While many of us have seen news headlines about bitcoin, very few of us have a good grasp of what cryptocurrencies actually are. Despite not having a clearly defined purpose, cryptocurrencies have gone from non existent to a $100 billion asset class in less than 10 years. It is probably too early to decide if cryptocurrencies are the new gold or the next asset bubble. Either way, there is clearly a lot of interest in learning more about cryptocurrencies and what roles they will fill in the future.
Chain CEO Adam Ludwin provides a great explanation of cryptocurrencies on a recent blog post. He goes into great detail outlining the features and limitations of cryptocurrencies and decentralized applications in a way that the average reader can understand. While Adam does suggest that current cryptocurrency valuations are probably too high, he argues that real value is the ability to make uncensorable transactions.
My top 3 current use cases for cryptocurrencies are included below (with examples). If you can think of any others please include them in the comments below.
- Transactions across national borders (Remittance payments)
- Transactions in countries during periods of hyperinflation (Argentina 1990s)
- Prohibited transactions in a failing socialist economy (Venezuela 2017)