Since their invention, cryptocurrency assets have come a long way. Originated as a peer-to-peer payment system, digital currency expanded spheres of usage that have spread far beyond its original purpose. Today, few people will argue that the field of using digital currencies is much broader and larger than simple payment for goods and services. Below are several scenarios for using crypto assets that demonstrate the scale of the FinTech revolution.
1. Digital Money
Being perceived as a peer-to-peer e-money system, Bitcoin developed following this idea for the first five years. Before gaining popularity, it was used in the dark markets and gambling sites to play slots like Mega Vault Millionaire anonymously. And even then, it was accepted as a means of payment for various goods by hundreds of sellers and early adopters of cryptocurrencies.
However, along with the growing popularity of Bitcoin, transaction fees began to rise, forcing many sellers to abandon the cryptocurrency. Then Bitcoin began to be positioned as a valuable resource rather than a means of exchange. It became unprofitable to use Bitcoin for small payments, so the BCH network has been used to make fast and inexpensive payments, with thousands of stores already accepting this cryptocurrency.
2. Programmable Cash
Smart contracts are blockchain-based executable code that is triggered when a certain predetermined condition is met. Even though many people associate smart contracts with the Ethereum network, most other cryptocurrency networks also have similar functionality, including the Bitcoin network. As Bitcoin’s dominance over other cryptocurrency assets has increased, the interest in building less decentralized alternatives (such as Tron and EOS) appeared.
Lending is one of the most important uses of cryptocurrencies helping people provide collateral for fiat loans with their cryptocurrencies and vice versa. Hundreds of millions of dollars in assets are currently locked in lending protocols. Other decentralized solutions allow people to get fiat credit in exchange for blocking their cryptocurrency assets. Users of such services also have the opportunity to receive interest accrued for blocking cryptocurrencies in such credit protocols.
Non-fungible tokens (NFT) are unique digital assets. Usually, these are various collectibles used in computer games. This quality provides token holders the opportunity to trade or exchange them with other community members and also guarantees absolute ownership of the collectible. However, NFT tokens cannot be called completely decentralized, since their value depends on a central authority that controls the virtual world in which this token is in circulation. On the other hand, collectible tokens represent a fairly large share of the crypto space, and NFTs will likely be used in e-sports and virtual reality in the future.
Bitcoin continues to prove its versatility. Over the ten years of its existence, the cryptocurrency space has significantly developed, and crypto assets will undoubtedly show us new functions that we do not yet know about.