Ethereum, Filecoin, Caradon, Dogecoin, Bitcoin... what are cryptocurrencies for beyond their value?

Cryptocurrencies are in the eye of the storm. Attacked from several fronts, the only way they have to defend themselves is to prove their usefulness. Do they serve anything more than speculation? Let's check it out...

They came out of nowhere a few years ago, and we still don't know how far they can go. Its quote is like a roller coaster. One day they break records, and the next day they fall by 40%. What can we expect from cryptocurrencies?

Lately, they are in all the controversies. After a few months in which Bitcoin, Ethereum, Dogecoin, and others, have broken trading records, in a few days, they have fallen more than 30% on average.

The reasons are varied. After praising them and approving their use to buy Tesla cars, Elon Musk stops accepting Bitcoins because they are highly polluting. Just a few days later, China bans economic operations with them. And since yesterday, Iran also prohibits the mining of cryptocurrencies for its high consumption of light, which is causing cuts in large cities.

And as if that were not enough, to mine cryptocurrencies you need powerful graphics cards, so for months, there is no stock of cards because of the semiconductor crisis and because they are bought by all miners, and millions of people can not renew the computer, or buy a new one.

The reality is that most of these attacks are right: mining cryptocurrencies consumes a lot of electricity and that leads to resource depletion, pollution, and even power outages in large cities.

These are highly volatile and speculative securities. It is not acceptable for a cryptocurrency to rise or plummet because of a tweet from Elon Musk, as has happened with dogecoin. They are very risky investments except for the rich.

Ethereum, Filecoin, Cardano, Dogecoin, Bitcoin...why are there more than 7,000 cryptocurrencies? Do they really have a utility beyond the intention of speculating on them and becoming a millionaire effortlessly? Let's check it out.

What is a cryptocurrency?

Criptomonedas

To discover the true value of cryptocurrencies, you would first have to agree on what they are. Because depending on who you ask, it will tell you one thing or another.

Technically a cryptocurrency is a unique chain of ones and zeros that the control system of that currency identifies as a token, an item that has value.

If you use that object to buy and sell, it's technically money, and so say its users. A currency, in short, not unlike the pieces of crushed metal that were used as money thousands of years ago.

The problem – or the blessing, depending on who you ask – is that cryptocurrencies are not regulated or backed by any bank or state– that's why they're so volatile. Many call them the currencies of the people or the people because it is the people who create them and give value, without intervention by the state, banks, or companies.

As long as they are used to buy and sell, as long as someone pays more than they are worth to get them, their price will go up. But if they stop caring or panic breaks out, they can lose all their value in a matter of hours.

They may be a currency for their users, but at the official level, for banks or states, they are merchandise that is used to do business, such as gold. They do not consider it a currency.

Beyond its definition, what uses do cryptocurrencies have? Let's look at some that are already up and running.

Buy in shops

The most obvious option is to use it as a real currency. Many online merchants and services accept payments in Bitcoin, Ethereum, and some more.

The Microsoft store allows you to buy apps and games for Windows and Xbox using cryptocurrencies, through BitPay. Dell also allows it, via Coinbase. Like the popular handmade produce store, Etsy.

Shopify accepts more than 300 different cryptocurrencies,

If you have to go on a trip, Expedia accepts Bitcoins. Like many other travel agencies and airlines, you can find on Bitcoin Travel.

The aforementioned BitPay has a Mastercard credit card that instantly converts your Bitcoins into dollars, to pay with them in any trade. So technically you can pay with Bitcoins in any store in the world:

Criptomonedas

The dark side: drugs, arms trafficking...

Dark Web

One of the main features of most cryptocurrencies is that they are anonymous. They work similarly to cash– their owner is the one who has the money in their pocket or wallet, but that money is not associated with any name.

When a transaction is made with a cryptocurrency, although that transaction is recorded on the blockchain and cannot be altered, it is an anonymous transaction. The only thing that is recorded is the movement of cryptocurrencies, but no names or identifiers are used, beyond the IP address.

There are even cryptocurrencies such as Monero or Verge, where even transactions are private, and cannot be seen.

The fact that no names or identifiers are used, makes cryptocurrencies commonly used on the Dark Web, being used for illegal transactions of drug sales, weapons, money laundering, and even worse.

To make donations

Donaciones criptomonedas

But not everyone who uses cryptocurrencies has dark purposes.

One of the most common uses is to make donations. There are many NGOs that have a Bitcoin or Ethereum wallet and accept anonymous donations.

These include Save the Children, Internet Archive, Free Software Foundation, Wikimedia Foundation, and many more. You can check the list in Bitcoin for Charity.

To help NGOs

RotoMoon

Some cryptocurrencies do not intend to speculate. Or at least, they speculate with conscience...

Jokes aside, the truth is that different cryptocurrencies aim to generate income for solidarity initiatives.

A close example is RotoMoon, a cryptocurrency that was born in Forocoches. In just 48 hours it generated a value of 2 million euros.

This token charges a 5% commission on each transaction that goes to an NGO that helps homeless dogs and cats. It has already expanded internationally and has donated money to NGOs in Spain, the United States, and Brazil, among others.

Payments between individuals

Another of the uses of cryptocurrencies, and also its main strength, is that it allows anonymous and secure payment between individuals.

This can be done in a direct wallet-to-wallet transaction. Simply giving the wallet identifier to another person, to simulate your email PayPal, that person can enter cryptocurrencies. And vice versa.

Speaking of PayPal, the popular payment platform already agrees to pay or charge with cryptocurrencies. At the moment it works with Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Of course, you can't play with them in stores using PayPal.

PayPal

Instant micropayments

Conventional online payment systems only accept payments from a certain amount, and the process usually takes 1 or 2 minutes.

One of the advantages of cryptocurrencies is that you can make payments as small as you want, even 1 euro cent, and the transaction is fast, secure, and anonymous.

What is the point of this? For example, to set up a decentralized social network like Steemit, where you charge a few cents in cryptocurrencies for writing good reviews.

Steemit

In the future, this system will be used to charge 1 euro cent for each visit your video receives, or each like you receive in your post from a social network, for example.

Or by correcting a photo, looking for a synonym, or any other micro-tasking that you can perform in seconds, and that someone else is willing to pay for it.

Charge for sharing your free hard drive

Storj is a decentralized cloud service. Instead of storing data on servers, it is stored encrypted on thousands of computers around the world. This way they can't be spied on because they are very distributed, and they are completely safe when using Blockchain.

Storj

Storj also offers the option to rent you hard drive that you have free on your PC to be part of the Blockchain, and pay with cryptocurrencies.

His great legacy: the blockchain

We don't know how long-term successful cryptocurrencies will be. But we are convinced that its main legacy, the blockchain, will have many advantageous applications in the coming years.

Blockchain

Most cryptocurrencies, such as Bitcoin, are organized in the form of Blockchain or blockchain, a kind of decentralized database. All the transactions that bitcoin has generated throughout its history, absolutely all of them, are registered anonymously in a chain of linked blocks that for its alteration require that the majority of users of the P2P network that supports this chain, approve.

In other words, all the data associated with a cryptocurrency is chained, and to change something in that chain, thousands of computers must give their approval at the same time, which are connected to that network.

This system is almost impossible to hack because to alter a transaction you would have to hack thousands of computers at the same time, scattered around the world.

This security allows you to use blockchain-based technologies to carry out banking transactions, sign contracts, create a Wikipedia that cannot be censored, or Blockchain-based search engines.

To buy NFTs and ensure their operation

beeple

Precisely, one of the Blockchain applications that have most impacted in recent times is the NFT or Non-Fungible Token. That is non-consumable objects.

NFTs solve a problem that was thought to be insoluble: ensuring the originality of a digital article.

Anything that is distributed over the Internet, from a photo to a text, a drawing, a video, etc., at the moment it is converted to zeros and ones, can be made infinite exact copies.

NFT technology uses blockchain to give a digital file the category of unique or original, and since no one can alter the blockchain, no one can fake it. This allows, for example, you to sell or buy a digital drawing, a meme, or whatever you want, as an original object. And although there are millions of copies, you have the original because it is certified by the blockchain.

NFT opens the doors to the collection of digital art, drawings, photographs, and original content, at the same level as a painting or a physical collector's item. Beyond the Afrikaans for which millions are being paid right now...

Preventing censorship and abuses by governments

Conventional currencies are in the hands of governments and central banks. A government law can depreciate the currency and lose your savings. Or, in the case of authoritarian governments, an unjust law, or a mistake, can lock your bank accounts and run out of money.

This can never happen if you have money invested in cryptocurrencies, because governments or banks can not control them, even if they wanted to, being distributors for millions of computers around the world.

Censura

Many countries censor websites, blogs, newspapers, and other content. Websites, search engines, encyclopedias, and many other services are being implemented using blockchain so that they cannot be censored by governments.

A haven from inflation

Cómo afecta la inflación a tus ahorros

From an economic point of view, one of the advantages of most cryptocurrencies concerning traditional currencies is that they are a refuge against inflation, such as gold.

This is because most of them have a finite number of coins, marked by the algorithm that generates them. For example, in the case of Bitcoin, there will only be 21 million Bitcoins. Being a finite number is a value that is not influenced by inflation, like real money, where there is no limit to the number of notes you can make, depending on the economy.

So one of the functions of cryptocurrencies could be to serve as a safe haven when there is inflation. But at the moment, it is not. The CPI has risen more than in the last 15 years in the United States, and instead, Bitcoin does not go up and is below lows.

We have seen several interesting uses of cryptocurrencies. Do they justify the controversies they generate?

Lineesh Kumar

"Lk Techsky is Expertise in covering technology news, reviews, producing quality tech videos, graphic designing, VFX editing, and more..." facebook instagram linkedin

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