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Real World Crypto Applications And Their Benefits

02 May 2024 10:30, UTC

We can all get very excited about cryptocurrencies and feel acute pleasure as the value of the assets we hold rises. Many have also experienced the pain felt when the market turns in the opposite direction. However, while some people are into crypto purely for speculation and investment opportunities, increasing numbers of people hold these currencies for ’real-world’ usage.

The pros of crypto include anonymity, possible lower fee costs, the ability to pay from anywhere and the availability to everyone. On the downside, there can be higher transaction fees and price volatility, and transactions cannot be reversed. In addition, crypto is not regulated, which can be regarded as a pro or a con depending on how you look at it, and there are always risks of losses.

Many companies and stores now accept cryptocurrencies online and in person. Some of the big-name corporations that accept these currencies either via an app or through a service provider include Microsoft, PayPal, Starbucks, Newegg, AMC Theaters, AT&T and Overstock. There are also many entertainment providers like Twitch, Gamesplanet, Candycrush, Resorts World Las Vegas and Nintendo who have started accepting cryptocurrencies.

During the explosion of gaming during the pandemic, game providers realised that accepting crypto would be a huge benefit. From this, we saw Microsoft, GameStop and even the Sony PlayStation Store begin accepting crypto. This also extended to online casinos which saw a huge boom throughout our time inside. This has meant that while real money casinos haven’t gone anywhere, players always have choice to pay with fiat or cryptocurrencies nowadays. It really depends on what people need from their transactions, as there are pros and cons to consider.

Let’s start by explaining the benefits of paying with cryptocurrencies.

  • Anonymity

Cryptocurrency is decentralized, and this means that user information is not required, making it anonymous and even pseudonymous. Users can conduct their financial affairs without oversight or scrutiny from authorities, who might have many reasons for wanting to pry. The user might have many reasons for not wanting to reveal their identity or to operate under a persona. However, users should be aware that a wallet address can be used to disclose personal details if they ever allow that information to become accessible.

  • Peer-to-Peer

Cryptocurrencies do not need to pass through banks or other third-party platforms for you to pay someone. In this respect, they are much more like cash. People buying and selling using cryptocurrencies can send and receive money from anyone and should not need to rely on another service provider.

  • Fees

By its very nature and peer-to-peer properties, cryptocurrencies are not subject to the same transaction fees many financial service providers levy on individuals and businesses for facilitating payments. Therefore, using crypto should cost less for all parties involved in the transaction. However, as crypto usage becomes more widespread, more third-party platforms are entering the space and taking a cut for their services.

  • No Borders

Cryptocurrencies are not restricted by national boundaries, and payments can be made and received from anywhere on the internet.

  • Universal access and usage

While vast swathes of the world’s population have quick access to financial services like banks and loans, many do not. It is estimated that 4.5% of US households are ’unbanked’, meaning that almost 6 million households do not have anyone holding a checking, savings or credit union account. The World Bank reports that Morocco, Vietnam, Egypt, the Philippines and Mexico have over 60% of their population without banking services. However, internet penetration in these countries is not considerably lower than in similar economies, and most people access online services through mobile phones. Cryptocurrencies allow the ’unbanked’ to make and receive payments, access financial services and create and acquire loans.

While the upsides to using cryptocurrencies for many people are considerable, they are not without their downsides, and it is worth considering those before switching all your transactions to crypto.

  • Fees

Earlier, we explained how cryptocurrency could help users avoid traditional transaction fees; however, fees are still payable to the crypto networks. Historically, these have been minor charges, but this is not the case anymore. The developers and communities are currently working to resolve issues around fees, as one Bitcoin transaction fee was recently more than $51. It is now usually around $1, but that is still considerably more than it used to be.

  • Price Fluctuations

Much of the joy of crypto is the volatility, but that does mean your wallet’s value can change dramatically in a very short period. Value can change between making the purchase and the network approving the transaction and purchasers can find they have sent little or too much money.

  • Regulation

These currencies are not guaranteed, backed, or regulated, meaning that if something goes wrong, the purchaser has no recourse for getting their money back. Even if a user is scammed or a site or store goes out of business, there are no refunds to be claimed.

  • Reversals

A crypto transaction is not reversible once the exchange has happened and cannot be undone. If there is a mistake or error, the purchaser is completely reliant on the goodwill of the vendor to send money back in another transaction, but there is no compulsion to do this.

  • Risk

While your cryptocurrency will not just fall out of your wallet, it is still possible to lose it. The owner of the currency is entirely responsible for the private keys that allow access to the money. If the keys are lost, they are unrecoverable. In addition, cryptocurrencies can lose value when prices fall.

Now, you should be fully clued up on the possibilities of cryptocurrencies and what can go wrong. If you are ready to splash some of your crypto cash in the real world, you might want to look at a service like BitPay, which features over 250 merchants who accept Bitcoin.