NFT and cryptocurrency are two emerging digital assets currently disrupting many industries.
With the first showing signs of revolutionizing ownership and the other threatening to replace traditional currencies, we can’t help but wonder if NFTs will ever be as versatile as crypto.
Presenting a holistic response to this question, we examine both sides by highlighting some core applications of both crypto and NFT so far. To predict which will have the most applications in the future, we pit them against each other based on some core criteria for versatility, and our discovery was far from what we imagined.
Read on to find out.
How Versatile Have Cryptocurrencies Been So Far?
Cryptocurrencies have been closely related to finance since they became mainstream. There have been multiple hints that they might replace fiat currencies.
However, their evolution has made notable ones like bitcoin usable in many online niches, from gambling to cross-border remittances and even everyday e-commerce payments. Here are some use cases of crypto so far.
Finance: Transactions, Purchases and Payments
Crypto’s primary use case is finance. It is a currency, after all.
Bitcoin, the first crypto, was created in 2009 to provide a legitimate peer-to-peer electronic cash system that wouldn’t rely on banks due to prevent the reoccurrence of the great financial crisis of 2008.
Its peer-to-peer nature has made it faster and cheaper than existing financial systems. As such, it has been widely used for remittances and non-commercial money transfers.
Following the development of decentralized finance (DeFi) platforms, crypto has also leveraged smart contracts for lending purposes. In addition, these DeFi exchanges have accounted for 60% of all crypto transactions through retail activities, especially e-commerce.
So far, crypto has proven to be a versatile asset for modern-day finance and can now be used to purchase many types of goods and services.
Governance
Thus far, crypto has been applied in overseeing and controlling the direction of organizations. We may see it in action in government in the coming years.
Many organizations can now create and sell tokens to their members to set up a digital organization. The Decentralized Autonomous Organization (DAO) venture fund, launched via the 2016 initial coin offering (ICO), is a classic example of this application.
Crypto facilitated a flat organizational structure in this venture, as token holders became stakeholders and voted on projects via the Ethereum blockchain’s smart contracts.
These applications imply that crypto could be used in future elections. Members or citizens would be issued unique voting tokens, and publicly accessible voting systems would tally votes.
Utilities
Some cryptocurrencies have specific real-world uses. They are not considered financial instruments to be traded. Instead, individuals purchase them in exchange for other cryptocurrencies like Bitcoin and Ethereum to access certain products or services on a platform.
For instance, Ethereum’s gas token is used to pay gas fees on the Ethereum blockchain network. Ethereum also possesses the Ether cryptocurrency, which helps those who stake their tokens earn more ether.
Gaming
Cryptocurrency plays a major role in the gaming industry’s evolution. It infuses the reality of real-world economics into gaming.
This application is an extension of crypto’s application as utilities because these games allow players to earn in-game crypto tokens for completing gaming tasks or outperforming other gamers. Players can then trade their in-game tokens for crypto or fiat currencies.
The development of P2E (play-to-earn) gaming models facilitates this application, as many individuals are now getting paid for being full-time gamers.
Likewise, crypto coins can be used to stake on casino games online, much the same way as fiat currencies can. This development brings gambling to places where it has previously been restricted, as crypto regulations are different from fiat.
Investments
As an extension of its primary use case, crypto also serves as an investment.
In recent times, traditional investment instruments like bonds and stocks have been replicated in the cryptocurrency industries as security tokens — sister forms of utility tokens, if you wish. Security tokens signify ownership stakes or interests in a company. We saw many of these during the initial coin offering boom of 2017.
The crux of their application as investment forms lies in the possibilities of increasing value over time. As a common example, Bitcoin – even though it wasn’t intended to be a security token— has increased in value compared to when it was first launched. As such, investors have acquired and preserved it as an investment form.
Many proponents also believe crypto can hedge against inflation,
