Cryptocurrencies are a type of digital currency. They are designed to be secure and anonymous. The first one was Bitcoin, which was created in 2008. Today there are more than a thousand different cryptocurrencies with different features.
They rely on complex mathematical algorithms to generate coins and verify transactions. The algorithms control the production of new units of currency and verify the transfer of funds from one account to another.
Cryptocurrencies have been trending in 2021 in a big way. But are they so useful? The short answer is yes, and in this article, we are going to go through the most popular use cases.
Online payments is the main purpose of cryptocurrencies
Cryptocurrencies are an important part of the future economy. They are on the way to becoming the most popular form of online payment.
Cryptocurrencies are a form of digital money that was originally created to be independent from any central bank or government. Cryptocurrency can be used in many different ways, but the most popular way is for online payments.
What can you actually buy with crypto? Well, anything that you can with fiat currencies, goods, and services.
Especially some services are very reliant on crypto payments since those ensure anonymity. For example, payments at no verification casinos (learn more here: https://casino-howto.com/blog/online-casinos-without-kyc-pros-and-cons) or services that provide VPN access.
Store of value is another way to use crypto, especially Bitcoin
Bitcoin is a store of value because it can preserve value and transfer it in time and space. The difference with bitcoin (in comparison with gold) is that you don’t have to go through a third party to use it – you can just send bitcoins from one person’s wallet to another’s without an intermediary. It is also much better than gold because it is not physical and you don’t need to worry about the security of your bitcoin. The only you need to care about is that your private key is stored safely.
Bitcoin is often called digital gold and it is better than gold for a few more reasons.
The biggest one is that bitcoin is much more divisible than gold. You can divide a bitcoin into 100,000,000 pieces, which you can’t do with gold unless you have a really big piece. That makes it much easier to use as a store of value. Another reason is that bitcoin has its own blockchain which means that the supply of bitcoin cannot be manipulated by any central bank or government.
As you can see, Bitcoin has deserver its status of digital gold and it has several advantages over physical gold in terms of ease-of-use and security.
Since 2020 cryptocurrencies are more often used as lending platforms
It has been the main trend of 2020, and it continues nowadays. In short, cryptocurrencies are used as banks meaning that you can lend or borrow money from them.
Cryptocurrency lending is a form of borrowing where the borrower uses cryptocurrency as collateral. In this type of lending, the lender will lend the cryptocurrency to the borrower and in return, they will receive an agreed-upon interest rate or other compensation from the borrower.
The idea behind this type of lending is that it will create more liquidity in cryptocurrencies by making them easier to borrow. This can be helpful for people who want to invest in cryptocurrencies but don’t have enough money to do so.
In the case of lending, you can expect much higher interest rates (10% is quite achievable) in comparison with traditional banks. That’s why this feature of cryptocurrencies has gained a lot of popularity.
As of today, $87 bln locked in different cryptocurrencies, and this number is only growing (“locked” is very similar to depositing money into a traditional bank account).
Blockchain games are the main trend of 2021\2022 and big use case in future
Cryptocurrencies games are games that use cryptocurrencies as their in-game currency. There are many different types of cryptocurrencies games, but the most popular ones are Axie Infinity and Gods Unchained.
Nonfungible tokens (NFT) is another 2021’s megatrend that will continue
Non-fungible tokens are a type of crypto token that are not interchangeable with each other. They are unique and cannot be exchanged for one another.
NFTs can be used to represent assets on the blockchain, such as virtual items in video games, or digital artworks on the blockchain. They can also be used to represent ownership of property, or ownership of shares in a company.
The main use cases for NFTs is that they represent something that is unique and cannot be replaced by another token. A good example would be a piece of art.
What are the biggest cryptocurrencies in 2022 (our prediction)
Bitcoin will continue to be the biggest cryptocurrency. Bitcoin is the first and most popular cryptocurrency. It has the largest market cap, the highest price, and the most followers. It will be really hard for other cryptos to compete with it. It might happen in the future, but not in 2022, we believe.
Ethereum will try to take over and might even get very close. Ethereum is the second biggest cryptocurrency in terms of market capitalization. It has a current market cap of $31 billion and is the second most traded cryptocurrency as well. Ethereum has seen a rise in its price from $1 to $5,000 since it was launched. In 2022 we expect sharding (e.g. faster and cheaper transactions) to be integrated so it might come close to Bitcoin in terms of market cap.
BNB coin will remain a big player. One of the main advantages of BNB coins is that they can be used to pay for trading fees on the Binance platform. Since Binance is the biggest crypto exchange, BNB will remain in demand.
Solana will probably replace Cardano. There is big money behind Solana, and these venture funds are investing in Solana enormous resources. Given all that support, it is highly likely that Solana will outperform its competitors (such as Cardano and Polkadot).