Chapter 7.1

Cryptocurrencies can be used similar to any ordinary currency. You can spend a cryptocurrency on products and services online or offline. You can use cryptocurrency to purchase a house, for example, or spend cryptocurrency on a cup of coffee from your local café.

Source: PwC Consumer Cryptocurrency Survey

We’re just a few years into the age of cryptocurrency. We’re just beginning to see some of the potential uses for cryptocurrencies. Sure, you can use cryptocurrencies to buy products and services like any currency – but the true value of cryptocurrency comes from its use as an anonymous, censorship-resistant, friction less medium of transfer. With that in mind, let’s take a look at some of the uses of cryptocurrencies in place today:

To Buy Products and Services

First, let’s start with something obvious. Bitcoin and other cryptocurrencies can be used to buy products and services – just like gold, silver, or any currency. You can give someone a cryptocurrency like bitcoin or Ethereum, and they’ll provide a product or service in return.

Today, a growing number of retailers and service providers accept bitcoin in exchange for products and services. There are online marketplaces that accept cryptocurrencies for all listed products, for example. Many freelancers or service providers accept cryptocurrencies in exchange for their services because they are able to charge lower fees than they would with PayPal or similar transaction methods.

Today, there are millions of places you can exchange cryptocurrency for products and services – and the list of places that accept cryptocurrency continues to grow over time.

For Low-Cost Money Transfers

The core benefit of cryptocurrency comes from its ability to transfer money in a low-cost way. Whether you’re transferring $40 million or $4, a bitcoin transaction might cost just a few pennies. Under the traditional money transfer system, a money transfer or credit card payment might cost thousands of dollars.

Ultimately, one of the biggest advantages of cryptocurrency is being able to use it as a low-cost money transfer method. No other payment method offers similar security and frictionless transferability as cryptocurrencies – and that’s where much of the value of cryptocurrency comes from.

For Censorship-Resistant Transfers

All transactions performed with your debit card or credit card can be tracked. There’s an electronic record of virtually all your non-cash transfers.

Cryptocurrency works differently – particularly when you’re using privacy-centric currencies like Monero. Cryptocurrencies are a censorship-resistant alternative form of wealth storage. Governments can’t suddenly freeze your cryptocurrencies – but they can certainly freeze your bank accounts and credit cards.

There have been countless examples where wealthy individuals have been made poor overnight because the government decided to freeze their funds. Cryptocurrencies provide a “safe haven” for your money. If the rest of your funds or accounts get frozen, you can still access your cryptocurrencies. It’s a censorship-resistant form of money.

To Invest in Early Stage Startups through ICOs

One of the unique things about the venture capital industry is that the industry is closed off to average investors. Today, the VC industry is exclusively for wealthy individuals and private investment firms. That means an average investor like you is unable to invest in the next Facebook, Instagram, Tesla, or YouTube during the early stages. You’re forced to wait for an IPO or until the stock hits the open market.

Cryptocurrency works differently. Cryptocurrency has introduced the world to initial coin offerings (ICOs). These ICOs allow customers to invest in exciting startup companies (and yes, also scams) while avoiding the traditional VC industry.

Wealth Management

A growing number of high net worth individuals are using cryptocurrencies to help manage their wealth. The wealthy like to diversify their assets across categories. Cryptocurrency is one such category. We’ve seen reports online from money managers who claim high net worth individuals are calling and asking to transfer 1% of their portfolio into cryptocurrencies.

Of course, it’s not just high net worth individuals who use cryptocurrencies to manage their wealth. There are many newfound cryptocurrency millionaires who invested at the right time and grew their portfolio quickly.

Entire blockchain companies have been built around the idea of using cryptocurrencies for wealth management. There are companies that use decentralized autonomous organizations (DAOs) to make investment decisions for customers, for example. Other companies have created a democratic ecosystem where users choose to manage a portfolio of crypto assets.

For International Money Movement

Let’s say you’re moving to a new country. You want to withdraw all of your money from a bank account in India and transfer that money to a bank account in the United States. If you transfer this money using your bank account, then you’ll pay enormous fees and encounter paperwork. You might even have to pay taxes or face other restrictions.

On the other hand, you can transfer your money into cryptocurrency and store your entire wealth on a single piece of paper. Instead of traveling with thousands of dollars on your person or gold bars in your bag, you can transfer the same value with a single paper wallet (or a mobile app).

Cryptocurrency can also be used for international money movements from foreign workers to family back home. Traditionally, foreign workers are forced to rely on expensive remittance services and wire transfers. With cryptocurrency, the same transfer of value can take place in seconds with minimal fees.

To Reduce Electoral Fraud

A lot of voting takes place over cryptocurrencies and blockchain networks. In the future, we might see entire national votes take place over blockchain networks. Today, some corporations use blockchain-based voting. In many cases, these blockchain-based voting systems rely on customers holding a single token to make their vote. In other cases, voting is done by cryptocurrency, with the person holding the most cryptocurrency having the biggest share of the vote. In any case, blockchain and cryptocurrency technology has the potential to reduce electoral fraud.

To Reduce Corruption in Charities

Want to donate money and see exactly how that money is spent? Cryptocurrencies are starting to do that. Cryptocurrencies can be tracked using the blockchain from the moment they’re donated to the company to the moment they’re spent. If you want to see exactly where your $100 donation to the World Food Programme (WFP) went, for example, then you can do that using blockchain. In fact, the WFP is already using blockchain technology to securely distribute cash to the hungry!

To Sell Your Spare Computer Resources

We’ve already talking about cryptocurrency mining and how you can use your computer to mine cryptocurrencies. However, you can sell more than just your GPU and CPU processing power. A growing number of blockchain technology companies let you earn cryptocurrency based on your spare hard drive space. Storj is one such company. You can make money using your computer’s empty hard drive space. Meanwhile, customers can buy hard drive space at a much cheaper rate than traditional cloud service providers. Siacoin and Filecoin are two other options.

To Buy Gift Cards for Anything

Gyft and eGifter are two major gift card retailers that now accept bitcoin and other cryptocurrencies. This means you can effectively spend your bitcoin at retailers that don’t traditionally accept cryptocurrencies. You buy a gift card online using your crypto balance, then spend your gift card in-store just like any ordinary gift card. These online merchants charge a small fee, but it’s a reasonable fee considering you can spend your crypto funds in the real world.

To Find your Future Partner

Online dating websites like OkCupid have periodically accepted bitcoin throughout their history. OkCupid first started accepting bitcoin in 2013, although they stopped accepting bitcoin in 2016. Today, a number of smaller dating websites accept bitcoin in exchange for premium memberships, although crypto acceptance remains low among the major dating websites.

To Travel the World

Expedia is one major travel company that accepts cryptocurrency payments (the company has accepted bitcoin since June 2014). You can book hotels, flights, car rentals, packages, and more via Expedia, which means it’s never been easier to travel the world using nothing but bitcoin. As other online travel agents jump on board, we expect it to continue becoming easier to travel the world.

CheapAir.com is another major online travel agency that accepts bitcoin. In fact, CheapAir claims they were the first online travel agency in the world to accept bitcoin, something they began accepting back in November 2013.

To Move to a New State

A New York City-based moving company called Roadway Moving Company started accepting bitcoin as a payment method late in 2017. That means you can legitimately use bitcoin – and nothing but bitcoin – to move to a new state or a new address. Roadway Moving Company cited the lack of sales tax as one of the reasons they began accepting cryptocurrency as a payment option.

Thousands of Other Potential Uses in the Future

Ultimately, the uses for cryptocurrency listed above are just a few of the uses available today. In the future, we will likely see thousands of other potential uses for cryptocurrencies. We’re just at the start of the cryptocurrency revolution – and the future could be very exciting.

Written by Andrew T

Follow us on:

Pin It on Pinterest