Cryptocurrency: From 0 to 60
“Bitcoin is so summer 2021.” That’s what many cryptocurrency naysayers are saying. In those glorious days of 2021, bitcoin was above $60K. NFTs were selling for millions of dollars, and Solana was at $260. Moreover, billions of dollars were being poured into crypto start-ups, and crypto kids were buying Lamborghinis. Then the cold recession winds hit, and the crypto winter of 2022 was real. Inflation was skyrocketing out of control, and then the FTX fiasco happened. Bitcoin fell below $17K, and Solana went to $8. “Is crypto even a thing anymore?” had become the common question of previous crypto enthusiasts.
Yet, with spring of 2023 only weeks away, we have seen a resurgence in the cryptocurrency markets. Bitcoin is now over $20K. Solana is above $20, and inflation is easing. The overall macroeconomic news has begun to brighten. Indeed, with the federal reserve returning to a more dovish posture, the economic tides may in fact be turning.
But why was crypto a thing anyway and why should we care? Besides the buzz and enthusiasm, what does crypto even do? Let’s take a look at the use cases for cryptocurrencies, as the crypto winter thaws.
Cryptocurrency: What is it good for?
Cryptocurrencies are digital or virtual tokens that use cryptography to secure transactions and control the creation of new units. The first and most well-known cryptocurrency is bitcoin. Created in 2009, bitcoin is the seminal cryptocurrency. However, there are currently thousands of cryptocurrencies to choose from. Each cryptocurrency has their own unique features and use cases. Here are some of the most common use cases for cryptocurrencies:
Cryptocurrencies may be used to make fast, secure and borderless payments. They offer an alternative to traditional payment methods, which can be slow and incur high fees. Merchants can accept payments in cryptocurrencies, and consumers can use their crypto wallets to make purchases. There is no need for the exchange of credit cards or cash.
Cryptocurrencies are a fast, secure way to send money overseas and across borders. Cryptocurrencies are easily convertible into local currencies. This allows for the easy transfer of money to people in different countries quickly and with low fees.
NFTs, or non-fungible tokens, are one-of-a-kind digital tokens that provide proof of ownership over digital assets. The technology allows for the ownership of all things digital.
Decentralized Finance (DeFi)
Cryptocurrencies allow for the decentralization of financial products and services.
Cryptocurrencies offer a way for users to place bets and play games anonymously. Anonymity is part of the game. This makes them appealing to users who live in countries where gambling is illegal or heavily regulated.
Some cryptocurrencies, such as Monero, are specifically designed to offer enhanced privacy features. They use advanced cryptography to hide the identities of the sender and recipient, and the amount of the transaction. This makes them appealing to users who value privacy and want to keep their financial transactions private.
Cryptocurrencies offer a way for people to make charitable donations directly, without having to go through intermediaries such as banks or payment processors. This makes it easier for donors to see how their donations are being used and reduces the risk of fraud or mismanagement.
Cryptocurrencies can be used to make micropayments. Micropayments are small payments for digital content or services. This makes it possible for content creators and service providers to monetize their work in new and innovative ways. For example, a musician could use a micropayment system to receive payments for individual songs, rather than relying on subscription-based streaming services.
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