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What Makes Crypto More Than Just an Investment Vehicle?

At the end of the day, the underlying technology behind every crypto project is what gives them their intrinsic value.

Posted December 14, 2021

Macro shot of action figures lifting a bitcoin to illustrate the idea that crypto is more than just for investments.
Macro shot of action figures lifting a bitcoin to illustrate the idea that crypto is more than just for investments.

Cryptocurrencies can indeed become lucrative investment opportunities. Network activity, market news, as well as price action are all great metrics to pay attention to.

However, in the process of seeking out long-term gains, we shouldn’t forget to pause and consider crypto’s long-term impact to society. Crypto is here to stay, and like all great innovations, it has the ability to offer good into this world.

Perhaps all the media could say is how they behave in the financial market — as a pattern of tall green and red candlesticks. But if you can see beyond that, you’ll marvel at the underlying technologies and how they’re set up to solve the world’s inefficiencies. 

Here is what crypto technology has been doing in the background.

Provide a fair and truly private browsing experience

You don’t have to buy a cryptocurrency and use your wallet, in order to interact with one of hundreds of Ethereum’s decentralised application. At least Brave can be downloaded for free, and used like any other applications that live in your desktop or mobile device.

This decentralised application is a privacy-oriented browser, which uses the ERC-20 Basic Attention Token (BAT) to incentivise responsible digital advertising. With the Brave browser, users can fine tune their privacy and data preferences.

How BAT tokens work
How the BAT token flows from Advertisers to Creators and Users. Source: Brave.com

If they opt to expose themselves to ads and agree to share their browsing experience with advertisers, they could earn BAT tokens. As of December 2021, simply using it normally (with ads enabled) can potentially earn them around 20-40 cents per day in BAT tokens. 

If users prefer absolute privacy, Brave will not share browsing experience data. These are actually stored in the user’s machine. Other browsers may send user data immediately after an input trigger, such as when clicking on ads or referral links. 

The BAT token is also paid to users and content creators or site owners by advertisers themselves. This means no data company will take a large share of the advertising revenue. The BAT token truly gives monetary value back to the ecosystem of users.

Marketing with non-fungible tokens (NFT)

The financial market is not for everyone, and people can’t really “have fun” with assets like stocks and derivatives. Fortunately they could with digital collectibles that can potentially fetch thousands of dollars in valuation.

Non-fungible tokens (NFT) are special types of crypto assets that are not exchangeable with another, even if they were minted by the same smart contract.

For example, two identical digital artworks can be valued at different prices because the first may have been previously owned by a famous buyer. This adds a premium to the cost of owning the first NFT compared with the second NFT.

If you think NFTs are just overpriced JPEGs, you should look at the more practical side of NFTs, such as in marketing. The simplest hypothetical example of NFTs used in marketing is a personal badge rewarded to loyal customers. 

These NFTs can be set so that they cannot be traded with someone else, effectively making them worthless in the market, but special to the owner.  

But here are also real examples: 

During the peak hype of the NFT boom, Budweiser got involved with crypto by buying an Ethereum-powered domain called “beer.eth” and a space rocket NFT. Up until November, the American brewery minted 1900 digital collectibles that will grant owners access to Budweiser’s own metaverse — the “Budverse”.

The centralised payments network Visa bought a CryptoPunks NFT, getting ahead of other financial institutions. Their move seems to symbolise their support for crypto adoption. Indeed, they have decided launch the Global Crypto Advisory Practice this month.

This month, Adidas bought a bored Ape Yacht Club token for 46 ETH, while competitor Nike have sought to trademark 7 virtual goods the month before. 

You could argue that they’re piggybacking a trend for short-term profits. However, do consider that NFTs are a unique type of asset, in that many holders don’t seek to financially gain from it — anymore than being part of something bigger.  

Cointelegraph has an excellent article on this. They propose that successful NFTs are centered on community. “As users seek out the world of NFTs, they have come to expect more than a digital asset; they are looking for a place where they can be truly involved with the people around them, gaining a sense of belonging.”

It’s not that these companies will profit from creating NFTs. Currently, the network congestion of Ethereum makes it unbelievably expensive to mint NFTs. Rather, it’s the community engagement around these NFTs that gets a whole new generation of buyers to talk about their brand.

Privacy-oriented charity

Cryptocurrency is currently a great medium of exchange from donors to beneficiaries. While donations are taxable events, donors are not subject to gains tax. Therefore, it’s more tax-friendly to donate crypto assets directly as “gifts and property”, rather than first converting crypto assets to fiat money (which will incur gains tax). 

screenshot from the giving block's website.
Crypto donations are tax efficient. Source: The Giving Block

Even if the regulation will change in the future, most people will find it easy to be charitable with crypto — a survey backs up this fact.

Fidelity Charitable found that 45% of crypto investors donated $1,000 or more to charity in 2020, making crypto investors the most generous of all the total investor population. They also found that this is because their “cryptocurrency appreciated significantly” (56% of respondents), and that they “wanted to do something good with [their] cryptocurrency” (67% of respondents).

Blockchain technology also solves one key problem in the heart of the nonprofit industry — privacy concerns.

Pat Duffy from The Giving Block said that nonprofits generally rely on donor stewardship programmes. That is where nonprofits seek out donors who are likely to make repeated donations. According to Pat Duffy, it’s preferable than to constantly look out for new donors in a fundraising scheme.

“Fundraising costs nonprofits a lot of time, energy and money,” said Pat Duffy. “Donor stewardship is important for nonprofits. Using data to target existing donors is easier than earning new ones, allowing them to spend less time and money fundraising.”

The trouble starts when data privacy becomes a matter of concern for donors. “You probably don’t love the idea of the personal information you put in a donation form ending up on server farms designed to ‘steward’ you into being more generous, even if it’s for a great cause,” he wrote. 

Using data to target existing donors is easier than earning new ones, allowing them to spend less time and money fundraising.

Pat Duffy, The Giving Block

On the other hand, donors donating in cryptocurrency can be assured that their true identity and their wallet address cannot be linked to one another. This greatly enhances privacy for donors.

Apart from this, Pat Duffy learned that privacy obtrusive charity can marginalise more charitable people. He wrote on Coindesk:

“I discovered the importance of Private Crypto Donors first hand when an LBGTQ charity we support received its first major crypto gift. It was a lot of money, and the nonprofit was confused about why one of their largest donors wouldn’t want credit for their gift. 

“About a week later, we received a short note from the donor’s Protonmail. He was a closeted gay man and, because he was afraid of having it tied back to him, he had never donated to an LGBTQ charity before.”

Crypto is clearly the best solution to maintain courtesy and ethics whilst connecting donors and beneficiaries. If you’d like to learn more about The Giving Block, check out their official website.

The verdict

At the end of the day, cryptocurrencies are more than tradable assets in a wild financial market. It’s great to know that each and every one of the thousands of crypto tokens solves a fundamental problem in society.

We’ve so far only listed down three advantages of the nascent crypto technology — real privacy, true ownership, and inclusive community are all what crypto brings.

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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.

Last updated August 29, 2022

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