Whether you love crypto or don’t understand it at all, you can’t deny the incredible growth that the cryptocurrency market has experienced.
The world’s first cryptocurrency, bitcoin, was launched in 2009. In the few short years since then, bitcoin evolved into an entire industry, with thousands of different cryptocurrencies, and a total market cap worth more than $3 trillion .
And crypto isn’t just an asset to hold, hoping for price appreciation. It’s a tool that you can utilize for many different purposes. The top crypto use cases go far beyond short-term trading or buying NFTs.
So what are the best uses for crypto? Is there more to this unique asset class than pure crypto hype? Keep reading below to learn why you might want to invest in crypto.
Most people who invest in crypto simply buy and hold, hoping to capture price appreciation over the course of a few months or years. And while this is a viable strategy, it doesn’t maximize your potential for gains.
Staking is a passive investing strategy that is similar to earning dividends on stocks. You get to hold your crypto, capturing any price appreciation. But by committing it to a staking pool, you also earn interest on any amount that you stake.
Staking is the process of participating in network security. You lock up a particular cryptocurrency, which allows it to run validator nodes. This is essentially a record of the blockchain, which verifies transactions and earns transaction fees from the network.
You receive these fees in the form of interest for as long as you keep your crypto staked.
Staking rates vary from anywhere from 2% to 15% based on the particular crypto you stake.
Another one of the most popular cryptos uses is lending. Functionally, crypto lending is very similar to staking. You add your funds to a larger pool while retaining control of your asset.
For as long as your crypto is in the pool, you earn interest. But with lending, the interest is coming from borrowers, not from network transaction fees.
When borrowers want to take out a crypto loan, they need to first put up collateral. Loans are over-collateralized. So if they put up $10,000 in bitcoin, they might be able to take out a loan of $7,500 or less.
That way, if they default on their loan, their collateral will ensure that lenders don’t lose any money. Since you aren’t lending to an individual borrower, you can withdraw your fund from the lending pool at any time.
On the borrowing side, crypto loans allow you to leverage your investments . If done right, you can safely use your current crypto holdings as liquidity to increase your exposure to a particular asset. But it does come with increased risk.
Yes, you can use crypto to buy NFTs. In fact, in most cases, you can only buy NFTs using crypto.
But even more important than buying NFTs is the opportunity for artists, musicians, and other types of creators, to receive proper compensation for their work.
By selling their work in the form of an NFT, artists can continually earn money in the form of automatic royalties.
When an NFT is minted on the blockchain, it uses a smart contract. This is essentially code that programs royalty payments into the token itself.
If the artist sets the royalty payment for 10%, then each time that NFT sells on the secondary market, regardless of which marketplace it sells on, the artist would automatically receive their 10% royalty in the form of cryptocurrency, directly in their crypto wallet.
Reward Content Creators
Along with artists and musicians, content creators are also benefiting from the rise of crypto. There are now platforms that reward the most helpful content creators with cryptocurrency.
Steemit is a popular social media and content curation platform. There are built-in incentives for creating and sharing the best content. Users get to vote on and share content on the platform, helping those creators earn rewards in the form of STEEM, the platform’s native cryptocurrency.
Reddit, the massive social networking platform, also has plans to release a crypto-based voting system. Those who provide the best responses to questions and queries will earn crypto based on the number of upvotes they receive.
And Twitter has recently released its tipping feature. This allows users to provide links to third-party payment providers so that their followers can tip them with cash or bitcoin.
Crypto purchases are nothing new. Retailers began accepting crypto as a form of payment back in 2013 and 2014.
But today, more and more companies are offering crypto payments, both in-store and online. This includes major retailers, like Lowes, Whole Foods, and Gamestop.
And it also includes big purchases. Tesla plans to accept bitcoin purchases of its electric vehicles. And it currently allows customers to purchase children’s ATVs using the meme token DogeCoin , thanks to Elon Musk’s interesting relationship with cryptocurrency.
In recent crypto news, we have started seeing more and more non-profits accepting cryptocurrency as a form of donation. But why is this becoming so popular?
Many wealthy individuals enjoy making charitable contributions, but often prefer to remain anonymous. However, when making donations online using a credit card or debit card, transactions aren’t actually anonymous.
You need to provide your personal information in order to send funds using traditional forms of payment.
But with crypto donations, there aren’t any payment details required. All you have to do to send money using cryptocurrency is copy and paste the recipient’s crypto wallet address.
When they receive payment, the only thing they see is the sender’s wallet address.
Crypto wallet addresses are long strings of characters. It’s near impossible to figure out who owns a particular wallet address, as they aren’t linked to personal information like a bank account or email address.
One of the most useful ways to use cryptocurrency is with peer-to-peer money transfers. In fact, that’s one of the reasons Bitcoin was created in the first place.
The founder of bitcoin called the cryptocurrency a “virtual, peer-to-peer currency” that would make it easy to send money to another individual, without a financial institution acting as a middle man.
This is particularly important when sending money abroad, as this has traditionally been very expensive, taking days to finally arrive in the recipient’s bank account.
With cryptocurrency, you can send any amount to any other crypto wallet on the planet. Depending on the actual cryptocurrency used, the transaction may cost fractions of a cent and can take as little as a few seconds.
Cryptocurrencies like Ethereum have such high network fees, that using them for peer-to-peer transfers isn’t a good idea. But you can send coins like LiteCoin, Bitcoin Cash, and Stellar fast and affordably.
The recipient might be able to utilize the cryptocurrency themselves or convert it to their native fiat currency using a cryptocurrency exchange available in their region.
Video games are one industry poised for a radical transformation in the wake of blockchain technology and cryptocurrency. Think about many of the popular video games.
To progress in the game, you often have to defeat enemies or find items, which can be sold for the games’ native currency. You then use that currency to buy new items, such as weapons or armour, in order to become a stronger player.
But traditional games that are disconnected from the blockchain using a fake currency, are limited only to that game. You can’t actually cash it out, and the only reward you earn has to stay within the video game.
But blockchain-based gaming is already here. Play-to-earn crypto games are those that utilize their own cryptocurrencies for in-game purchases.
So as you progress in the game, you don’t earn a fake currency, you earn cryptocurrency. You can use that to purchase more items in the game. Or you can visit a cryptocurrency exchange, swap the in-game currency for cash, and transfer it to your bank account.
With crypto-based gaming, you can actually make money playing games.
It’s important to point out that play-to-earn blockchain-based games don’t benefit exclusively from cryptocurrency. Most also utilize NFTs, or non-fungible tokens, as well.
NFTs represent the in-game items that you can use and collect, while cryptocurrency is what you purchase them with. In many of the current games, NFTs can be earned as you complete tasks in the game, or defeat opponents.
Those NFTs can then be traded with other players, or sold in exchange for crypto. Once again, blockchain gaming creates an opportunity to earn while you play.
Popular crypto and NFT games include Axie Infinity, Decentraland, The Sandbox, and a number of others.
Purchase or Rent Out Spare Hard Drive Space
Various platforms are available that allow those with extra space on their hard drives to rent out that storage space to others. Storj, Siacoin, and Filecoin are all options for those looking to earn crypto by renting out spare storage space.
Those looking to buy storage space benefit from faster data transmission and cheaper access to external storage space compared with expensive data centers.
Files are encrypted and shredded, making it safe for both parties.
Just a Few of the Top Crypto Use Cases
These are just a few examples of the top crypto use cases available today. It’s also just the beginning of what cryptocurrency is capable of accomplishing.
Cryptocurrency and blockchain technology is ushering in a financial and technological revolution. We can expect to see many industries begin integrating cryptocurrency support.
It’s a new and exciting asset class and one that may deserve a place in your portfolio. Wondering what else should be in your portfolio, for a balanced and diversified basket?
Check out these portfolio options today to ensure you aren’t over or underexposed to any single asset class.