If you’re new to the cryptocurrency community, you may have some questions about crypto coins. First and foremost among them is likely “What are crypto coins used for?” After all, it’s not like most stores are accepting bitcoin to pay for your groceries!
The truth is that while there are some places where you can use cryptocurrencies to purchase goods and services, especially online, there are several other common uses for crypto coins and tokens.
Many people see cryptocurrency as an asset to be invested in. They mine or purchase coins and then store them, waiting for their value to increase. This is one reason why you see a lot of parallels being drawn between bitcoin and gold. Both are mined, both are used as compact storage of a large amount of value, and neither is easy to take to the mall to buy a new pair of shoes. And just like gold, you can sell your bitcoin or other cryptocurrency for the fiat currency of your country, which can then be used to make purchases or pay bills.
A big difference between cryptocurrency and gold is that it’s easier to transfer cryptocurrency from one person to another. If you had a bar of gold, it would be easy to hand it to your neighbor. It would be harder to send it to your cousin who lives on the other side of the Atlantic and needs some help paying the bills. Part of the appeal of cryptocurrencies is the ease of transferring values large and small anywhere in the globe.
The other common use of crypto coins or tokens is of a unit of value within a closed ecosystem. This style of token is not designed to be used as a currency out in the “real world”, but instead is used to fuel transactions within a video game, an advertising network, or another virtual environment. Some blockchain projects, for instance, use tokens to incentivize content creators, and those tokens can then be turned in for items with value, such as gift cards. This is one reason why they’re called tokens – their use can feel very similar to the tokens or tickets that you would win in an arcade. Outside of the arcade they have no value, though you can trade them in for things that do have value (good luck using a giant teddy bear to buy groceries, though).
We hope this short article has helped you to better understand the use of cryptocurrency.
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