It’s not an exaggeration to say that cryptocurrency is booming. This is a time of extraordinary growth. Not only that. Web3, metaverse, and blockchain are becoming more mainstream every second. Many of them have unique cryptocurrency use cases in fintech.
Errna will help you find the answer to your burning question. These are the most popular cryptocurrency use cases worldwide. Some of these will likely remain the focus in 2022.
Here’s Most Popular Cryptocurrency Use Cases
1. Decentralized Digital Currency
Despite the avalanche of new technologies that are making headlines, the most important use case for crypto is its original purpose–Decentralized and independent digital currency. Blockchain has proved its usefulness, from simple exchange transactions to complex mining.
It is amazing in its nature, as well as the other benefits such as decentralization, privacy, security, and transaction costs. This attracted many investors, entrepreneurs, and tech-enthusiasts. The market was quickly flooded once word spread. Today, there are thousands of exchanges that handle millions of transactions every day. This growth is not slowing.
2. Banks, but Make it Crypto
Despite obvious differences between traditional and crypto banking, there is an intersection where fiat currencies and cryptocurrency meet. This is called crypto banking. It is possible to trade digital currencies with anyone who has an Internet connection and a smartphone. It is one of the important cryptocurrency use case.
The crypto bank is similar to financial institutions except they are digital asset- and currency-based and do not hold cash or stocks. The crypto craze is also being embraced by banking giants, who have added crypto savings and interest accounts to their services.
3. Give Us Tokens! – Asset Tokenization
While digital tokens offer many attractive features, we cannot say that they are a perfect solution. Cryptocurrency traders might encounter inconvenient liquidity. Inconsistent liquidity may cause price fluctuations or spikes in cryptocurrency prices. This is an indication of a volatile market that has low liquidity. How does the market deal with this issue?
Asset tokenization is a solution for specific cases. It solves liquidity issues in real-world assets.
It works in this way: Asset-backed tokens have intrinsic value because they are directly tied to a physical asset. This is best illustrated by real estate. Tokenizing a piece of real estate means that it can be broken down into smaller pieces, each one worth the same amount. Tokens are then available for investors to purchase and hold a fraction of the real estate’s value. This allows for the market to grow and includes a larger investor pool.
Each investor gains a proportional amount of the asset’s value if the ownership of an asset is broken down into smaller parts. Asset tokenization improves liquidity and liquidity of traditionally liquid assets. This helps with crypto liquidity problems and is a major cryptocurrency use case.
4. On-Chain Governance: Power to the Users
Cryptocurrency use cases as a way to govern policies? Yes, it’s possible! Some entities, such as private clubs and organizations, are always looking for new ways to grant users more power. This goal can be achieved by forming a DAO (decentralized autonomous organization). Members are granted voting rights, governance tokens, and the ability to deposit money into the organization.
On-chain governance is a system in which control is distributed among different stakeholders. These governance tokens can be used to grant stakeholders traditional management positions or the ability to modify entity protocol.
5. Smart Contracts – The Best Kind of Contracts
We have finally reached our favorite type of contract, smart contracts. It’s basically a digital form of paperless contract that provides many guarantees. These contracts are based on certain, agreed-upon terms. Smart contracts are useful for automating entire networks or actions. It is another cryptocurrency use case.
Automation is, in fact, the main benefit of smart contracts, regardless of the use case. It means that there will not be any interference. No third parties can alter this decision or agreement. Their value is enhanced by their incredible security. The encrypted data can’t be altered. All data is safe because smart contracts run on an immutable network.
Smart contracts are becoming more popular in many industries. More companies incorporate them into their finance, governance, and privacy processes. There may be more industries to add to the list. Smart contracts are the future.
In summary, it is crucial that we are able to participate in the fast-growing, digitalized world of cryptocurrency use cases. We should also consider it as soon as possible as crypto seems to be the future. Many industries are being disrupted by blockchain technology today though positively. These cryptocurrency use cases will boom in the future. Errna offers decentralized blockchain applications that you can use to serve your industry. Our expertise and ability to create customized blockchain-based apps that include digital tokens, smart contracts, and public and private Blockchain is a testament to our success.