Despite the digital asset market facing a downturn in 2022, the fundamentals behind crypto assets and blockchain technology haven’t changed in 2023.
Trading prices aside, blockchain technology and cryptocurrencies have a ton of real world use cases. From reducing costs for friends and family to send money around the world, to immutable contracts that don’t need oversight, and digital identity solutions, there are a ton of possibilities for crypto.
In this guide we’ll outline five of the best digital asset use cases for the future. Let’s dive in.
Five of the Best Crypto Use Cases
Below we will describe five of the best cryptocurrency use cases that are currently being developed or are already in use.
Some of these use cases have overlap with each other because they essentially work in tandem. This is by no means an exhaustive list of strong use cases for crypto, but it’s a solid base. Let’s start in the world of finance.
Money Transfers & Cross-Border Remittances
Perhaps the original purpose of cryptocurrency, peer-to-peer payments are one of the main tenets of Bitcoin (BTC) and a variety of other digital assets such as Stellar (XLM) and Ripple (XRP). While Bitcoin wasn’t all that affordable as a payment system due to the number of transactions per second it could process, especially when it was worth nearly $70k USD a piece. However, with the development of the Lightning Network, Bitcoin users can send transactions for a fraction of a cent.
The same can be said for using Stellar and Ripple, but the reality is that almost any cryptocurrency can be used for money transfers and remittance payments either nationally or internationally. So you could say the same for Cardano or Solana.
The only limitation of this use case is the need to convert that crypto into fiat on the other end, which can be difficult depending on your jurisdiction. However, this will get easier in time as digital assets become more mainstream. It’s already not a big deal if you live in a more developed country. Regardless, using crypto for money transfers and cross-border remittances is already faster and cheaper than traditional avenues.
Smart Contracts
Smart contracts are already being implemented in a variety of ways across the cryptocurrency sector, from decentralized finance and lending to NFT minting. The only real difference between a smart contract and a traditional contract is that you don’t need someone to enforce a smart contract like you would a traditional one. Users must adhere to the rules built into the smart contract in order for it to work, and the contract will enforce these rules without oversight. This saves businesses time and money.
Smart contracts have use cases for all sorts of industries because essentially anything that involves a traditional contract could instead use a smart contract. The contract is then secured by the blockchain where it’s always able to be verified and where it cannot be altered. Sensitive medical data could be shared securely with set parameters for access and health plans. Whether using a smart contract for insurance or a crypto loan, it will be executed properly.
Decentralized Identity Solutions
The advent of the Internet and global interconnectedness has created a couple problems. First of all, we all need to rely on 3rd-parties to keep our personal data safe and out of bad actors’ hands. Secondly, scams and identity theft are at an all time high. Blockchain gives us an opportunity to correct this thanks to the potential of decentralized identity solutions. These identity solutions will be able to put our data back in our own hands and provide people with a self-sovereign identity (SSI) as we transition from Web 2 to Web 3. Once we’re able to more directly interact with the internet, whether for a social media platform or to create a doctor’s appointment, having an SSI will make it a more streamlined process.
Apart from putting our data back into our hands, decentralized identity solutions will help with verification of credentials for potential employees, background checks, security of social security numbers, and more.
Decentralized Finance (DeFi)
Somewhat tied in with smart contracts and money transfers, decentralized finance (DeFi) is one of the most popular use cases for cryptocurrency. DeFi encompasses services such as decentralized exchanges, decentralized lending platforms, market makers, NFT marketplaces, and more. Basically, any traditional finance service you’re aware of also has a DeFi version. The advantage to DeFi is that it’s an inclusive system, meaning the users of DeFi platforms are often the ones who also generate profit from them. For example, on decentralized exchanges, the users provide the liquidity for the pools used for swapping assets. On a centralized exchange such as Binance, Binance receives the trading fees, but the users receive these fees on a decentralized one. This gives users globally access to sources of passive income.
Not only that, but DeFi gives users in countries with poor financial infrastructure access to better services as long as they have an internet connection. This means that those in less developed nations have an easy way to access financial services and without requiring them to wait for approval from a bank or traditional financial institution to do so. All of this is made possible because of the combination of DeFi, blockchain, and smart contracts.
Internet of Things (IoT)
The Internet of Things (IoT) is tied to smart contracts, decentralized identity solutions, DeFi, and money transfers. The current IoT has millions of applications and almost as many ways to be attacked by those with bad intentions. The increase of IoT products over the past decade gives hackers more ways to steal your data on everything from a smart tv to a smart thermostat. By infusing blockchain with the IoT, it will add a higher level of security and help prevent data breaches by utilizing identity solutions combined with smart contracts and the transparency of blockchain.
The need for a more secure IoT will become more and more important as devices are seemingly endlessly being connected to the internet every day, creating more and more attack vectors for hackers. Blockchain has a chance to prevent this due to its secure structure and save both companies and individuals a variety of potential headaches such as data breaches, identity theft, and more.
Closing Thoughts
While the above list of use cases isn’t the totality of the ones that exist, they should give you a good base when trying to understand the future potential of blockchain and cryptocurrency.
Other use cases such as NFTs, logistics, and healthcare are also already taking advantage of blockchain. It’s only a matter of time before you’re enjoying the use cases of crypto without even realizing it.
