After blockchain, cryptocurrency is the most phenomenal revolution of the 21st century. The crypto industry has introduced a new asset to the world that aspires to redefine the global economy- and for the better. Cryptocurrency is also one of the major technologies for the upcoming web 3.0 world order. Ironically, crypto had to face staunch criticisms for its Wild West nature- however, over time, the world has gradually come to embrace the extraordinary benefits of cryptocurrency. Cut to 2022, the world has discovered various ways how to use cryptocurrency.
Put simply, there are multiple ways to use cryptocurrency. The finance world has now started acknowledging the huge potential of crypto, thereby making its way into the mainstream finance world.
Different ways you can use cryptocurrency
Faster payment transaction
Did you know that businesses are able to garner 40% rise in sales by introducing crypto payments? Well, modern customers are aware of the benefits of crypto and they would really appreciate a merchant exploring a progressive tech.
One of the major benefits of crypto transactions is that it makes way for a faster mode of payment transaction. This is chiefly because crypto is a blockchain application that operates in a decentralized environment. A decentralized infrastructure eliminates the need of any 3rd party or middle-man in the transaction network. This direct P2P mode of payment transaction makes the process way faster than traditional payment systems.
Affordable payment system
The same feature of decentralization that makes crypto payments faster also makes them more affordable than traditional payment modes.
As mentioned above, crypto payment transactions eliminate the need for intermediaries. As a result, unlike the traditional payment system where you have to pay 3rd party fees- you don’t have to pay such charges for crypto-based payments as there is no intermediary in crypto payment.
Ability to access global market for small businesses
Some small businesses cannot afford to be ambitious and take their business to the world due to lack of capital. In the traditional finance market, it’s always expensive to cater to vendors and clients beyond the border given expensive charges associated with cross-border transactions. Also, the conventional form of cross-border transaction is a huge time consuming affair.
But, things are quicker and more economical with cryptocurrency- even in case of cross-border transactions. We have already discussed that crypto payments are processed without intermediary and that applies for cross-border payments as well. Thus, with crypto-based international transactions, you won’t need to pay those hefty 3rd party charges that are common with traditional cross-border transactions.
Besides, this is to stress here, that the value of crypto is universal. 1 BTC would command the same value in any country of the world. In regard to fiat, the value of a currency varies from one country to another. 1 USD in the USA is equivalent to almost 80 INR in India. Thus, if an Indian business has to source something from an American vendor, he would have to pay a high price because USD is higher in valuation than INR. But if the same deal happens through crypto, the business won’t have to pay a high price since the value of crypto is the same worldwide.
Also Read: buy bitcoins with a credit card
Democratization of finance
As of 2022, somewhat 1.4 billion are unbanked today, around the world. The problem is more dominant in the 3rd world countries where poverty is highly prevalent. There are two reasons behind this. First, a lot of people lack the money to reach out to banks. Then, another reason is, several people are unable to afford high bank charges given lack of financial support. Centralized institutions like banks generally favor the rich and hence poor people lag behind.
But, crypto was launched driven by the mission to democratize finance. The crypto industry has brought the entire process online. As a result, people don’t have to reach up to the bank to process transactions. They can execute the whole process online, from the comfort of their home. Also, with crypto, they won’t even have to pay intermediary charges – so that will make the process more economical for them.
According to several experts, crypto holds the potential to resolve the unbanked population crisis to a great extent.
High potential investment asset
Investment is another major way to use cryptocurrency.
The crypto industry is evolving fast and crypto coins are scaling up in prices. For example, although BTC is worth something around $20,000 after the May 2022 crash, the coin is poised to reach $100,000 by 2025 end quarter. Crypto world has brought an investment asset that has proven to offer proliferating growth. As of 2022, there are over 20,000 cryptos to choose from for investment.
Then, the major reason behind the escalating growth in crypto investments is that the asset ensures way higher ROI than other traditional investment assets. It’s mostly because of the wild volatile nature of the crypto market. Extreme volatility leads to frequent ups and downs, resulting in astronomical returns when the market swings upwards.
Some cryptos are used to be linked with real-life assets such as real estate to make investment easier for all levels of investors.
The main reason behind using crypto here is ease of liquidity and fragmentation. Cryptos can be divided into several fractions. When you link a crypto with an investment asset, say a property, you get the liberty to divide property into several parts. This way, investors don’t always need to shell out a small fortune to take part in the investment. Small-cap investors can very well foray into the investment scene by investing in just a part of the whole investment scheme.
Passive income opportunity
A relatively new introduction in the crypto sphere, this is another great way to use cryptocurrency.
PoS blockchains need crypto holdings to conduct staking processes- the process these platforms use to verify new blocks. For this, these platforms count on crypto holders. So, if you hold PoS cryptos, you can offer your cryptos for staking and earn passive income through staking rewards.