Crypto and Utility: Why It Matters

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Admin

Sep 29, 2021

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The future of cryptocurrency rests on its utility. That may seem like a bold statement, but it’s true: just how useful cryptocurrency can be, will define its trajectory as a critical component in the future of decentralized finance.

What does utility mean?
By definition, utility is a term that is used to refer to things that are beneficial, useful, and profitable. When we turn our attention towards cryptocurrencies and their potential utility, however, this scope grows to include near infinite outcomes related to the future of decentralized finance, business, and everyday life. 

Why is crypto and utility important?
We live in a world now where soccer players can get paid in cryptocurrency for signing up with a particular team. More and more businesses are enabling crypto payments, and some are even paying salaries in crypto. You can now book your holiday using crypto, and soon enough, it’ll be commonplace to pay for your Friday night pizza using Bitcoin or another cryptocurrency. There’s another element to it too, and that is distinctly linked to the inherent utility of each coin or cryptocurrency. In this sense, utility refers to digital tokens built on specific blockchain ecosystems. The most notable blockchain ecosystem currently is Ethereum which offers diverse opportunities for utility, through its ecosystem of blockchain applications. This means Ethereum or the ETH token can provide direct utility to its users and ‘hodlers’. As such, Ethereum is more easily used to build blockchain-based projects, compared to the blockchain infrastructures like Bitcoin. This may increase the value of Ethereum in the future. 

Why is crypto adoption taking so “long”?
Many people think that crypto adoption is taking terribly long. The truth, however, is that the crypto adoption journey is moving faster than most can keep up with. The Bitcoin whitepaper was published in 2008. That’s just over a decade ago, and the world of finance has already changed so much as a result of decentralized technology. Blockchain technologies are firmly set into providing opportunities for innovation, and the world has quickly taken note of the infinite potential of crypto utilities.

Crypto payments and crypto trading
Of course, the easiest shift into crypto and utility can be seen in the way it changes our everyday lives. Being able to pay for goods and services using crypto, and being able to trade in crypto, are the easiest innovations to see. Utility, however, goes far beyond just usefulness in our everyday lives. 

What are the other uses for crypto and blockchain?
Cryptocurrencies and blockchain technologies provide ample opportunities for innovation, growth, and new ways of doing things. Blockchain technologies are already in use in healthcare, finance, and other important sectors across the globe. The real estate sector has already begun accepting cryptocurrency for rental deposits, and the purchase of properties too. The music industry, and many other industries, have also begun adopting blockchain technologies, such as NFTs, for their benefit.  Similarly, cryptocurrencies have created new investment opportunities for businesses and individuals alike. 

What should I know about the coins I choose to buy? 
When you consider your crypto purchases, it’s helpful to understand the potential utility of the cryptocurrency you’re considering. Learning about the crypto trading volume, for example, is important. But, beyond the popularity of the crypto you buy, it’s also important to understand the ecosystem it's built on, and its associated utility. The utility of a particular cryptocurrency is directly linked to its future, its value, the problems it solves today, and the solutions it may offer in the future. 

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Always remember: Crypto trading is extremely risky due to the volatile nature of cryptocurrencies, you should never risk more than you are willing to lose.

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