5 Crypto Uses Cases to Look Out For!

Crypto DeFi

Bitcoin entered the market as the first cryptocurrency. Since then there has been growing interest in this investment model. The blockchain technology and decentralized finance model work hand in hand to make cryptocurrency an effective investment model. Over the years, there has also been increasing in the total number of cryptos available in the global market. Along with the increase in cryptocurrencies, there has also been a large increase in crypto exchanges and other subsidiary activities. Today the global market capitalization of cryptocurrency stands at $2 trillion. The idea of cryptocurrency is now taking another leap and making a diversified investment portfolio. Both young and experienced investors have shown their interest in this investment model. A recent study conducted by a global crypto exchange also pointed out that there is an increase in women investors as well. Apart from that, you can check how Bitcoin prevents double-spending.

With more than 4000+ cryptocurrencies currently ruling the market, let us also look at five use cases of cryptocurrencies. These use cases will remain a focus area in the coming years.

Decentralized finance model

Blockchain technology came into existence because of cryptocurrency. Along with all other benefits, blockchain technology offers many benefits. Other than cryptocurrency utility, there are several companies adopting blockchain technology. While there was a complex mining process, the same is simplified today because of technical advances in a blockchain platform. Additionally, cryptocurrencies have proved their utility in many aspects. It includes minimal transaction charges, the privacy of transactions, etc.

This seamless transaction model has attracted diversified investors including entrepreneurs, tech-enthusiasts, and young investors. The trend for this investment model is increasing daily, and the volume of transactions is converting to millions daily.

There is also an increase in peer-to-peer transactions using cryptos. From an investment perspective, India stands first in total users who have invested in cryptos. UK and US follow the list as second and third.

Allows for crypto banking

Despite the growing acceptance of the traditional banking system, some countries do not have access to traditional banking system. For such places, the Bitcoin and cryptocurrencies banking systems work as a boon. When there is a convergence between traditional and cryptocurrencies, that’s crypto banking for you. This is also popular amongst investors across the globe. This banking model allows any investor to undertake transactions using a smartphone and stable internet connectivity.

Similar to the traditional banking system, crypto banks also can store digital assets for a definite period. A few popular banking companies like JP Morgan Chase, Goldman Sachs, and Barclays have started utilizing this investment model. These key players have adopted this model to store their digital assets. These companies also offer crypto interests like the traditional banking system.

Crypto tokens backed with asset value

Cryptocurrencies in simple terms are asset-backed tokens. The liquidity here refers to how easily and quickly an asset can be purchased and sold. The time and effort that goes into liquidating this asset are minimized. By utilizing these tokens, users are allowed to make their purchases on real-world assets. This could range from merchandise to an automobile asset or real estate.

Built-in governance

Cryptocurrencies are also utilized to build better governance models. These policies are extremely useful in many areas. A few to name are clubs, organizations, etc.

Many companies are trying to find better alternatives. These alternatives work to provide their investors with more power and technological advances. One easy method of gaining this power to individual users is by using a decentralized autonomous organization. This model is also known as the on-chain governance method. The cryptos and the built-in working model provide users with voting powers and benefits.

Executing smart contracts

Cryptocurrencies can run an algorithm. Once the algorithm and working model match then a paperless digital code is generated. This paperless code is known as smart contracts. These smart contracts have many benefits. One such benefit is the ability to execute contracts on their own. There is no third party involved in any of these transactions. There is an encryption philosophy utilized by the blockchain platform. This philosophy or algorithm cannot be altered. Additionally, the data is also completely safe and works on a chain of networks. Ethereum was the first crypto to use this technology. This came as a fix to a few flaws of Bitcoin.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.