Cryptocurrency is a digital or virtual asset designed to function as a medium of exchange. It relies on something called “cryptography” to verify and secure transactions, which is also responsible for the creation of new units of a specific cryptocurrency. Examples include Bitcoin, Ethereum, and Litecoin.
Cryptocurrency has become a versatile tool for many people since its inception. In this article, we are going to take a look at some of the interesting ways that cryptocurrency has been put to use.
Cryptocurrency is a digital form of currency that operates on a decentralized system, meaning it is not controlled by a central authority like a government or bank. Instead, cryptocurrency transactions are verified and processed through a network of computers across the world.
When a person wants to make a transaction, the request is verified by a network of computers called nodes. Each node checks the transaction against a set of rules encoded in the network’s software, such as ensuring the person making the transaction has enough funds.
Once a transaction is verified, it is added to a public ledger, known as a blockchain. The blockchain is a record of all transactions that have taken place on the network and is updated in real-time. This ensures that the currency remains decentralized and cannot be manipulated by a central authority.
The transparency, security, and freedom that such a system creates are revolutionary, which is why you keep hearing the word “crypto” and “Blockchain” everywhere. Sure one reason is that people try to hype it up, but it does have some legitimate benefits as well.
Now that we have understood how the system works, let’s look at how cryptocurrency is often used.
One of the most obvious uses of cryptocurrency is as a means of payment. Due to its decentralized nature, transactions are made directly between two parties without the need for intermediaries such as banks.
This makes it an attractive option for people who are looking for faster and cheaper transaction methods, especially for international transfers. For most people, this doesn’t seem like a very useful tool since conventional payment modes are very smooth.
But the power of banks when it comes to transactions is scary. There have been situations where people have been stopped from using their own money due to politics.
The truck drivers protesting Covid-19 regulations in Canada or Kanye West being locked out of using his funds on ApplePay are just a few examples of this. Regardless of whether you agree with them or not, cryptocurrency puts your money back in your hands, and that is a good thing.
Cryptocurrency has become an increasingly popular means of payment for both online shopping and gambling. Surveillance has become so built into our everyday lives that we don’t even notice it anymore, but it very much exists. Your purchase history is often used to build a profile of your online behavior.
Using cryptocurrency to make purchases is one way to take back your privacy.
Similarly, cryptocurrency has become a popular means of payment for online gambling. With the rise of crypto casinos, players now have access to a wide range of games, including traditional casino games and sports betting. There are two main reasons why cryptocurrency is used widely here.
Firstly, it allows players to transcend borders, and players can play and pay from anywhere in the world. Normally, banks and payment gateways make it extremely to have seamless international transactions, but cryptocurrency manages to unite players quite easily.
Secondly, transactions are extremely fast. There are no annoying rules that have you wait a set number of days or rules on the amount that you can withdraw. This makes it very popular among fans of crypto casinos.
On top of that, cryptocurrency provides a great deal of privacy for gamblers. With traditional payment methods, players often have to reveal their personal information to gambling sites. This isn’t the case when using cryptocurrency and crypto casinos.
Another popular use of cryptocurrency is as an investment. The value of cryptocurrencies, such as Bitcoin, can be volatile, and many people have made significant profits by investing in them. Some see cryptocurrencies as a hedge against inflation, while others see them as a speculative investment.
Several people who started with a few hundred dollars worth of investment managed to become millionaires because of how high the returns can be. A common strategy that a lot of crypto investors used was “HODL.” Humorously standing for “Hold on for dear life.”
This was the term used when people wouldn’t sell their cryptocurrencies, even when they noticed huge dips and losses. They believed that it was only a temporary setback and that things would bounce back even higher. At times, this was true, but others found themselves dangerously close to losing all that investments.
It’s an investment method that has an extremely high risk-to-reward ratio, but with governments starting to impose regulations, it seems like the gold rush days are over.
For charitable philanthropists, donating with cryptocurrency can be the best way for them to maintain their privacy when they wish to remain anonymous. Sure, a lot of charities respect such wishes, but it’s never a guarantee. Sending money with cryptocurrency gives donors a lot more peace of mind.
Another reason why donors may prefer to donate via cryptocurrency is that it is extremely tax efficient.
From the perspective of NGOs and those who receive donations, cryptocurrency allows them to collect donations without the traditional barriers of international transactions that we mentioned earlier. They can receive donations from any part of the world as long as the donor has an internet connection and cryptocurrency to send.
To sum things up, cryptocurrency is one of the most useful advancements in digital currency that we have seen. The freedom it provides allows people to transcend borders and restrictions of all kinds. The one downside to all of this is that governments are starting to look into cryptocurrency and trying to regulate it.
The more regulations, the more likely it is that the returns are going to mellow out. Some people believe cryptocurrency is the way of the future, while others believe it’s a dangerous tool. Regardless of what one thinks, it is certainly a very interesting concept that isn’t going away anytime soon.
Caroline is doing her graduation in IT from the University of South California but keens to work as a freelance blogger. She loves to write on the latest information about IoT, technology, and business. She has innovative ideas and shares her experience with her readers.
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