Initially, cryptocurrencies were designed for online payments and transactions. Since the invention of Bitcoin, more than 10 000 digital currencies have been developed. Most of these offer practical uses beyond the store of value and payments of online transactions.
The utility is one of the most important factors for crypto and blockchains. In the future, cryptos with utility will likely benefit from mainstream adoption, while those that are hard to use or have no use whatsoever will gradually vanish. As a crypto investor, you should be looking to invest in cryp[tos with practical uses. These cryptos are not just mere stores of value; they provide practical solutions to developers, businesses, and digital artists.
Here are the top digital currencies with practical uses
Ethereum is the second biggest crypto and the most prominent digital currency with practical utility. Unlike Bitcoin, the blockchain network provides a platform to develop decentralized apps. This means that developers do not require platforms like Apple and Google Play centralized entities.
Perhaps, the best use case for Ethereum is its smart contract functionality. For beginners, smart contracts are self-execution codes that self-execute when certain conditions are met. For example, Decentralized Finance (DeFi) applications can use smart-contract to offer loans.
Also, the blockchain network supports the creation of NFTs. These are unique digital and indivisible tokens particularly prominent in gaming and arts. There can only be one of a kind. In fact, NFTs are the next big thing considering many NFT’s art pieces fetch upwards of a million dollars.
Another use case is the development of Decentralized autonomous organizations which operate devoid of central entities. Ethereum has also played a significant role in the growth of the crypto space by enablings startup fundraising through Initial Coin Offering (ICO). The launch of token sales led to the ICO boom.
Ethereum has ERC standards to ensure all tokens are compatible with other dApps and smart contracts. Its numerous use cases span businesses and corporations. This explains its growth from $200 to $4000 in a year.
Polkadot has a unique use case that could potentially revolutionize the cryptocurrency industry. The cryptocurrency has cross-platform interoperability (CPI) functionality which allows transferring data, assets, and tokens across various blockchain platforms. This means you can leverage features of one blockchain into another. For instance, you can use Solana or Ethereum smart contracts to set payments in another blockchain like Cardano or Bitcoin.
The different chains on the Polkadot blockchain are called parachain, and they have numerous super cases, including IoT chains, finance chains, identity chains, and oracle chains. Therefore, the primary use case for Cardano is the interoperability feature. Polkadot has been performing extremely well recently and is according to CryptoPredictions’ Polkadot forecasts predicted to increase by roughly 15% before the end of the year.
Cardana is a bitcoin known for its scalability, interoperability, and sustainability. It is one of the leading platforms for minting and transferring NFTs. For instance, SpaceBudZ is one of the top NFT platforms in the Cardano blockchain, with over 10 000 unique NFTs, and it recently sold the first one million dollars NFT.
The recent Alonzo upgrade will also enable users to execute smart contracts and develop dApps. This means that Cardano can now offer lucrative Decentralized finance services eliminating third-party intermediaries such as banks. This means that Cardano now matches the Ethereum utility and capabilities. Cardano recently partnered with Chain Link for Oracle solutions to enhance its Defi services.
But Cardano users’ cases are not limited to fintech. It has spread its tentacles to education and governance. It partners with the Ethiopian government to launch a blockchain-based system to verify grades and track and monitor students’ performance.
Besides its great practical uses, the cryptocurrency uses an environmentally friendly proof of stake mining method. It also solves the numerous inherent problems associated with cryptocurrencies, such as high fees and slow transactions.
Stellar has clearly defined its use case to enhance cross-border transactions’ efficiency. It enables users to send huge sums of money and convert currencies. Remember, some cross-border transactions can take hours or even days. Stellar Lumens search for a straight currency pair swap, and if there is none, the currency goes through several transitions. The process takes seconds, ensuring you receive money almost in real-time, even when there is no straight currency swap.
The cryptocurrency has partnered with IBM and Moneygram to enable institutions to send huge sums of money internationally. The transactions are not only fast but incredibly cheaper. Stellar has cut a niche in international transfers and could emerge as the leading crypto for cross-border transactions.
Solana use cases are similar to Ethereum but relatively faster and scalable. In fact, at the core of its developments was the need to offer solutions to slow transactions and high gas fees associated with Ethereum. It uses a proof of history (POH) mechanism to mint new coins, which is faster than the Proof of Work (PoW) and Proof of Stake (PoS). This makes Solana a preferred platform for developing dApps. While most dApps run on Ethereum, the developers are shifting to Solana due to cheap cost and high speed.
Most Solana’s use cases projects are in NFTs, Defi, blockchain digital games, DExs, lending protocol, staking plants, and storage wallets solutions. For instance, Trust Wallet is one of the projects on the Solana network. Project Serum, developed in the Solana network by Almeida research, is a popular and transparent Decentralized exchange and only one running on-chain Central Limit Order Book (CLOB).
Without a doubt, the future of crypto is bright, and it is the next big thing. However, there is a plethora of crypto, and more are released every day. It is likely some will not survive in the long run. But cryptocurrencies with practical utility will be here to stay. If you want to understand or invest in digital currencies user cases, the list above will get you started.