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The 9 Most Ingenious Uses of Cryptocurrencies
Some cryptocurrencies, including Bitcoin, are primarily used as a store and a means of transferring value from one person to another. But today, there are thousands of different cryptocurrencies available. Many of these cryptocurrencies offer unique use cases, and several organizations and websites also offer the ability to use your cryptocurrency holdings for purposes other than paying for goods and services or sending them to other wallets. Below, we look at 9 ingenious uses for cryptocurrency.
1. Put it into play
Staking is only available with certain cryptocurrencies. Bitcoin, for example, does not offer staking. Ethereum, however, does. When you are given the option to stake a cryptocurrency, it means that you will receive rewards for holding that coin for a certain period of time. The amount you receive depends on the amount you stake, as well as the supply at that time.
Staking is also commonly used in pre-sales. If the buyer is willing to stake the cryptocurrency they are investing in, they can get additional discounts and benefits, potentially leading to significant profits when the coin is launched on exchanges.
2. Invest in pre-sales
Coin presales are held before a coin is launched. They give the group behind the cryptocurrency capital to work with and increase the liquidity of the token when it is launched. Some of the best cryptocurrency pre-sales continue to increase significantly in value when listed on recognized exchanges.
For the investor, a presale provides discounted prices on the tokens and can include additional bonuses such as airdrops. According to cryptocurrency writer MedB, Ethereum was available during the presale for $0.31 and at one point was trading at $5,000, representing a huge profit for those who took advantage of the discounted rates.
3. Lend it
Cryptocurrency lending is another method of potentially earning passive income on cryptocurrency capital. Holders lend a certain amount of a given cryptocurrency to one or more borrowers, who pay interest on that capital over time.
Lending cryptocurrency carries the same risks as any form of lending, most notably the risk that borrowers will default on the loan. It also carries the additional risk that the cryptocurrency itself may increase or decrease in value while it is held by another person. If you lend 100 Ether, for example, you will receive 100 Ether back plus interest, regardless of whether the value of that Ether has increased or decreased.
Cryptocurrency lending is a viable option for those who intend to hold their cryptocurrencies for the long term, but not for those who are willing to sell them during ups and downs.
4. Use it to play
Cryptocurrency gaming is a growing market. In cryptocurrency gaming, players pay for accounts, purchase land, or trade items using real cryptocurrency. With play-to-earn games, it is also possible to earn extra cryptocurrency, meaning that investing a small amount of cryptocurrency can lead to larger increases in holding size.
Because cryptocurrency is immutable, meaning transaction details cannot be altered or deleted, there is less risk of your account being hacked or your items being stolen. This also means players can sell their in-game value for real currency.
5. Gambling
Another form of gambling that is becoming increasingly popular is iGaming. Crypto casinos offer anonymity and privacy. They are used by players who live in areas where online gambling is illegal because players usually do not have to register their data to open or use an account.
However, all players can benefit from the reduced risk that comes from not having to provide their bank account details to online casinos, as well as the bonuses offered on these sites.
6. Invest
NFTs, or Non-Fungible Tokens, are unique digital assets that can be, and regularly are, traded. NFTs can be anything digital, including digital art, music, and even some memes. Some NFTs sell for hundreds of thousands of dollars, but in addition to buying and selling, you could potentially create your own.
Most NFTs are launched on the Ethereum network, although Solana is another popular option and there are many other choices available. If you are a digital musician, you could record and sell your own music NFTs. If you know how to use Photoshop, you can create digital art NFTs.
You don’t have to create or trade NFTs to profit from them. In fact, it’s unlikely that the person or group who paid $91 million for The NFT Merge Collection will see a profit from the purchase. Some people buy them to own a piece of Internet history.
7. Start your cryptocurrency
Cryptocurrency is decentralized. This offers many benefits to users and also means that virtually anyone can set up their own cryptocurrency. This is possible thanks to layer 2 cryptocurrencies, which are those that are set up on an existing blockchain network.
And there are many options when it comes to choosing a network to set up a new cryptocurrency on. Bitcoin’s Lightning Network has become a very popular option, while Ethereum and Solana are also popular choices. To do this, you typically need to use the top layer cryptocurrency to set up the layer 2 currency, so if you want to use Ethereum, you’ll need Ether to pay for the privilege.
However, creating a new cryptocurrency is only half the battle. You will need to give potential buyers a reason to invest in it, market the cryptocurrency, and then operate and maintain it. Some new cryptocurrencies become very popular indeed, but many also fade into obscurity. If you have a good use case and a solid whitepaper, this could be a lucrative and ingenious way to use your cryptocurrency, otherwise it is unlikely to go anywhere.
8. Suggestion Makers
One way cryptocurrency was commonly used in its early days was to tip content creators. Both the content creator and the tipper needed a wallet, and the sender needed cryptocurrency, but the transaction was kept private. Today, you can tip creators in the same way, and you may see some creators posting links to their wallet addresses.
If you’re a creator yourself, this could be a good way to earn a few extra bucks from your efforts. Post a QR code and physical address with your content, and grateful content consumers might be inclined to send you a few bucks, and these tips can add up.
9. Get your favorite sports teams involved
Fan tokens are another category of cryptocurrency tokens, this time offered by sports teams and other groups and individuals. In addition to allowing the buyer to show their support for the recipient, the team or individual can use the capital raised from the initial sale.
And in exchange for that support, some teams offer perks like the chance to meet players, early access to tickets, or even vote on team-related issues. Some major sports teams already offer tokens for fans, and they’re especially popular for esports teams.
Conclusion
Cryptocurrency and the blockchain technology that underpins it are still in development, and the ways in which tokens and currencies can be used continue to increase. Bitcoin’s original goal was to become an alternative means of paying for goods and services, and while it still has a long way to go to compete with fiat currencies in this regard, it has found some innovative and unique uses along the way.
The subject matter and content of this article are solely the opinions of the author. FinanceFeeds assumes no legal responsibility for the content of this article and does not reflect the views of FinanceFeeds or its editorial staff. The information does not constitute investment or financial advice or an offer to invest.