Cryptocurrency has become a bit of a buzzword lately. Understanding cryptocurrency is a challenge though. It is similar to regular money, but there are plenty of differences.
The biggest difference between cryptocurrency and regular money is that cryptocurrency isn’t regulated by a government agency, but understanding the nuanced differences is more difficult.
Instead, focus on how cryptocurrencies can be used. By understanding how they can be used, you’ll come closer to understanding Bitcoin, Ethereum, and other cryptocurrencies better.
Here are three ways cryptocurrencies are being used, and how they are going to be used more and more in the future.
Smart Contracts Without the Need for Intermediaries
Although Bitcoin is the most well-known cryptocurrency, it isn’t the only one, and it isn’t necessarily the most innovative one. Ethereum is a cryptocurrency that’s worth your attention as well.
This form of cryptocurrency focuses on making smart contracts easier and more affordable because it enables you to enter into contracts with other people without an intermediary.
It is used in:
- Buying and selling goods
- Insurance claims
- Letter of Credit in trade finance
- Royalty payments
A real-life example might be when you rent an apartment. Instead of trusting your new landlord to receive your payment and provide you with a key to enter, you can use Ethereum in the Blockchain. If the key isn’t turned over to you in time, a refund will be released to you automatically.
As a Form of Payment for Freelance Services
Chances are, you won’t be paid in cryptocurrency if you’re working a traditional job, especially if that job is funded by the government. However, there are plenty of other jobs that may be willing to issue payment in the form of cryptocurrency.
Freelance jobs are the most likely to offer cryptocurrency, like Bitcoin, at the moment. But, in the future, you will find many other agencies and employers will be offering cryptocurrency as a form of payment.
When Purchasing Goods and Services
If cryptocurrency is supposed to be a kind of money, it makes sense that you should be able to spend that currency just like you would spend money. However, spending cryptocurrency is a bit challenging. Because it isn’t regulated like other currencies, many retailers aren’t prepared to accept them as a form of payment.
But as cryptocurrencies have increased in popularity, some retailers have decided to get in on the action by accepting Bitcoin as a form of payment.
It’s not just off-the-wall, unknown businesses that accept Bitcoin as a form of payment either. Many retailers you would recognize accept Bitcoin including:
You can even use cryptocurrency to buy jewelry for your loved ones at Reeds Jewelers!
If you don’t understand cryptocurrency, don’t worry. As it continues to become more and more popular, understanding exactly how it works and how you can use it will become easier. Prepare for a world where cryptocurrency is the norm and invest in one or two cryptocurrencies so you’re ready for what the future of money holds.