Crypto is everywhere these days, and unless you've been living under a rock, you've almost certainly heard of it. Crypto has become a very popular investment vehicle, with many types of cryptos - most prominently Bitcoin - having seen a massive spike in its value of late.
However, while investment has been the most popular way that people use cryptocurrency, it's not the only one, and many have wondered, "What is cryptocurrency used for?" As noted by the financial and crypto experts at SoFi, "Cryptocurrencies can act like real money—in a sense, they are real money—but they take a digital monetary form and are not managed or governed by any central authority." This means that they have a variety of uses other than investing.
Here's a look at 3 ways to use the popular electronic currency.
1. Investing
Of course, investing remains the most popular use of cryptocurrency. Investors can buy cryptocurrencies through exchanges like Independent Reserve. Many coins have enjoyed major successes of late. Bitcoin, for example, has increased almost 40% in the past month, and as of this writing, it sits at $51,650, just off of its all-time high. However, there are a variety of other types of cryptocurrencies, many of which have also seen massive gains of late. Etherum, Cardano, and Polkadot have all seen major increases in the past week, and these coins are much less expensive than Bitcoin, giving investors a chance to invest in full coins - rather than fractional shares - at a more affordable price than Bitcoin.
To be clear, investing in Bitcoin does not come without major risk. Bitcoin is highly volatile, and anyone who invests in this medium must have risk tolerance. Of course, investing remains the most popular use of cryptocurrency. "Investors can buy cryptocurrencies through exchanges like Independent Reserve."
2. Exchanged As Currency
Currency, of course, is meant to be exchanged for goods and services, and cryptocurrency literally has currency in its name. As such, it is becoming easier across the world to use certain cryptocurrencies as a normal form of currency, just like you would with the dollar or yen. For example, Tesla - founded by crypto-booster Elon Musk - recently announced that they would begin to accept Bitcoin as payment. This announcement increased the price of the coin.
Furthermore, other coins are designed to exclusively mimic the price of the dollar, like Tether. It seems increasingly likely that these coins will be used more in the future.
3. Exchange Earnings And Transactions
Thanks to the variety of investment platforms, more people are turning to person-to-person sales of crypto. Not only can they make a profit on an increase in the value of cryptocurrency, but they can also reap additional profit from transaction fees. Indeed, this is making the currency more and more lucrative for people, and the rise in person-to-person networking platforms is assisting in this change.
Crypto Conclusion
There is no question that cryptocurrency is becoming more popular. More and more people throughout the world are investing in some sort of cryptocurrency, helping to boost its price and increase demand. As the available uses of crypto continue to expand, it seems likely that the area will become even more lucrative. Every month new retail investors, investment firms, and financial institutions are joining the crypto revolution.
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