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Use Case: Cryptocurrency

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Crypto acquisitions have come a long way since Bitcoin. What began out as a P2P payment system has generated an array of use cases that stretch far beyond the initial identification of cryptocurrency. While the prior function of crypto assets such as ETH and BTC is a subject of some discussion, what’s undeniable is that digital currencies can now be utilized for more than merely paying for interests and favours. Here are the five most important use cases for crypto investments that establish the extent of the fintech revolution taking place.

Use Case 1: Digital Cash

Created as a peer-to-peer electronic money system, if the identification of Satoshi’s whitepaper is to be accepted at face worth, Bitcoin lived up to its billing for preferably five years. Before the mainstream arrived terms with Bitcoin, it fueled a nascent digital economy that included black market goods and gambling. It was also obtained by tech-savvy vendors and early adopters, for shopping everything from graphics cards to t-shirts.

As web fees started to rise, causing multiple merchants to drop support for BTC, growing followers of Bitcoin Core loyalists, who would come to be known as maximalists, started supporting a store of value description over that of a medium of exchange. With BTC becoming problematic for low-cost payments, the P2P torch handed to Bitcoin Cash, which started to live in mid-2017 as a fork of Bitcoin. The BCH network has since held its community’s purpose of enabling fast and low-cost payments, with thousands of merchants accepting bitcoin cash in-store and online.

Meanwhile, during the 2017 ICO boom, scores of crypto projects started up with generic cost tokens attached to them as the reason for increasing funds. When the tide ran out on the crypto demand in early 2018, it became evident that aboriginal ERC20 payment tokens absolutely weren’t feasible, with most passing a slow death due to high velocity and low liquidity. The crypto assets that endure today as P2P currencies are mostly restricted to pre-2015 coins such as dash and litecoin.

Use Case 2: Programmable Money

Smart contracts even predate Bitcoin, having been created by Nick Szabo. Smart agreements are simply the blockchain-based executable principles that actions a certain outcome supplied certain requirements have been met. Although interchangeable with Ethereum, most crypto grids have a degree of smart contract programming, including Bitcoin itself.

RSK has planned a smart contracting forum that capitalizes on the safety of the Bitcoin blockchain and its web effects. As BTC’s power over altcoins has increased this year, so has the allure of making Bitcoin ahead of less decentralized options such as Tron and EOS. As a result, developers that might have formerly flocked to so-called “second-gen” blockchains, have had cause to examine Bitcoin in a whole fresh light. As for the Bitcoin Cash network, Simple Ledger Protocol has enabled the distribution of sub-tokens, constructed using opcodes that Satoshi initially integrated into the Bitcoin protocol.

Use Case 3: Collateral

Lending has evolved into one of the most critical applications of the burgeoning decentralized finance movement, allowing individuals to collateralize fiat loans against cryptocurrency and vice-versa. On Ethereum, lending usefulness such as Maker, Compound, and Instadapp have flourished, with hundreds of millions of dollars worth of support now locked up in lending protocols. Other defi lending answers retain Dharma and Dydx, while centralized options include Salt, Youhodler, and Nexo, which allow people to get a fiat loan in interaction for locking up their crypto. There’s also the option for holders to make annualized curiosity by locking their cryptocurrency into these lending protocols.

Use Case 4: Governance

Governance might not sound like the most effective of use cases for cryptocurrency, but an on-chain poll is a very good means of ensuring provable voter turnout. Bitcoin miners have long engaged themselves in elementary governance by signalling help for protocol transformations by signing new blocks.

Blockchain government has gotten more refined since then, with Dash, introducing a thriving budget voting means that’s been imitated by scores of projects. There are now crypto assets whose primary function includes governance, such as 0x, maker, condemned and definitely. In acquisition, crypto projects such as Aragon in corporate governance by enabling token-holders to vote on key findings using a damp. So far, participation in on-chain administration has been downward for crypto projects, showing that voter apathy is a universal problem.

Use Case 5: Collectibles

non-fungible tokens mean unique digital assets. These generally comprise in-game collectibles such as skins or characters, or in virtual fact games can represent digital land or possessions. This causes it feasible to trade the assets to fellow collectors or parties and provides full ownership of the collectible. That’s not to say that NFTs are completely decentralized, however, as their value still relies on a central authority, say Cryptokitties or Cheeze Wizards, which hosts the picture associated with each token and contains the virtual world it works in. Nevertheless, collectibles represent an improving vertical within the cryptosphere, with NFTs possible to become extremely embedded into esports and virtual reality in the years to come.

Evolving Applications for Crypto Assets

Cryptocurrencies are immature, and thus multiple of the envisioned use cases for them have yet to totally materialize, often because the infrastructure is always being created. Security tokens, hybrid tokens, products, crypto commodities, privacy coins, stablecoins, work tokens, discount tokens and many more have yet to prove themselves but are possible to achieve a foothold as crypto adoption grows and the ecosystem matures.

From national reserve currency to time-stamping documents, Bitcoin resumes proving its versatility. One of the best things about permissionless grids is that anyone can operate them however they stay fit, be it at the bottom layer or via secondary and tertiary layers. The crypto space has grown in bounds and bounds over the past decade. 10 years from now, crypto assets will be serving programs that we have yet to envisage, let alone design.

E-mail id: [email protected] enter image description here Author - Johnson Augustine
Chief Technical Director and Programmer
Founder: Airo Global Software Inc