Myth: Crypto has no real usecases

We often hear that crypto is just a pyramid scheme, but although there are cases of fraud in the crypto industry, the crypto industry has developed a lot, and has several very relevant applications - something that would not be the case if crypto was just a pyramid scheme.

Crypto is much more than scams and pyramid schemes

Cryptocurrencies are well on their way to changing the way people perceive and manage finances around the world. The technology has introduced concepts such as decentralization, cryptography and distributed wallets and is a completely new way of recording and transferring value.

We are talking about a crypto industry that is in massive growth, where new crypto projects appear daily. Although not all will survive in the long term, or have any value at the present time, many other projects have again found unique global applications that can revolutionize several industries.

In this article, we take a look at the 12 uses that crypto has already been proven to have around the world, and which are neither scams nor pyramid schemes, as opponents of crypto often argue.

Decentralized digital currency

One of the most fundamental uses of cryptocurrencies is to act as decentralized digital currency. This type of currency is free from interference from governments or other third parties, and traditional financial institutions such as banks have no control over this digital currency. If you are unsure why you need something like this, we recommend reading about countries like Argentina, where their national currency in October 2023 reached an inflation rate of over 140%!

Furthermore; not before the creation of crypto on blockchains has it been possible to transfer safely, quickly and traceably, without intermediaries. Which means that an extra layer has now been created on top of our existing internet, promoting what we call "peer to peer" interaction.

Crypto banks

Major financial institutions such as Barclays, JP Morgan and Goldman Sachs have already, or plan to, adapt their services to manage cryptocurrencies, which has led to the emergence of what we call "cryptobanks". These institutions offer crypto-interest accounts and savings accounts, and this concept has the potential to transform the traditional banking system.

Earn passive income with crypto staking

Crypto staking is a method of earning passive income from crypto assets by participating in consensus mechanisms such as Proof-of-Stake (PoS). By lending certain cryptocurrencies such as Ethereum, Solana and Cardano back to their network, users can validate blocks on the blockchain network and earn rewards. It can be compared to an interest-bearing product in the ordinary financial system.

Real World Asset Tokenization (aka RWA)

Crypto enables the tokenization of physical assets such as goods, real estate, art and stocks. This improves liquidity in the markets for these assets and allows investors to participate, even with limited funds. What we call tokenisation of real assets is increasingly being worked on, especially within real estate.

Cross-border payments and online purchases

Crypto has revolutionized international payments with its fast transactions, decentralization and low costs. Instead of it taking 3-6 banking days to transfer money from an account in one country to an account in another, transactions with crypto can be done in seconds/minutes.

When the war in Ukraine broke out, the Ukrainian government was very quick to announce that donations to the defense of the country could be made in crypto. This meant that the country could already shortly after the start of the war equip itself with donated funds and did not have to wait for days, which would be decisive for the ability to defend itself.

Online payments with crypto are also on the rise. More and more people are receiving payments in crypto in the same way as payment cards, and both PayPal, Mastercard and Visa have all upgraded their services to be able to offer crypto payments.

On-chain governance

Cryptocurrencies offer a more sophisticated way to implement new regulations and guidelines on a network via the conceptsKNIFEpp. andGovernance Tokens. This is calledOn-Chain Governance and allows the community to distribute governance power between stakeholders. The owners of agovernance token therefore have voting rights and can influence decisions about the network's future. For example, the owners of the cryptocurrency UNI can participate in democratic regulations on the development of the decentralized exchange Uniswap.

Crypto gaming

The crypto gaming industry is experiencing explosive growth, where players can earn in-game items, such as NFTs, and trade them based on demand. This opens up opportunities to leverage crypto assets and have fun at the same time. Some would argue that this already exists in today's existing game industry, and that is partly true, but there is a crucial difference. This difference lies in the ownership itself, and thus the possibilities to transfer and sell crypto (tokens or NFTs) that one has acquired in games.

The games we know today are web2 games and they are not built on blockchains, but are run by central entities in the form of game providers who make a game available, and then you buy assets in the game. As a player, you cannot take these assets out of the game if you want to use them in, for example, another game. And if the game becomes unavailable, the players no longer have access to their acquired assets, nor can they make a claim against the gaming company.

If the game is built as a web3 game, i.e. with blockchain and crypto, then the players themselves own the acquired asset. They can take them with them and sell them like any other valuable asset.

Digital identity and products in virtual worlds

In the same vein as above, crypto is a crucial element in the development of what we call virtual worlds or metaverses.

Although Meta (formerly Facebook) has received a lot of criticism for its focus on this very thing, there are already large virtual worlds that are used daily by millions of users and where large companies are also present.

Ex. is the Asian platform Zepeto, which with its daily 20 million users is a virtual world where users, educational institutions and huge fashion brands such as Zara, Ralph Lauren and Gucci create NFTs which thus define the products of the future and not least contribute to creating the users' virtual identity.

Smart contracts

Smart contracts, based on blockchain technology, allow the automation of transactions and actions when predetermined conditions are met. These contracts are immutable and provide a secure and reliable way to perform various functions in areas such as governance, finance, healthcare and insurance.

In other words, one can imagine that, for example, property deeds are placed on a blockchain as unique NFTs that secure ownership, and that sales contracts are created as smart contracts that ensure that the conditions are met by the buyer, and then the rights are transferred and registered to the buyer , away from the seller.

Fan-tokens:

Fan tokens have already become a major part of the strategy of major sports clubs and their prospectsare very interestingin order to be able to use these as a means of motivating fans, increasing engagement and, not least, driving sales.

The most used blockchain for this is chiliz and a visit to the platform Socios.com shows the extent of, for example, football clubs that have fan tokens and thus taken a big step in creating a fan culture based on ownership and unique experiences.

NFT in access certificates and as authenticity certificates
RNursing numbers on bicycles are something that many people are familiar with. Another thing is certificates of authenticity which serve as proof that exclusive watches or jewelery are genuine, so that the rightful owner can document ownership.

But analogue systems like these often fail because they are not synchronized with other systems, or because the evidence does not find its way to the paper and disappears or is stolen along with the object itself.

Several manufacturers of exclusive brands and cars are therefore a long way from being able to introduce that an NFT is included when you buy an exclusive product. In this way, both ownership and authenticity can be documented at any time, resale without documentation becomes more difficult, and insurance matters become easier to verify.

Banking the unbanked.

In a new report written by KPMG, crypto and blockchain are highlighted as an important driver for creating more equality in the world. The report gives the example of the many Afghan women who are not allowed to have their own bank account, and where the salary goes to others in the family. The lack of opportunities to have your own bank account is widespread in the world, and this can be difficult to understand for those of us who live in Western countries.

Keeping people out of the global economy is the most effective way to ensure that they do not have the ability to change their "ranking" nor do they have the ability to run away with their values. With access to a digital wallet, and with the option of having salary transferred to this, crypto creates a unique opportunity for people around the world to be able to break out of a situation that otherwise seemed impossible to change.

Today's economic landscape is rapidly changing, and here crypto shows its versatility and its potential to revolutionize the economy. With an incredible number of potential uses, it seems that crypto has only just begun to scratch the surface of the possibilities that exist. But it's also important to remember that many of these new business models and projects in crypto are still in their early stages, and only time and society's adoption of crypto will tell which will be the next big tech companies.