Categories of Cryptocurrencies and their uses.

Stablecoins

What is a stablecoin? Stablecoin is a cryptocurrency that is designed to minimize volatility by pegging to a more stable asset. Fiat currency digital asset is the most popular use case for stablecoins. It typically tracks popular national currencies such as the US Dollar, Euro, and the British Pound. Benefit of this includes being able to take advantage of blockchain technology and peer-to-peer value transfer while not being exposed to high volatility such as bitcoin, ethereum, or other cryptocurrencies. Stablecoins are relatively new kind of technology and each of them comes with different implementations, liquidity, risks, and acceptance.

Smart Contract Cryptos

“A smart contract is an agreement between two people in the form of computer code. They run on the blockchain, so they are stored on a public database and cannot be changed.

Decentralized Finance(DeFi)

“DeFi is a collective term for financial products and services that are accessible to anyone who can use Ethereum — anyone with an internet connection. With DeFi, the markets are always open and there are no centralized authorities who can block payments or deny you access to anything. Services that were previously slow and at risk of human error are automatic and safer now that they’re handled by code that anyone can inspect and scrutinize.

DeFi vs traditional finance

“One of the best ways to see the potential of DeFi is to understand the problems that exist today.

  • Some people aren’t granted access to set up a bank account or use financial services.
  • Lack of access to financial services can prevent people from being employable.
  • Financial services can block you from getting paid.
  • A hidden charge of financial services is your personal data.
  • Governments and centralized institutions can close down markets at will.
  • Trading hours often limited to business hours of specific time zone.
  • Money transfers can take days due to internal human processes.
  • There’s a premium to financial services because intermediary institutions need their cut.”

Gaming

“Traditional games are centralized. In other words, the characters, skins, weapons and all coding that is done for a game cannot be used for other games. Whereas, crypto gaming allows everyone associated with the game to own a part of the game. When implied to games, characters and other resources might work with other games. Users will be able to transfer their rewards and purchases that are made in-game to other games as well.

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david bayode

david bayode

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I’m a Nigerian with a deep passion for learning about cryptocurrencies, nfts and all the good things that come with it.