Everywhere you go, the conversation is likely to touch on cryptocurrencies. Initially, crypto coins were thought to be for the tech-savvy persons in the Silicon Valley and high-risk takers, but the narrative has changed, and they are now everybody’s affair. So, if you are yet to start using crypto coins and blockchain, it is time to give them a try.
As a new entrant into the world of cryptocurrencies, you might be wondering, “What can I do with the cryptocurrencies?” Here are the unique ways that you should consider using cryptocurrencies for today.
The idea of crypto loans came to the fore at the height of the COVID-19 pandemic. With banks declining loan applications from fear of high default rates because of the deteriorating global economy, people discovered that there was another way to get a loan; borrowing against one’s crypto coins.
To take a crypto loan, you need to commit your coins as collateral. Then, money is sent to your preferred destination, and you are required to repay within the agreed period. The process uses smart contracts and will self-execute when all the conditions are met. Here are the main advantages of using crypto loans instead of traditional bank loans:
- The loans are processed fast
- No background checks are done
- You can take the loan irrespective of your geographical location
Sending Money to Friends and Family
This was the original idea of Satoshi Nakamoto when he developed Bitcoin. So, instead of using bank transfers or credit cards to send money, why not consider cryptocurrencies? To use cryptocurrencies, all that is required is the sender and the recipient to be on the same crypto network, such as Ethereum or Bitcoin. You will also need to have enough coins and a crypto wallet. The main advantages of using crypto coins to send value include:
- The process is completed pretty fast.
- The cost of sending money is less compared to using the traditional banking system.
- There are no third parties involved when sending money.
- The transaction is private.
Stake Your Coins
For most people, cryptocurrencies are bought and used as a store of value. It is a good idea, but we are going to tell you about a better one. Instead of holding the coins that you have bought, simply stake them to generate passive income. If the coins are from a network that uses proof of stake (PoS) consensus protocol, such as Cardano (ADA) and Ethereum (ETH), you can stake them to help secure the network. In return, you get some reward in the form of tokens or part of the transaction fees made on the network. Remember that you are not selling the coins. Therefore, you will enjoy any growth of value if the price shoots up.
Trading cryptocurrencies is like forex trading in the exchanges. It requires you to identify a good broker that supports cryptocurrencies to start trading. Remember that just like stocks or forex; you will require a good strategy, such as technical or fundamental trading. Again, you will need to have a good risk management system, such as using stop-loss orders and risk-to-profit ratios, to avoid the risk of losing coins in volatile markets.
As you can see, cryptocurrencies are becoming very common, and it is a good idea to start using them. If you opt to use them for investment or trading, they can come in handy in diversifying your portfolio. Remember to select the right cryptocurrencies, preferably the ones with high chances of growing in value. For example, Ethereum might be an excellent choice because it is shifting to proof of stake (PoS) protocol, and its value is likely to skyrocket. Visit hi.com to learn more about cryptos and their uses.