By Stephen Abiola
Digital coins, often referred to as cryptocurrencies, have been making waves in the financial world for quite some time. While most people are aware of their use as a form of digital currency, the possibilities go far beyond simple transactions.
In this article, we’ll highlight 10 incredible things you probably didn’t know you could do with your digital coins.
1. Earning Interest
Your digital coins don’t have to remain idle in your wallet. Many cryptocurrencies, like Tezos, Cardano, and Polkadot, offer staking opportunities that enable you to earn interest by locking up your coins to support the network’s operations.
Additionally, various lending platforms allow you to lend your digital coins to other users and earn interest in return. BlockFi, Celsius Network, and Nexo are examples of platforms that provide this service. Earning interest on your crypto is a way to generate passive income while holding onto your assets.
2. Online Shopping
Cryptocurrencies provide an alternative payment method for online shopping. Several e-commerce platforms, both large and small, have integrated cryptocurrency payments which adds a layer of privacy and security for consumers.
Platforms like Shopify and Overstock.com have embraced cryptocurrency payments, enabling you to purchase a wide range of products using digital coins. This option not only simplifies international transactions but also ensures maximum security for your online purchases.
3. Invest in Traditional Assets
With issues like high minimum investments and geographic limitations, beginners tend to have challenges accessing the traditional financial world. Thankfully, Digital coins have offered a solution to this. Various platforms now allow you to invest in traditional assets like stocks, bonds, and real estate by tokenizing them.
Tokenization involves representing ownership of these assets as digital tokens on a blockchain. This enables fractional ownership, meaning you can invest as much or as little as you like. It also opens up opportunities for diversification and access to assets that were previously out of reach.
RealT, for example, is a platform that tokenizes real estate, allowing investors to buy a fraction of a property using cryptocurrencies like Bitcoin or Ethereum. This democratizes real estate investment and makes it more accessible.
4. Gaming and Virtual Assets
Video game fans can also enjoy the many benefits of digital coins. Blockchain-based games like CryptoKitties, Decentraland, and Axie Infinity allow players to buy, sell, and trade in-game items and characters using digital coins. There are also online casinos that allow players to try out slots and table games using crypto. If you’re a poker enthusiast, you’re not left out either. Read Tight Poker’s guide to crypto poker to understand how the whole process works. The intersection of cryptocurrencies and gaming has certainly offered an avenue for gamers to monetize their skills and assets.
5. Travel the World
As with other leading businesses, Digital Coins has also made its entry into the travel industry. Some forward-thinking travel agencies and airlines now accept cryptocurrencies as a form of payment for flights, hotels, and other travel-related services. This presents an excellent opportunity for cryptocurrency enthusiasts to put their holdings to practical use.
For instance, CheapAir was also one of the first to accept Bitcoin for flight bookings. While not all travel companies have embraced crypto, the trend is growing, providing you with more options to use your digital coins for real-world experiences.
6. Charitable Donations
Cryptocurrencies have found a home in the world of philanthropy. Many non-profit organizations and charities have started accepting digital coins as donations. The advantages are many: transparency, lower transaction costs, and quicker cross-border donations.
Blockchain technology allows donors to track their contributions and see exactly how their funds are being used. Organizations like the Red Cross and UNICEF have launched crypto donation campaigns. This not only simplifies the donation process but also ensures that a larger portion of your contribution reaches those in need.
7. Tokenized Collectibles
Artwork, collectibles, and even real-world assets like rare watches and cars can be tokenized and represented on a blockchain. This process converts physical items into digital assets, making them easier to buy, sell, and trade using digital coins.
Platforms like Rarible and OpenSea allow artists to tokenize their work as non-fungible tokens (NFTs), while others can buy these tokens using cryptocurrencies. Tokenized collectibles provide a new level of liquidity to the world of art and collectibles, making it easier for both creators and collectors to engage in the market.
8. Decentralized Finance (DeFi)
DeFi is one of the most exciting developments in the cryptocurrency space. It’s a system of financial services built on blockchain technology that aims to recreate traditional financial services, like lending, borrowing, and trading, without relying on traditional banks.
In DeFi, you can use your digital coins as collateral to take out loans or provide liquidity for decentralized exchanges. Popular DeFi platforms include Compound, Aave, and Uniswap. DeFi opens up financial services to people who are unbanked or underbanked, providing greater accessibility and often higher returns compared to traditional finance.
9. Smart Contracts
Smart contracts are self-initiating agreements directly written into code. These contracts are powered by blockchain technology and can be executed automatically when specific conditions are met. Digital coins, often referred to as “gas,” are used to pay for the computational power required to run these contracts.
Ethereum is the most well-known platform for creating and executing smart contracts. These contracts can be used for a wide range of purposes, from insurance payouts to legal agreements. Smart contracts provide transparency, security, and automation, reducing the need for intermediaries and potentially speeding up processes in various industries.
10. Peer-to-Peer Transactions
One of the principles of cryptocurrencies is enabling peer-to-peer transactions without the need for intermediaries. This opens up a world of possibilities, from sending money to a friend or family member across borders to paying for services without the hassle of traditional banking systems.
Peer-to-peer (P2P) platforms, such as LocalBitcoins and Paxful, facilitate direct transactions between users. Additionally, you can use cryptocurrencies for cross-border remittances, which are often quicker and more cost effective than traditional methods.