6 Surprising Ways Consumers Are Using Cryptocurrencies
The hype surrounding bitcoin may have faded, but cryptocurrencies are still popular among digital cash enthusiasts. In fact, you could trade your money in for not only bitcoin, but also litecoin, ethereum, ripple and monero, just to name a few cryptocurrencies. And while you hear a lot in the news about investing in cryptocurrencies, not everyone uses the digital currency as an investment. In fact, there are some unexpected ways that consumers are using these digital assets.
Here's a look at six ways people are leveraging crytocurrencies – beyond building their wealth.
- Gambling. "One of the most unique ways I've seen people using cryptocurrency is on decentralized betting. Cryptocup is a betting pool that uses the ethereum blockchain to collect, manage and distribute the earnings all without a central bank or point of failure," says Chris Castiglione, an adjunct professor at Columbia University in New York City. Castiglione teaches a course about blockchain – a revolutionary technology that allows financial transactions or anything of value to be recorded – and a bitcoin and ethereum course online.
Castiglione says that in the history of the internet, there are often innovations in the seedier sides of life, such as gambling and adult entertainment. "Cryptocup reminds me of that, being that it's one of the first betting pools on the blockchain that seems to be gathering some attention," he says.
- Charitable donations. Patrick Gray, founder and CEO of HashChain Technology, a global blockchain technology company based out of Vancouver, Canada, says that many people are donating their cryptocurrencies to charities around the world.
"For example, Fidelity Charitable revealed earlier this year that it had received $69 million in cryptocurrency donations in 2017 alone. More and more nonprofits and charitable organizations have started accepting digital currency as a way to tap into investors who want to do more good with their money," Gray says.
And that's just the start. Earlier this month, ripple, a startup cryptocurrency, donated $29 million in ripple to thousands of teachers with requests at the crowdfunding website, DonorsChoose.org, fulfilling 35,647 requests from 28,210 teachers at 16,561 public schools across the country.
[Read: What's the Best Bitcoin Wallet for 2018?]
- To conceal money in divorce. Briggs Stahl, a partner with RGL Forensics, a financial investigation firm in Tampa Bay, Florida, says that he has run into this a couple times, where a spouse tried to hide money in a divorce by transforming cash into bitcoin.
"It's the latest technology advance in hiding money," Stahl says. "We used to just see gift card purchases, credit card prepayments or just removal of cash that could not be traced. Now we are seeing this."
Given that cryptocurrency can go down in value, you may wonder if a person is taking a big chance by hiding assets in this way. "Yes, it is a big risk," Stahl says.
- To protect themselves against hyperinflation. "The most unusual way I am seeing cryptocurrency used is as a fail-safe against hyperinflation. In countries like Zimbabwe and Venezuela, everyday citizens are buying crypto simply to protect themselves from poverty if their fiat currency takes a nosedive," says Dean Anastos, a New York City-based founder and CEO of Blockchain Developers. The company specializes in solutions for token creation and smart contracts on the ethereum blockchain, a software platform and programming language that helps developers build and publish applications.
You could call it investing, Anastos concedes, but he describes it as "surviving." According to Anastos, investing in a society with a stable economy is an optional act, whereas seeking opportunities to safely keep your money in a country like Venezuela is a necessity. "Their central banks destroyed their economy with hyperinflation and many of its citizens survived the crash by seeking refuge in crypto."
- Bartering. Shidan Gouran, president and chief operating officer at Global Blockchain Technologies Corporation in Toronto says that Bunz.com, a Toronto-based online bartering community, has been particularly successful at using cryptocurrencies for trading.
"With more than 200,000 users, the community operates on a strict no cash rule, permitting only trades of goods or services. Part of the community's strength is a shared diligence of users for respect of the rules and standards, ultimately making it a very safe and unproblematic place in which to barter," Gouran says.
He adds that several weeks ago the website started its own proprietary cryptocurrency called BTZ (pronounced "bits"), which rewards users for their participation. At its launch, BTZ had more than 100 merchants who accept BTZ for payment.
- As a new medium for investing excess financial aid money. The Student Loan Report, a website for student loan information, did a survey from March 16 to March 20 and asked 1,000 current college students about what they did with extra financial aid revenue. According to the survey's findings, 21 percent of students reported putting their money into cryptocurrencies such as bitcoin and others.
While it's hard to say if college students will continue putting extra student loan money into cryptocurrency transactions, it's a safe bet that college students will continue to embrace forms of digital money. For instance, sometime during the next academic year, Carnegie Mellon University in Pittsburgh plans to launch its own cryptocurrency, CMU Coin, which they'll offer to students and faculty.
The primary reason that the school is offering its own virtual currency is to give the university a chance to research digital money, according to Param Vir Singh, associate professor of business technologies at Carnegie Mellon University's Tepper School of Business. "We expect that it would be used for regular purchases and may also lead to emergence of new markets on campus," Vir Singh says.
Interesting article, subscribed, I hope for reciprocity!