Payments and Other Functions of Cryptocurrency

Cryptocurrencies are widely considered high-risk investments capable of yielding massive returns. Back in 2009, when the first cryptocurrency; Bitcoin was invented by Satoshi Nakamoto, it was to serve the purpose of being a means of exchange in day-to-day transactions, replacing the general currencies eventually. The decentralization of the technology, alongside its security and efficiency has brought about the implementation of the technology in several aspects, while also being a reliable means of exchange. As the evolution of cryptocurrency has advanced, there have been different use cases in present day. Here are some of the functions cryptocurrenciesserve:

• Money Transfer

A commonly known application of cryptocurrency is sending and receiving money. An increasing interest is being shown by banks and other major investors. This is owing to cryptocurrency using apeer-to-peer system meaning crypto account owners can immediately send and receive payments all over the world at high speed, without needing approval from an external source, and without the exuberant fees usually associated with traditional banking transfers. Alitecoin transaction close to $100 million recently done took under three minutes to process and the user who sent it only had to pay 40 cents in fees. If this transfer had gone through the traditional banking system, it would have taken days or longer, subjecting the sender to all sorts of queries, and the fees would have been really high. The low fees associated with transactions using digital currencies make them excellent payment systems for international money transfers.

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• Store of Wealth

One more interesting application of cryptocurrency is its use as an alternative store of wealth. Freezing of assets and bank accounts happen are more rampant than people are aware of. Users are put in situations where they have no access to funds when this happens, sometimes without doing anything wrong. Government decrees, bank restrictions, among others, are commonly found to be behind this act. Cryptocurrencies act as a secure store of wealth, which is immune to bank restrictions and government control. Cryptocurrencies give users absolute control over their assets, and only the user with the personal keys can access/alter their accounts. Personal crypto walletscannot be frozen by authorities, and this makes it an attractive option for people to store their wealth.

• Gaming

Nowadays, the rise of the gaming industry in conjunction with blockchain and cryptocurrency has created a new unprecedented trend. Cryptocurrency-based games have become popular. They are responsible for solving some of the transactions and fraud problems that many players and software developers are confronted with.

Games based on cryptoare beneficial in terms of decentralized modes of payment. This makes it possible to achieve real ownership for players while encouraging them to make more purchases.This is achieved by enabling easy transfer between games. Various casinos have also started using cryptocurrency as a part of their operations.

• Donations and Charities

Cryptocurrencies are mostly popular for churning out huge profits, but they are also very useful for non-profits. Crypto-based donations are faster, fraud-free and less costly compared to conventional currencies. This is enabled by cryptocurrency’s underlying blockchain technology which makes information flow transparent. Donations done using crypto reduce costs and fees, and helps to avoid corruption. Another major advantage that cryptocurrency donations have is ensuring the non-profit get more money. It also allows for anonymous donations; as crypto accounts are not linked to a profile or carry any personal details. The World Food Program(WFP) employscryptocurrency and blockchain technology in distributing financial support to people in need.

Cryptocurrencies serve many purposes and have more use-cases beyond their potential increase in value. Airbnbhas declared an interest in tokenization and blockchain technology, and a blockchain-based booking platform Travalaannounced that it allows its users to book holiday homes using more than 30 cryptocurrencies.

Day after day, cryptocurrency gets more integrated into our everyday life.