Cryptocurrencies have become popular against all odds, the rise of this nascent industry hasn’t been a walk in the park. Now over a decade old, cryptocurrencies are being adopted across various sectors, with more merchants accepting digital assets as a form of payment. Nonetheless, there are still some skeptics who believe cryptocurrencies are a fad. Could they be right? Fundamentals and adoption rates are proving otherwise.
Today, the total cryptocurrency market capitalization stands at $2.2 trillion, Bitcoin leading the pack followed by other crypto assets, including Ethereum and meme coins such as Dogecoin. While the hype on speculative investment has been a significant factor in driving adoption, real-life cryptocurrency use cases are the ones setting the stage for long term integration with existing industries.
As more people join the crypto industry, it is gradually becoming evident that this emerging ecosystem will likely play a significant role in the future of financial markets. Even better, there are more industries such as gambling, hospitality, and the retail market where stakeholders are already benefiting a lot from cryptocurrencies.
The following section of this article features some of the real-life cryptocurrency use cases in the industries mentioned above to paint a detailed picture of the ongoing paradigm shift.
For a long time, banks have dominated the financial markets arena, acting as third-party intermediaries by offering users financial services at a fee. The crypto ecosystem now challenges this position with the emergence of niche innovations such as Decentralized Finance (DeFi).
Unlike centralized finance, DeFi introduces an ecosystem where anyone can access financial services such as lending and borrowing without going through an intermediary. Instead, one can leverage decentralized lending protocols like Compound and Aave, where the lending rates are more favourable than the traditional rates offered on bank saving accounts. The former could go as high as 7%, while traditional savings accounts average at 0.6% in the U.S.
The online gambling industry is perhaps one of the most compatible niches with cryptocurrencies. As it stands, close to 40% of crypto transactions are associated with online games, and the trend seems to be growing faster following the emergence of Non-fungible tokens (NFTs).
There are also some online casinos such as FortuneJack, 7bit and CloudBet that accept a wide range of crypto assets. These upcoming Bitcoin-focused gambling ecosystems expose players to the advantages of paying with crypto and build gaming communities where users understand the value of decentralization.
Food & Hospitality
The hospitality industry is also adopting cryptocurrencies at a significant rate. One of the primary players in this industry is crypto-focused booking platform, Travala, which gives users an option to book hotels through crypto payments in Bitcoin or other accepted crypto assets.
Besides booking platforms, there are some emerging direct-to-consumer food and beverage crypto-oriented marketplaces. One such ecosystem is the Bistroo community-powered platform, which links merchants directly with prospective consumers.
The Bistroo decentralized food and beverage marketplace allows merchants to list their services at a commission fee of 5%; this is significantly lower than the average 13% charged by existing third review platforms. Both merchants and consumers also can monetize their data in return for Bistroo’s native token, BIST.
Ideally, the Bistroo decentralized model is designed to eliminate third-party online review platforms in the hospitality industry which charge exorbitant fees while offering little to no compensation for users’ data. Notably, Bistroo features a 2% cashback incentive program for merchants and consumers who use BIST to make internal payments.
The retail market is another area where cryptocurrencies are being massively adopted, with payment giants such as Mastercard announcing an intention to facilitate direct crypto payments earlier in the year. Twitter also recently integrated a tipping feature where users can tip their favourite accounts through Bitcoin.
This adoption has trickled down to developing economies, with countries like Nigeria and Kenya pivoting to Bitcoin for international remittances. Meanwhile, some jurisdictions in South America are in the process of adopting Bitcoin as legal tender, following El Salvador’s lead as the first country to recognize Bitcoin as an accepted form of money.
Going by the adoption trends, it seems that crypto skeptics will likely have to deal with the changing tides or be left behind. This ongoing transition to a digital ecosystem will not only shape the future of existing industries but introduce new ones based on decentralized ecosystems. That said, stakeholders are still tasked with fully supporting this nascent market to overcome reputational barriers, amongst other challenges.