Blockchain technology has taken the world by storm, with blockchain networks such as Bitcoin (BTC) and its Proof-of-Work (PoW) consensus mechanism becoming known by general audiences on a global level.
What this essentially means is that today, more people than ever before know what cryptocurrencies are and how they work. However, what you and many other people might still not be aware of is how they are actually used.
If you are curious about learning how blockchain technology can be used, today, we will be exploring some of the most popular use cases surrounding blockchain technology.
The Main Use-Cases of Blockchain Technology We Have Today
Tokenization and Fractionalization have paved the way for a wide range of use cases within the crypto space.
Tokenization is a process of essentially transforming ownerships and rights of specific assets within a digital form. This means that indivisible assets can be turned into a token.
Fractionalization is essentially a process where the ownership of a token is divided into smaller fractions.
This means that multiple parties can own a percentage of a specific token. So if a token was worth $100,000, for example, 100 people could potentially buy $1,000 of the token each.
With these two concepts, crypto has found its way into many industries.
Money Transfer Use-Case
This is the use-case that was pioneered by the Bitcoin (BTC) cryptocurrency, where blockchain technology aims to disrupt the traditional financial space and, through its ledger system, enable real-time transactions with a reduction in the reliance on third parties, alongside a decrease in the fees associated with making global transfers. This means that blockchain technology can end up saving a lot of people a lot of money that would otherwise be given as a transaction fee whenever they make any payment, and it can efficiently transfer money globally.
Smart Contract Use-Case
Smart contracts are essentially lines of code that execute at the point in time when specific rules are met and get enforced in real-time on top of a blockchain network. This eliminates any middleman involvement and even adds an added level of accountability for any party involved, which is otherwise impossible with traditional agreements.
This can ultimately save a lot of business time and money, alongside ensuring compliance.
Non-Fungible Token (NFT) Use-Case
Non-fungible tokens (NFTs) are some of the most popular types of tokens within the crypto space. They are digital items, such as music, art, GIFs, videos, or anything else, that are created on top of a blockchain network and can then be sold for cryptocurrencies or secondary marketplaces.
They stand out due to the fact that each one of them is fully unique, and all of the metadata is stored within them, which means that the creator can have full rights to the artwork and its original creator can always be traced, no matter who buys the NFT at a future date.
This means that fakes can easily be spotted, as only the original creator will have a specific address or piece of data related to their original artwork. This has, however, over time found its way to other use-cases as well, such as digital concert tickets and digital event invites.
Play-to-Earn (P2E) Gaming Use-Case
In traditional games, players do not actually have the ability to sell in-game items outside of the game and mostly play for pleasure, not being able to earn money in any way within the game directly.
P2E allows players to earn in-game cryptocurrencies alongside NFTs, which they can then sell for cryptocurrencies by completing quests, beating other players in Player-vs-Player (PvP) battles, and so on.
After they get their wallets filled with these tokens and NFTs, they can swap them for Ethereum (ETH), for example, or other more common cryptocurrencies, and swap them on a centralized exchange (CEX) for FIAT currencies and then cash out. This means that they can earn while they play.
Security Tokens in Real Estate Use-Case
With the aforementioned utilization of tokenization and Fractionalization, many new opportunities were introduced for investors.
Platforms and services such as United States Property Coin (USPC) became a part of the crypto space, which aims to offer security tokens that tokenize U.S. real estate portfolios, which can then distribute value on the blockchain using the USPC token, for example.
This introduced a wide range of benefits, such as its usage as a hedge fund against inflation, alongside a lower barrier of entry for new investors when compared to any traditional real-estate investment methods. This also made an asset that might have otherwise not been liquid extremely liquid due to the fact that it opens it to a much broader audience of investors.
Cryptocurrency traders can leverage the early growth of this cryptocurrency, while non-crypto users can use this as an on-ramp to enter the crypto space.
Moving Forward With Blockchain Investments
It is likely that as the widespread adoption and popularity surrounding blockchain technology and cryptocurrencies increases, so will its use cases.
By jumping into this new phase of financial freedom early, people can get prepared for the future that is coming quicker than many of us even expect.