Ever wondered what’s all the hype about cryptocurrencies? what’s in it for you? well, you’re not alone. Most people, before they use cryptocurrencies, are skeptical about their potential.
The pseudonymous Satoshi Nakamoto created the first-ever cryptocurrency, Bitcoin, to make the financial system decentralized, faster, and more secure. With time, however, crypto pioneers came up with several other use cases to make our lives easier.
What Prompted the Creation of Cryptocurrencies
In today’s banking system, banks leverage on the money we hold with them and share a part of their profit with us in the form of interest. In this system, you and I don’t have complete control over our own money. Besides, the concentration of power in the hands of a countable few individuals has been the cause for many major banking frauds and scams.
Now, imagine a system that does not rely on any individual or central authority. You do not even need to rely on a central entity to transfer funds to your friends or relatives. That’s what Bitcoin is — a decentralized, peer-to-peer payment system.
But as you know, innovation is an ongoing process. Since the launch of Bitcoin in 2009, crypto pioneers have designed several cryptocurrencies with varied use cases across industries.
Cryptocurrency use cases: The Path to True Financial Freedom
If you had to urgently send $1,000 to a friend who lives in a different country, it would be a nightmare to do it through a banking system. After all, urgent situations can’t wait three to seven days for a payment to settle.
With cryptocurrencies such as Bitcoin Bitcoin (BTC), Ether (ETH), or XRP, you can send the money to your friend while you both are still on the call. It’s that fast. Bitcoin takes about 10 minutes to settle transactions, but there are other cryptocurrencies that can reach your friend’s account almost instantly.
Store of Value
Apart from being a highly efficient means of payment, cryptocurrencies are also a safer store of value. The traditional currencies we use are inflammatory, i.e., they lose value over time. That’s the reason why you pay much more for a dozen eggs today than what you paid 10 or 20 years ago. Eggs are not getting expensive. Your money is losing value.
Cryptocurrencies, on the other hand, employ better supply mechanisms that restrict inflation and may increase in value with rising demand. Due to this, when you store your funds in cryptocurrencies, they can potentially gain value instead of losing value over time.
Lending and Borrowing
If you’ve ever stood in a queue or waited to get your paperwork done to get a loan, you know it’s a painful process. What if you could get a loan digitally, without even having to fill a single form or sign a contract? That’d be amazing, right?
Decentralized finance applications have disintermediated the lending and borrowing process. They allow individuals to lend and borrow funds almost instantly using cryptocurrencies. In addition, as cryptocurrencies are borderless currencies, you can lend or borrow from these platforms irrespective of where you live.
The advent of cryptocurrencies has made it possible to tokenize real-world assets. Anything from copyrights to real estate and art pieces to commodities can be tokenized and represented in form of a cryptocurrency token. For example, using blockchain, we can tokenize a luxury real estate property worth $10 million and represent it as one million crypto tokens worth $10. This adds more liquidity to an otherwise illiquid asset and makes the exchange of even non-liquid assets more convenient. Additionally, the buying and selling of these assets become cost-effective, fast, and more transparent.
Cryptocurrencies, in the form of non-fungible tokens (NFTs), are already disrupting the gaming industry. In the gaming world, NFTs are crypto tokens that represent a unique digital asset inside a game. As each NFT represents something unique, they have different values and are not interchangeable. This gives every user a completely authentic in-game item, the likes of which is owned by no one but them. Digital cats called Crypto Kitties are the most famous example of blockchain-based NFTs.
The centralized cloud storage platforms have many major shortcomings from high fees to server outages. This has paved the way for decentralized storage created through the use of blockchain. In such a system, anyone can rent out their free storage space.
If you had 250 GB free on your disk, you could rent it on a decentralized storage platform such as Filecoin and earn a passive income from it. People who opt to buy your storage space would pay you in the storage platform’s native cryptocurrency.
Making Crypto Easy for All
Despite a wide range of use cases, cryptocurrencies are often seen as a complex form of money. With the right information and solutions, it can be extremely easy to own, spend, and manage. Maybe, easier than the currency you use today.
Through its hardware wallet and application, Ledger aims to help you reap the benefits of cryptocurrencies in a user-friendly and secure environment. By educating more people about cryptocurrencies, Ledger will also enable more people to claim ownership of their money and open access to the above-mentioned use cases. This will help a wider population to embark on their journey to financial independence.