By Kai Sedgwick
Crypto assets have come a long way since Bitcoin. What started out as a P2P payment system has spawned an array of use cases that extend far beyond the original designation of cryptocurrency. While the primary function of crypto assets such as ETH and BTC is a matter of some debate, what’s indisputable is that digital currencies can now be used for more than merely paying for goods and services. Here are five use cases for crypto assets that demonstrate the extent of the fintech revolution taking place.
Use Case 1: Digital Cash
Conceived as a peer-to-peer electronic cash system, if the title of Satoshi’s whitepaper is to be taken at face value, Bitcoin lived up to its billing for the first five years. Before the mainstream came to terms with Bitcoin, it fueled a nascent digital economy that included black market goods (Silk Road) and gambling (Satoshi Dice). It was also accepted by hundreds of tech-savvy merchants and early adopters, for purchasing everything from graphics cards to t-shirts.
As network fees began to rise, forcing numerous merchants to drop support for BTC, a growing cult of Bitcoin Core loyalists, who would come to be known as maximalists, started advocating a store of value (SoV) narrative over that of a medium of exchange (MoE). With BTC becoming unsuitable for low cost payments, the P2P torch passed to Bitcoin Cash, which sprung to life in mid-2017 as a fork of Bitcoin. The BCH network has since maintained its community’s goal of facilitating fast and low-cost payments, with thousands of merchants accepting bitcoin cash in store and online.
Meanwhile, during the 2017 ICO boom, scores of crypto projects sprung up with generic payment tokens attached to them as the justification for raising funds. When the tide went out on the crypto market in early 2018, it became evident that native ERC20 payment tokens simply weren’t feasible, with most dying a slow death due to high velocity and low liquidity. The crypto assets that survive today as P2P currencies are largely limited to pre-2015 coins such as dash and litecoin.