What Is Cryptocurrency Actually Used For? A Beginner Guide To Cryptocurrency
Cryptocurrency — often known as crypto — is a digital currency meant to serve as a medium of exchange.
It utilizes cryptography (the process of protecting communication under a third party) to encrypt and authenticate transactions, as well as to govern the generation of new units of a particular cryptocurrency.
Essentially, cryptocurrencies are restricted entries in a database that no one may modify until particular requirements are satisfied.
What are the real world uses of cryptocurrency?
Well, obviously you can earn passive income by investing in cryptocurrencies. But beside investment, here’s how you can utilize them:
You can perform a variety of things with cryptocurrencies, depending on the type. At its most fundamental level, a cryptocurrency asset is one that can be used to transfer value between individuals or to pay for products and services.
Each item has a monetary worth, which is frequently expressed in US dollars, which leads to another application: trading and investment. Apart from stablecoins, which attempt to mitigate cryptocurrency volatility by pegging an asset to something else, such as the US dollar, the majority of cryptocurrencies are continuously fluctuating in price. On exchanges, you can trade between cryptocurrencies and national currencies (referred to as fiat currencies), depending on the trading pairings offered on your preferred platform.
If you are a merchant, you may also take digital assets as payment directly or through a more convenient and capable payment processor or service. Certain businesses provide the option of immediately converting paid cryptocurrency to cash on the back end, while others offer crypto top-up debit cards that function identically to any other card used to pay for services or products.
Additionally, you have the option of mining cryptocurrency. Mining utilises your computer or other authorised hardware to assist in the operation of the networks that support crypto assets. Mining produces money and contributes to the validation of blockchain transactions by automatically and constantly running a function on your computer or hardware when it is configured.
Additionally, individuals may borrow crypto assets on a variety of sites and receive interest on their loaned assets. Decentralized finance, or DeFi, is a subset of the cryptocurrency industry. Numerous systems, powered by distributed ledger technology, enable the lending and borrowing of cryptocurrency without needing the user to subject to the control of a centralised authority. DeFi has additional facets, such as decentralised exchanges, or DEXs.
Practical Applications of Popular cryptocurrencies
Now we will see how different cryptocurrencies are being utilized in the real world.
How Cardano is helping common people in Africa
Cardano is the home of the Ada cryptocurrency, which enables the sending and receiving of digital money. This digital cash is the currency of the future, enabling quick, direct transactions that are guaranteed safe due to the use of encryption.
Cardano is more than a cryptocurrency; it is a technical platform capable of executing financial applications that are now utilised on a daily basis by individuals, organisations, and governments worldwide.
Corruption’s impact on Africa — Increased monopolisation of the market and politics. Low levels of democracy, low levels of public engagement, and low levels of political transparency have afflicted the continent, resulting in the institutional, economic, business, political, and social difficulties that Africa faces today. Africa has also experienced a number of problems throughout the years, including exclusion from the global economy, a scarcity of development funding, inadequate healthcare, inadequate infrastructure, and weak governance. The list goes on, albeit unfortunately, they are no longer newsworthy.
According to my assessment, the Cardano Blockchain may be the answer to the shaky systems that have been built in the majority of African nations. By introducing decentralised features, it would be possible to eliminate wasteful governance techniques and improve corporate operations. Here are a few examples of how this may be extremely beneficial to users:
- Supply Chains/Cross-Border
There are several intermediaries in the system, which has resulted in an increase in expenses and a decrease in return on investment. The adoption of blockchain technology in conjunction with smart contracts may assist in resolving such issues. Africa’s economy is based on exports of goods, agricultural products, and crude oil. However, the existing supply chain mechanisms are frequently inefficient.
- Regulation of the Energy Supply
Numerous firms are interested in developing energy infrastructure in Africa, such as solar panels or wind turbines. The only impediment is the possibility for abuse once the grid takes over the electricity. Blockchain technology has the potential to assist in resolving this issue by documenting all transactions and regulating supply in response to demand.
- Property and identity management/registration of land
Transfers of real estate property may be registered on a Cardano blockchain, enabling auditability for external parties and reducing administrative time and expenses. Banks will not grant loans without confirmation of land title, and they frequently distrust the paperwork due to their ease of forgery. By using an immutable blockchain to verify ownership, authorities can ensure that the land truly belongs to the owner and assist them in obtaining all advantages. This might have a substantial influence on land registry management by enabling information and data exchange between public agencies and commercial parties.
There are a few additional areas in Africa that may face disruption: education, voting systems, supply chains, and health care systems.
VeChain is chaning the supply Industry
Vechain technology was primarily created to solve the vulnerabilities that many businesses and enterprise owners experience, particularly during the transaction process.
It is divided into three parts. These include supply chain technology in real time, cryptocurrency, and the Vechain platform. Additionally, the creators of Vechain employed distributed ledger technology (DLT) to enhance product life cycle management and supply chain protocols. Vechain enables organisations to track a vast quantity of data and may be purchased via trading pairs.
One aspect that sets Vechain apart from other systems is its ability to combine centralisation and decentralisation. This enables users to benefit from high-speed data transfers, transparent information flows, and collaborative efficiency.
DOGE’s real-world use as currency for retail and services
Apart from bitcoin, Tesla CEO Elon Musk frequently mentions dogecoin in his tweets. The bitcoin competitor, sometimes referred to as the meme money or funny currency, is fast gaining popularity as a means of payment. The number of locations where dogecoin may be spent continues to grow.
Dogecoin is widely accessible because to its low price of less than $1. The coin is a popular choice for those interested in experimenting with cryptocurrency investment and payments. Where and how can you spend dogecoin if you have some in your crypto wallet?
Individuals may use dogecoin to make online purchases at merchants who accept it. Restaurants, internet travel companies, web hosting providers, and videogame stores all accept dogecoin payments.
On digital sites such as Reddit and Twitter, some users utilise dogecoin to tip their favourite content providers. Individuals who get the tips can use the alternative currency to make purchases or retain it as an investment. Dogecoin’s price increased by more than 130 percent in 2020, providing investors with significant rewards. The joke currency is performing even better as an investment in 2021, with a year-over-year increase of more than 860 percent.
Bitcoin Is the Strongest currency
Photo by André François McKenzie on Unsplash
Bitcoin is the world’s first truly decentralised digital money. This means, among other things, that it is totally digital and lacks a physical form.
Bitcoin can be transmitted instantly and securely from one location to another; all that is required is an internet connection. As a decentralised coin, the Bitcoin price is governed by supply and demand.
Bitcoin is a digital currency that is kept in digital addresses distributed over the Internet; it is a cryptographic coin built on encrypted technology (blockchain). Due to the decentralised nature of Bitcoin, it is a money that is not governed by any central authority, such as a government or bank.
Ether, which started in 2015, is presently the second-largest digital currency by market capitalization, behind only Bitcoin by a wide margin. As of January 2021, ether’s market capitalization is around 19% of Bitcoin’s.
Ethereum is a decentralised blockchain platform that has its own money, Ether (ETH) or Ethereum, as well as its own programming language, Solidity.
Ethereum is a decentralised public ledger that uses blockchain technology to verify and record transactions. Users of the network may build, publish, monetize, and utilise apps on the platform, and pay using the network’s Ether money. Insiders refer to the network’s decentralised applications as “dapps.”
Here are some facts undeniable about Ethereum
- Ethereum is an open-source blockchain platform that enables the development and sharing of commercial, financial, and entertainment applications.
- To utilise dapps, Ethereum users must pay a charge. The costs are referred to as “gas” since they fluctuate in accordance with the amount of computing power used.
- Ethereum has its own cryptocurrency, Ether, abbreviated as ETH.
- Its cryptocurrency is presently only second in market capitalization behind Bitcoin.