9 Ways to Use Cryptocurrency in 2023
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Cryptocurrency, once considered unconventional in the world of finance, has now become a versatile financial tool with a wide range of applications. These applications not only enhance traditional financial practices but also introduce completely new approaches.
By February 2023, 114 nations, with the United States among them, are contemplating launching their own central bank digital currencies (CBDCs) in response to the surge in cryptocurrency popularity.
But how are they being used beyond buying goods and services?
1. Facilitating Efficient Cross-Border Payments
In the span of seven years, the market capitalization for the top 100 cryptocurrencies surged from approximately $5.2 billion to close to $1.7 trillion by January 2022. Why? One reason is likely because cryptocurrency has become a popular solution for international money transfers due to its ability to easily cross borders. Many individuals use cryptocurrency to support their families in different countries because it offers global accessibility. With the help of blockchain technology, cryptocurrency transactions are fast, efficient, and cost-effective for sending money internationally. Companies like Circle and other peer-to-peer payment technology firms have created applications that allow people around the world to receive cryptocurrency and instantly convert it into local currency. This quick conversion helps protect against the unpredictable price changes often seen with most cryptocurrencies.
2. Gambling and Betting
Crypto has gained significant popularity in the gambling and betting industry. Its advantages include near-instant transactions, lower fees, and enhanced privacy. A selection of the best sites offer an increasing number of different cryptocurrencies as payment options, including:
- Bitcoin
- Ether
- Dogecoin
- Litecoin
These are the main options accepted by most crypto casinos, although some platforms also accept cryptos.
Using crypto for online gambling is by far the best way to reduce fees and get almost-instant access to your money when depositing it into and withdrawing it from your online gambling account. It also makes online gambling more accessible, as crypto casinos and sportsbooks tend to be available and legal in countries and states where fiat currency gambling is not.
3. Directly Rewarding Content Creators
Cryptocurrency is changing the game for content creators by introducing direct micropayments. With blockchain networks, transaction processing fees are kept to a minimum, allowing fans to tip their favorite creators without worrying about high charges.
Take Brave browser as an example. It leverages blockchain technology to enable creators to receive direct compensation from their audience. Similarly, Gitcoin provides a platform where developers can earn tips for contributing to open-source projects. Cryptocurrency is revolutionizing digital tipping and offers creators a more reliable income source.
4. Revolutionizing E-Commerce
The use of cryptocurrency in e-commerce is becoming increasingly popular. A study from Juniper Research predicts that by 2024, cryptocurrency usage in E-Commerce will surpass $9.8 billion annually.
Digital wallets play a key role in facilitating cryptocurrency transactions during online shopping. Merchants have the option to directly accept cryptocurrency payments or utilize service providers for this purpose. By embracing cryptocurrencies, businesses can extend their customer base globally and minimize transaction expenses.
Additionally, crypto can be used to incentivize customer loyalty through reward programs. Several industry leaders have already incorporated one or more cryptocurrencies into their accepted payment methods, including:
- Microsoft
- PayPal
- Starbucks
- Overstock
- AT&T
5. Decentralizing Financial Transactions
Cryptocurrencies have revolutionized the traditional financial system by introducing decentralization. The underlying blockchain technology empowers decentralized finance (DeFi) by enabling direct peer-to-peer transactions with varying complexities.
This innovative approach allows users to transact, borrow, and lend directly to one another without the involvement of centralized intermediaries. DeFi initiatives usually operate as decentralized autonomous organizations (DAOs), relying on community consensus for decision-making instead of traditional central banks or government policymakers.
6. Active Participation in Blockchain Governance
Cryptocurrency holders have numerous opportunities to actively engage in blockchain networks, going beyond simple transactions. They can contribute to governance, enhance network security, and validate blockchain transactions. Typically, the level of participation aligns with the number of crypto tokens they possess.
Staking is another favored method for actively participating in a blockchain network; it involves holders agreeing not to trade or sell their crypto holdings in exchange for interest rewards. While staking offers appealing yields, it does come with risks related to price fluctuations and platform liquidity.
7. Enhancing Transaction Privacy
While several blockchains aim to improve transparency in transactions, cryptocurrencies such as Dash, Monero, and Zcash prioritize enhancing transaction privacy. By prioritizing privacy, these cryptocurrencies mitigate the risk of fraud and identity theft, offer protection to activists and journalists, and ensure operational confidentiality for businesses.
8. Maximizing Earnings through Yield Farming
Yield farming, also referred to as liquidity mining, is a strategy in decentralized finance that aims to earn crypto holders more money. This approach enables users to maximize their cryptocurrency holdings by earning interest income. Yield farmers utilize smart contracts, which automate the process, to constantly move their crypto assets to blockchain networks offering the highest interest rates.
However, it’s important to note that yield farming comes with its own set of risks. Smart contract malfunctions can occur and participants face liquidity risks, changes in interest rates, and volatility in cryptocurrency prices. Yield farming is conducted on various blockchain platforms, including SushiSwap, Aave, Yearn.Finance Harvest Finance, and Alpaca Finance.
9. Cryptocurrency Payroll for Global Teams
Cryptocurrency provides a viable option for companies to pay employee wages and contractor fees, especially for those with global teams or significant holdings in cryptocurrency. Employees have the choice to either receive payments in cryptocurrency or convert digital payments into their local currency.
Although this practice is more prevalent among blockchain-native companies, there are providers like BitPay that allow businesses across various sectors to adopt cryptocurrency payroll services.