From Speculation To Fake Swords, Cryptocurrency Struggles For Use Case

There was a time when it looked like more businesses would accept bitcoin as a means of payment. that’s… [+] stalled. and newcomers talk a lot and have high hopes, but beyond the white papers… where are the real use cases? is there any?

in the local store of a small town, my small town, there is a coin machine that allows you to buy bitcoins btc. is collecting dust. I’ve never seen anyone use it.

Reading: Bitcoin use cases

however, of the hundreds of cryptocurrencies that populate your gemini account, bitcoin has the best use case. you used to be able to buy tesla tsla with it. now you can’t in florida, you can buy real estate with him. cipriani residences miami, a new luxury condominium project, has partnered with ftx, a cryptocurrency exchange company, to start accepting all major cryptocurrencies to purchase properties there.

“Bitcoin is the leading cryptocurrency due to its brand recognition, market capitalization and daily volume,” says Jose Arnaiz, CEO of Realverse in Valencia, Spain, an augmented reality solutions company that creates maps using the navigators. “The problem with bitcoin for the use case is that it’s not designed to support small, fast payments,” he says, adding that bitcoin’s lightning network could solve some of this problem. this has been in the works since 2016.

Other coins, like lumens for the stellar open source fintech network ( xlm ), are supposedly used for remittances, though I haven’t seen any data on how it’s actually used or if it’s increasing.

“where ripple xrp is likely the future of institutional and financial currency transactions, potentially replacing swift, stellar bridges the gap between peers and enables a fast and extremely affordable transaction fee (below a penny) to send money from person to person”. person,” says Rodolphe Seynat, co-founder and strategic investor in a company called Serenity Shield in Belgium. are developing a secure decentralized solution to protect access to lost digital assets.

ethereum (eth) is used to pay for transactions and other fees on the ethereum blockchain. investors buy eth believing they are investing in the future of the ethereum blockchain: more users, more fees, and more demand for eth.

Aside from blockchain-based tokens used on specific networks, what are the use cases for these coins as they struggle in a world where central bank digital currencies threaten to make them disappear, even making them illegal, as china has done, with varying degrees of success?

The recent explosion of the Luna Luna blockchain terra coin, now worth $0.0001 after trading at $118 in mid-April, serves as a reminder that many of these coins have no real value. startups in the space are still trying to change that, but so far that mostly means adding value to their own ecosystem. When most of us think of a use case for a coin, we think: can I bite into a souvenir in my hotel with it? can i buy groceries with it? For cryptocurrencies, it’s mostly about the ecosystem that the token inhabits: think of tokens earned in a game that can be spent on items purchased in a game or in some virtual world.

For example, the arnaiz token, called coast, is used in the seacoast mapping platform. the only way costa token holders can buy a ship with it is if they exchange costa for fiat.

See also: How can I figure out where I created my Bitcoin wallet? – Crypto Asset Recovery

however, arnaiz says the token can be used to guarantee reservations for berths, restaurants, hotels and boats.

It is unclear how many of these tokens are used to perform those transactions. the company said that they were working on agreements for direct payments with companies that will allow the use of its token outside the coastal ecosystem. these agreements would expand the range of services that its investment partners bitnovo and ok mobility are already offering in different coastal countries. As for the ports, they told me that their goal is that some 180 ports in Spain and Portugal, managed by one of their partners, allow docking fees in their cryptocurrency. They said that they will later expand to the rest of the Mediterranean and the Caribbean.

the platform is everything. the ecosystem is everything. that’s the only use case, outside of bitcoin and the few rare examples like dubai and miami real estate.

Take avalanche avax for example. this has replaced polkadot dot and solana sol as everyone’s new favorite non-ethereum blockchain. investors love avax because of the avalanche growth, but no one can use avax to buy a sandwich. (except maybe a fictional one in the metaverse). its value has plummeted from around $138 in November to around $27 today.

why would anyone want avax if they’re not using avalanche? because it’s an investment, and that’s it.

“The reality in today’s emerging blockchain technology is that data monetization through fiat services has gone a step further and become tokenization,” says seynat. “you buy the governance token within a specific project or ecosystem because that blockchain is growing and users want or need the token to do business there, whatever that is.”

chung dao, co-founder and CEO of oraichain, a scalable web3 dapps solution based in vietnam, said that many of today’s blockchain tokens offer “little outside of their ecosystem”.

The rise of decentralized finance has given some of these newer coins additional utility and value in recent years by allowing users to gamble and earn rewards (or performance payments) for holding the coins.

“The rise of blockchain scaling solutions is becoming a core aspect of the defi ecosystem,” he said of a token use case related to blockchain projects. “A number of blockchain teams and communities are creating technology solutions that provide users with additional value and utility outside of their platform. some platforms are becoming more interoperable, forming a network where multiple blockchains can communicate,” she said, naming one called cosmos atom.

Other use cases, of course, are metaverse platforms.

mana is the native token on the decentraland platform ( mana ) and I have it, but decentraland crashes my computer and the one time I used it, I spent hours creating my avatar and then another 10 boring minutes walking into walls alone. why do i own this money loser? because as an investor I believe in the metaverse. I’m being patient.

See also: Bitcoin vs. Bitcoin Cash vs. Bitcoin SV: Whats the Difference? – BlockSocial

“It’s not surprising that mana’s main function is to power in-game purchases, but I can think of other uses too,” says rafaeul zeitunian, co-founder & grand time cso out of london. They bill grand time as a “gig economy market” where you can get paid in your cryptocurrency (grand), which can be exchanged for the most liquid polygon (matic). zeitunian says you have mana for investment, really. “You buy it and keep it for long-term profit as the project evolves. it’s very popular right now, so there’s a chance it could become a very successful metaverse. and you own it to bet.”

It seems, for now, that the only real use case for cryptocurrencies is as a new investment vehicle. these coins have become a way to invest in tech startups that few investors understand or even use. but if exchanges like market leader coinbase are any example, treating these tokens as “securities” (a new kind of stock) is the only real use case, so far.

The best use case for cryptocurrencies could also be simply as an alternative investment that helped create… [+] the cryptocurrency exchange industry, of which coinbase is us. uu. Leader. (photo illustration by rafael henrique/sopa images/lightrocket via getty images)

“In the future, I see bitcoin becoming more of a store of value than a means of payment,” says dao. “I believe that companies and corporations will add bitcoin to their balance sheets instead of spending it on their expenses. the rise of the dollar tether could be the ideal replacement for bitcoin as a means of payment given its stability, dollar-like structure, and transaction speed as well,” he says. “around the world many crypto employees are slowly accepting usdt as payment. this could be extended to more traditional industries.”

tether usdt has also been used for transactions between smaller companies that interact between russia and china. USDT has come under much publicized scrutiny regarding its reputation as a mode of payment, as a means of avoiding penalties, and especially regarding the transparency of its reserves. while the people behind tether insist it’s fine, it’s seen its risks rise with the recent redemption of more than $17 billion since the luna death spiral, notes ahmed ismail, president and chief executive officer of fluid, a AI-based smart order routing protocol and cross-blockchain liquidity aggregator.

“Traditional finance took decades to evolve to where it is today,” says ismail. From the high-octane, high-risk/reward era of debt and equity capital markets in the 1980s, 1990s, and early 2000s to the dot-com bust, Enron scandal, and financial crisis Since 2008, regulators have moved to protect investors by setting new standards for issuers and market participants such as investment banks and brokers to follow. These standards and rules protect the traditional financial ecosystem.

“The cryptocurrency industry won’t take decades to mature, but I think it will come faster than traditional finance,” says ismail.

Regulators have already begun to design frameworks and participation rules for companies and projects. it’s clear much more is needed, particularly in defi. In the moon debacle, there were promises of returns that no traditional securities regulator would have allowed.

“Proper regulation that safeguards the interests of token users and investors will be what will eventually ensure wider adoption of cryptocurrencies and more real-world use cases,” says ismail. “That’s going to be very important.”

*the author of this article owns bitcoin, decentraland, lumens and polkadot

See also: The Case Against Crypto

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