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Is crypto useful for anything other than my investment portfolio?

On the surface, crypto may look like a novel and speculative asset. In truth, there are plenty of use cases for crypto. Let's find out.

Posted April 3, 2023

Crypto Use Cases
Crypto Use Cases

The number of everyday investors diversifying their portfolio to include cryptocurrency (crypto) is growing. There is an increasing understanding of the opportunities inherent in this type of investment. But beyond being ‘just another asset class’, is crypto useful (and even inevitable) in the real world?

With so many investors asking “Isn’t it really hard to withdraw it into your bank account?” and “Can it be used as a ‘proper’ currency?”, we thought it was time to lift the lid on some innovative ways crypto is being used in everyday life.

This article will show you just six of the ways. However, if you type “…ways to use cryptocurrency” into your search bar, Google will surface 103 million results!

Crypto-backed loans gaining popularity among borrowers

Crypto-backed loans are loans that are secured by cryptocurrency assets. These types of loans are becoming increasingly popular as they allow borrowers to access instant liquidity without having to sell their crypto (the loan is made against their crypto).

This is particularly useful for those who hold a significant amount of cryptocurrency and don’t want to lose the value inherent in this investment. Their cryptocurrency is used as collateral to secure the loan; and they receive a loan of traditional currency, such as USD or EUR, which they can use as they see fit.

This type of loan offers the lender significant benefits – they’re able to offer loans with lower interest rates as risk is reduced via collateral.

Crypto remittances offer faster and cheaper cross-border payments

Crypto allows individuals to send money cross-border quickly and at a fraction of the cost of traditional banking or remittance services which are often slow and expensive, with high fees and exchange rates, placing a significant burden on people sending small amounts of money.

Crypto such as Ripple and Stellar have been specifically designed for cross-border payments and are particularly useful for migrant workers who want to send money to their families in their home countries quickly and at a low cost.

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Crypto payments are revolutionise the e-commerce industry

Cryptocurrency payments are becoming more widely accepted in both the e-commerce industry and physical stores, offering faster and cheaper transactions for both merchants and customers. 

Bitcoin and Ethereum, in particular, have become increasingly popular payment options as these can be sent instantly with very low fees, allowing merchants to accept payments from customers globally without the hassle of high transaction fees or protracted processing times. 

This is particularly useful for small businesses who don’t have access to traditional payment systems or want to expand their customer base to a global market. (For a comprehensive list of Kiwi companies accepting crypto, see this list which includes online stores, hotels and even car repair and servicing companies.) 

Crypto donations provide increased transparency around charity giving

Crypto is increasingly being used for charitable donations because of the increased transparency and security it offers donors. All crypto transactions are recorded on the blockchain (a public ledger) which allows for a transparent and immutable record of transactions, making it easy to track funds flowing from donor to recipient.

This transparency is particularly relevant to the charity sector, where trust is key to encouraging donations. Using crypto demonstrated that charities are accountable and transparent with the funds they receive, which can help to increase public trust and encourage more donations. There is also a movement towards selling ‘impact’ as a ‘product’ – tracked by the blockchain. This would see people purchase ‘3 meals for a child’, for example, as opposed to making a donation. 

Crypto-based identity verification offers an alternative to traditional identity verification

Identity verification is a crucial factor in gaining access to online services such as financial institutions and social media platforms. Crypto-based identity verification is a decentralised and secure solution for verifying identity without relying on a centralised authority. 

This is useful for those who don’t have access to traditional identity verification services, including refugees or people without official identification documents. Blockchain technology allows individuals to create a digital identity which is unique and secure and allows them to access online services in a private and secure manner.

Real estate transactions made easy with crypto

Crypto is increasingly used to buy and sell properties because it enables real estate transactions to be completed with greater speed, security and lower transaction costs compared to traditional methods. It eliminates the need for intermediaries, including banks or real estate agents, and can potentially offer more privacy to parties involved in the transaction.

The takeaways

Crypto is more than just an asset class – it’s revolutionising finance as we know it – rewriting the rules on who can access financial services; and how freely we transact. But don’t take our word for it…why not ask Google?

Stay curious and informed

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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 April 19, 2023

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