What are cryptocurrencies for?
Since cryptocurrencies appeared, several questions began to arise in people: Is it worth investing in crypto assets? They are going up, right? How can there be so many?
Asking these questions about cryptocurrencies is equivalent to the fact that when the Internet emerged, we only cared about the evolution of the price of "dot com". Just as in that case we would be losing all its potential, in the same way, in the case of cryptos, those who only care about their price are missing the enormous value that they can give.
There is clearly a reason for that to happen. The quintessential cryptocurrency, Bitcoin (which was also the first), pursues the goal of becoming money, some say as a means of payment, others as a safeguard of value and some even dare to project it as a unit of account. As it has a limited issue, its price fluctuates based on changes in demand, making it an asset that can be used to speculate.
Why if the rest of the cryptocurrencies do not necessarily want to be money, they are called "coins"?
First of all, let's remember that cryptos are technologies that allow us to transmit value over the Internet without the need for an intermediary (government, banks, etc.). Any use case where it makes sense to remove that broker (for a trust issue for example) may be an opportunity to build on crypto.
The use of these platforms has a cost and to pay it it is necessary to do it with the native cryptocurrency of the same blockchain (Bitcoin for the Bitcoin network, Ether for the Ethereum network, Something for the Algorand network, etc). This demand is, in part, what gives them value and therefore a market price *.
The use of cryptocurrencies makes sense far beyond the money function. Although clearly this is the main destination of this technology today, it is important to understand that the possibilities are much broader. Cryptocurrencies and their blockchains can be used to give decentralized digital Identity, unalterable data registration, Gaming and content development and more.
On the other hand, just as crypto is not just money, it does not apply to any use case either. Today, as they became fashionable, many people, companies and governments want to move any process to Blockchain. But before implementing solutions in this technology, it is essential to ask yourself: Why do I want to decentralize? Is it worth developing a more complex process simply to avoid having to trust a broker? And only then make the decision.
Cryptocurrencies are here to stay. It is a technology that helps us to transmit value over the internet without having to trust intermediaries. Only in the future we will be able to clearly discern the full potential of this tool and in cases it is useful and what cases are not.
Posted Using LeoFinance