Cryptocurrency, commonly referred to as “crypto,” is a digital asset that may be exchanged without the need for a central monetary authority, such as a government or bank. Investopedia defines a cryptocurrency as “digital or virtual money that is safeguarded by encryption”. This makes the uses of cryptocurrency incredibly difficult to falsify or double-spend. Many cryptocurrencies are decentralized networks built on blockchain technology, which is a distributed ledger backed by a network of computers.
Bitcoin, Ethereum, and Litecoin are examples of some of the most well-known cryptocurrencies. These digital coins may utilize in a myriad of ways, including to make purchases, investments, and online trades. Next, jump a bit deeper into four practical uses of cryptocurrencies!
Booking a Getaway with Crypto
The travel and tourism industry was among the first to welcome the use of cryptocurrencies. Massive travel platforms such as Airbnb and Expedia are already allowing customers to pay for hotel bookings using Bitcoin, while some agencies even provide discounts to customers who pay in cryptocurrency. Destinia, a popular hotel and flight booking service founded in 2001, tries to attract crypto transactions by offering discounts to BTC users.
Crypto enables travelers to make payments with a single, transparent system that bypasses gatekeepers and expensive third parties, thus making the experience direct, fast, and safe. Several airlines are on board the crypto wagon, too, ranging from the popular AirBaltic, Norwegian Air, and LOT Polish to Richard Branson’s Virgin Galactic.
Sending and Receiving Payments
One of the most well-known uses of cryptocurrency is for sending and receiving payments at low cost and high speed. Consumers can use crypto to conduct transactions without the involvement of a third party, such as a bank or credit union. It democratizes the economic field by allowing people to transact freely and securely. According to a 2020 survey by HSB, 36% of small to medium-sized businesses in the US accept Bitcoin. From major food outlets like Starbucks, KFC, and Burger King to companies such as Microsoft and game developers like Big Fish Games accept payments in crypto. There is a rise in cryptocurrency-based games due to the implementation of blockchain technology which, once again, streamlines the payment process. Along with online games, several casinos have initiated the use of cryptocurrency as part of their operations, elevating the online gambling experience and allowing players to earn bonuses as an additional reward for playing.
Investing in Luxury Items
Gucci, Off-White, Equinox, and Philipp Plein are just a few high-end labels that have entered the crypto market, demonstrating the currency’s growing importance in the luxury sector. Nowadays, coins such as Bitcoin are accepted as a payment method by a growing number of companies producing and selling high-end products. BitDials, for instance, is an online luxury merchant that accepts different forms of cryptocurrencies in exchange for Rolexes, Patek Philippes, and other high-end timepieces. Several high-end jewelry shops have also teamed up with other crypto payment gateways to accept crypto as an in-store payment method, in addition to online.
Investing in Start-ups
The rise in the uses of cryptocurrencies has revolutionized the way early-stage enterprises raise capital. Since the advent of initial coin offerings, startups around the world have benefited from the ability to raise assets quickly and cheaply from a large pool of investors (ICOs). ICOs allow startups to raise capital by offering a newly created digital token for sale to the project’s early backers in exchange for established cryptocurrencies like Bitcoin (BTC) or Ether (ETH).
With over 800 orders totaling $126,000 in BTC coming in during the first twenty-two hours alone, Utah-based Overstock made history in 2014 by becoming the first retailer to accept Bitcoin as a form of payment. Only seasoned venture capitalists had access to investment opportunities in the past, but with the rise of cryptocurrencies, a much wider range of investors now has access to these opportunities.
