traditional financial intermediaries like banks. This is especially valuable for cross-border transactions, as it can be faster and cheaper than traditional methods.
b. Online Purchases:
Many online merchants and businesses now accept cryptocurrencies as a form of payment. This provides an alternative payment method for users who prefer to use digital assets. Bitcoin and other crypto assets like dogecoin are being used for payment of goods and services both online and physically. Tesla, NBA’s Mavericks, and many other companies now accept dogecoin as payment for goods & services.
Number two is Store of Value:
Cryptocurrencies are often seen as a store of value, similar to gold. Bitcoin serve as a compelling store of value due to several key attributes. Firstly, its limited supply, exemplified by Bitcoin’s capped 21 million coins, makes them resistant to inflation, in contrast to fiat currencies that can be endlessly printed.
This scarcity is a significant draw for investors looking to preserve their wealth over the long term.
Secondly, cryptocurrencies offer global accessibility, allowing anyone with an internet connection to participate. This inclusivity is particularly beneficial in regions with unstable or inflationary fiat currencies, offering a secure alternative store of value.
Thirdly Smart Contracts and Decentralized Applications (DApps):
Ethereum and Other Blockchain Platforms: Ethereum introduced the concept of smart contracts, self-executing agreements with the terms directly written into codes. This has led to the development of decentralized applications (DApps) that can perform various functions without the need for intermediaries.
These DApps can be used for decentralized finance (DeFi), gaming, voting, and more. 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 decentralized applications (DApps), the popularization of smart contracts and introduction of the ERC20 standard for tokens, the Ethereum network currently provides the world’s leading platform for distributed computing.
Number four is Banking the Unbanked:
Since Bitcoin and other cryptocurrencies are decentralized, people who own crypto have a means to pursue prosperity, own property, and even buy essentials such as food and water in places that are suffering from hyperinflation or political instability.
Number five is Tokenization of Assets:
Real Estate, Art, and Securities: Cryptocurrencies enable the fractional ownership and trading of traditionally illiquid assets like real estate, art, and securities.
This process, known as tokenization, can make it easier for investors to diversify their portfolios and access a wider range of assets.
And lastly Privacy and Security:
a. Enhanced Privacy:
There are many situations where financial transactions and other online activities require privacy, and in many countries, privacy is a luxury. It’s more difficult than ever to ensure anonymity and circumvent surveillance in necessary instances.
Crypto solutions such as the Lightning Network and certain wallets group can mix transactions together to help mask individual identities. Decentralized IDs that use blockchain technology protect the anonymity of users and can help people safekeep aspects of their identity.
Many prefer to make transactions today with cryptocurrency as it cannot be traced by anyone.
b. Security and Ownership:
Blockchain technology enables cryptocurrencies to provide a secure and tamper-resistant way to record ownership of assets and verifying the authenticity of digital or physical goods. This can help reduce fraud and counterfeiting.
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