The value of cryptocurrency beyond speculation：bitcoin’s alternative use cases

2023-01-12, 07:50

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**<font size=5>[TL; DR]</font>**
🔹 Many people use cryptocurrencies, such as [Bitcoin](https://www.gate.io/trade/BTC_USDT) for speculative purposes.

🔹 Firms and individuals can use cryptocurrencies for making payments and donations.

🔹 Companies can integrate cryptocurrencies on their websites as another means of payment.

🔹 The value of cryptocurrencies increases when people and institutions use them as a medium of exchange.

## Introduction
Cryptocurrency is one of the best innovations of the century which has transformed the way businesses sell their  products and procure goods and services. However, over the years many individuals and companies have adopted cryptocurrencies as a means of payment and as an investment class. Currently, the common perception is that cryptocurrencies are useful for speculative purposes. This article explores the other uses of cryptocurrencies, apart from speculation.

## What is cryptocurrency?
Cryptocurrency is a form of digital currency that exists on the blockchain and uses cryptographic technology. It also acts as a decentralized medium of exchange, verifiable on the blockchain. Its unique functions are based on encryption which facilitates its transfer and utility. The main drivers of the value of cryptocurrency are the market forces of demand and supply. 
On the other hand, blockchain is the public ledger which records and stores all the transactions that occur on the network. As such, everyone who has the know-how and network can easily track the transactions that take place on the blockchain.
### Crypto currency speculation
Due to the volatility of cryptocurrencies some people label them as get rich schemes or speculative bubbles. For example, over the years many people have viewed [Bitcoin](https://www.gate.io/trade/BTC_USDT) as an investment asset that can generate much profit. In the end, they have concluded that cryptocurrencies are for speculative purposes only.

It is true that cryptocurrency such as [Bitcoin](https://www.gate.io/trade/BTC_USDT) are speculative assets because their prices fluctuate constantly. Also, most of these cryptocurrencies are not backed by anything. However, certain stablecoins are backed by various assets including precious minerals or fiat currencies.

[Bitcoin](https://www.gate.io/trade/BTC_USDT) is probably the most speculative cryptocurrency in the market. This is due to its first mover advantage in the crypto space and its popularity. As a fact, [bitcoin is the number one cryptocurrency](https://www.gate.io/learn/category/[Bitcoin](https://www.gate.io/trade/BTC_USDT) "[Bitcoin](https://www.gate.io/trade/BTC_USDT) is the number one cryptocurrency") based on market capitalization. Speculation, also called trading, is the process of buying and holding an asset hoping that its crypto value will increase or decrease in the future. If the value rises, the speculators will sell the cryptocurrency.  The reason why people mostly use cryptos for speculation instead of buying goods and services is its high volatility.

![](https://gimg2.gateimg.com/image/article/1673509642111.png)<center><font size=1>People can trade cryptocurrencies- Datadriveninvestor</font></center>
### Crypto and payments
There are also many people who use cryptocurrencies as means of payment for goods and services. One advantage of using cryptocurrencies to buy goods and services is that many websites accept them. Already, some countries [such as El Salvador ](https://www.gate.io/blog_detail/1912/the-road-to-[Bitcoin](https://www.gate.io/trade/BTC_USDT)-in-el-salvador "such as El Salvador ")and the Central African Republic have made cryptocurrencies legal tenders. El Salvador only accepts BTC as a medium of exchange in the country. [According to the El Salvador President Nayib Bukele](https://www.gate.io/bitwiki/detail/791 "According to the El Salvador President Nayib Bukele"), [Bitcoin](https://www.gate.io/trade/BTC_USDT) helps over 70% of the country’s population to make easy transactions since they do not have bank accounts.

The other reason cryptocurrencies are popular is that they make it convenient for migrant workers, scattered around the world, to send funds back home. This is because it is cheaper to remit funds using cryptocurrencies than fiat currency. More significantly, [Bitcoin](https://www.gate.io/trade/BTC_USDT) is valuable since many people around the world accept it as a means of payment. Now, as more people accept digital currencies as a medium of exchange their values are likely to increase in the future.

### Crypto and charity
The adoption of cryptocurrencies for donations worldwide explains another reason why the crypto values continue to increase. [Bitcoin](https://www.gate.io/trade/BTC_USDT) and Ether (ETH) are the main cryptocurrencies used for philanthropic purposes. For example, [after Russia’s invasion of Ukraine](https://www.gate.io/blog_detail/1020/Ukraine--Crypto--And-War--A-Bittersweet-Experience "after Russia’s invasion of Ukraine") many people around the world have donated cryptocurrencies to help Ukrainian citizens who are facing a humanitarian crisis.

Cryptocurrencies have also been used to assist refugees in various countries of the world. This is because refugees are poor and lack basic material. A specific case where people donated cryptocurrencies to help alleviate a humanitarian crisis was in India. When India was affected by the second wave of Covid-19 many individuals and institutions donated funds using cryptocurrencies. For example, the co-founder of Ethereum, Vitalik Buterin donated $1 billion worth of Shiba inu (SHIB) tokens towards this case.
### Crypto and NFTs
Non-fungible tokens (NFTs) are an emerging type of digital assets that exist on the blockchain. They are different from cryptocurrencies because each NFT is a one-of-its-kind digital asset. People mostly use NFTs on social media platforms and other virtual communities such as the metaverse.

The emergence of NFTs has helped to increase the utility and value of cryptocurrency. As such, people cannot solely use cryptocurrencies for speculation. For example, individuals and institutions use cryptocurrencies to purchase NFTs. The most popular cryptocurrency for that purpose is ETH. The reason is that most NFTs exist on the Ethereum blockchain.
Likewise, when minting NFTs people need cryptocurrencies to pay gas fees. Similarly, when NFT holders sell their NFTs they get cryptocurrency in return.

![](https://gimg2.gateimg.com/image/article/1673509695222.png)<center><font size=1>Non-fungible tokens (NFTs) - Wired</font></center>
## How institutions can move from speculation to application
There are many companies that have adopted blockchain technology to increase the reach of their products and services. For example, some of these firms have developed applications which enable many people to access their products. Most of these applications make it easy for customers to buy their products using cryptocurrencies.

Some companies have ventured in the decentralized finance (DeFi) sector through establishing digital products and services. For instance, some of these institutions offer crypto lending and borrowing services. Others have developed metaverse platforms which enable brands to be visible on the international stage. Interestingly, it is possible for some brands to establish digital offices using the metaverse technology.

## How companies can use cryptocurrencies
Apart from being directly involved in the decentralized finance sector, many companies can also leverage on cryptocurrencies to increase operational efficiency.  Let’s look at a few ways that firms can do so.

Paying employee salaries using cryptocurrency: Businesses can pay their employees using cryptocurrencies, especially stablecoins such as [Tether](https://www.gate.io/trade/USDT_USDT) USDT. Of course, they can have an arrangement to pay part of the salaries in fiat currency. 
Integrating cryptocurrencies into the website: If you integrate cryptocurrencies into your website it allows the customers to make payments using them.
## Conclusion
As we discussed above, cryptocurrencies have other uses beyond speculation. That is why [Bitcoin](https://www.gate.io/trade/BTC_USDT) is valuable. People use it as a medium of exchange. Individuals and firms can make donations, make payment for goods and services as well as mint or buy NFTs using cryptocurrencies. On the other hand, companies can integrate cryptocurrencies on their websites to enable their customers to use them for making payments.
## FAQs on value of cryptocurrency and NFTs
### Do cryptocurrency and blockchain have any real value?
Cryptocurrency has value because it functions as money and investment assets. Basically, people can use cryptocurrency to buy goods and services. Most of the tokens support the functions and products of their native blockchains. Investors also invest in cryptocurrencies the way they do with stocks and commodities. Therefore, the blockchain has real value because all the cryptocurrencies and other digital assets like NFTs exist on it.

### What is the real value of blockchain?
The blockchain has value as it removes the role of intermediaries which increases business costs and delays. It also creates transparency since anyone can view all the transactions carried on the blockchain. Also, no one can falsify information, alter or replicate it. The blockchain has enabled the adoption of new business models which are cost effective and global in nature.

### What is the total value of the crypto market?
The total value of the crypto market is the value of all the cryptocurrencies that are on the market. This includes the value of all cryptocurrencies that are in crypto wallets and on exchanges. Technically, the total value of the crypto market changes every minute when the prices of crypto tokens and coins fluctuate..

### Is crypto value speculative?
People use cryptocurrencies for speculative purposes as well as means of payment. Most cryptocurrencies are worthwhile investment assets because their values keep on changing. Also, individuals can hold their cryptocurrencies for long periods and only sell them when their prices rise.

### Is crypto the future of money
Cryptocurrencies function as medium of exchange. It is the future of money since people around the world can easily access them. Individuals do not need to have bank accounts to use cryptocurrencies. Instead, they should have gadgets that support the internet such as mobile phones. In addition, cryptocurrency is borderless, cheap and enables fast transactions.

### What is the next big cryptocurrency to explode in 2023?
The market expects [layer-2 blockchain](https://www.gate.io/blog_detail/357/essentials-for-crypto-newbie-what-is-layer-0-layer-1-and-layer-2 "layer-2 blockchain") to rally in 2023. However, ETH is probably the cryptocurrency that will explode in 2023. This is because many institutions and retail investors are adopting it. If the Shanghai upgrade is successfully completed and gas fees decrease the value of ETH is likely to rise sharply.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
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