Cryptocurrencies, and their popularity, have grown rapidly over the years. While cryptos were originally introduced as a peer-to-peer payment system, today you will find that these digital assets have extended far beyond their original use. That is, cryptocurrencies can be used for a lot more than simply paying for services and goods. Here we will explore how crypto assets have evolved and we will reveal the extent of the fintech revolution that has occurred over the last few years.
Buying With Bitcoin
Let us start with the basics. Bitcoin was originally designed as a peer-to-peer electronic cash system. Since its introduction and for the first 5 years of its existence in the market, Bitcoin lived up to its design and purpose. As time passed and as network fees increased, many merchants were forced to stop supporting Bitcoin and a shift in how this digital coin was used started taking place. Bitcoin was no longer only viewed as a medium of exchange, but also as a store of value. In 2017, Bitcoin Cash was introduced, which was a fork of Bitcoin. Since then, the Bitcoin Cash network has been successful in facilitating low-cost and fast payments. Today, thousands of merchants around the world accept Bitcoin Cash online and in store.
Cryptos and Nonprofits
Cryptocurrencies are also being used by nonprofit organizations. As the price of Bitcoin and other cryptos increases, nonprofits are turning to digital currencies as a new source of revenue. Some nonprofits are even taking this one step further by using cryptos in order to offer more benefits to their donors, while becoming more stable and transparent. To put it into perspective, over the last few years, hundreds of millions of dollars in cryptos have been donated to nonprofit organizations. The main reason for this is the massive tax incentive its offers to donors. That is, when a donor transfers cryptos to a nonprofit, you pay no capital gains tax and can write off the full amount of the cryptocurrency donation.
Saving and Lending
Earning on savings is another use case that is seen with cryptocurrencies and it is a growing trend that many crypto users are taking up. This is where you are able to earn interest on your crypto assets savings. Some exchanges have already launched their savings system where your stable coins enable you to earn interest. A good example is on the Dai exchange with their Dai Savings Rate. In addition to this, exchanges such as Ethereum that have several stable coins, are allowing their users to save and to diversify their holdings in order to reduce any losses. Lending is another important part of the growing decentralized finance (DeFi) movement. Here, users are able to collateralize fiat loans against cryptocurrency and vice-versa. Some examples include Salt and Nexo, which allow people to obtain a fiat loan in exchange for locking up their digital currencies.
Gaming and Gambling
Games and gambling platforms are another use case for cryptocurrencies. Many of these adapted games offer in-game collectibles and it is possible to trade these assets with other players and to gain full ownership of the assets. These collectible assets represent a growing vertical within the cryptocurrency space and it is expected to become more embedded in the future, especially in eSports and virtual reality gaming.
It is clearly evident that as time goes by, the use cases of cryptocurrencies is evolving and growing. We can definitely expect more growth as we move into 2020.