Over a decade ago, the birth of Bitcoin sparked a revolution in the digital world – and just last year, the number of active cryptocurrencies jumped from roughly 1,600 to over 3,000 worldwide.
As Visual Capitalist’s Ashley Viens details below, cryptocurrencies have now evolved past simple digital currencies, offering solutions to meet the complex needs of modern financial markets.
Today’s graphic from Abra visualizes the complex, ever-evolving cryptocurrency ecosystem and its real-world applications.
Characteristics of Cryptocurrencies
Why are cryptocurrencies important for the future of digital finance?
Drastically reduces fees and processing times due to a lack of cross-border restrictions
Prevents governments or major institutions from blocking financial activities at whim
Greater financial control
Individuals can have total control of their funds
Prevents fraudulent alterations from third parties
Lower transaction fees thanks to fewer third parties
Reduces or eliminates traditional barriers to capital markets
Much like the internet has forever altered how we live and work, cryptocurrencies have the potential to change how people participate in global financial markets.
Categorizing the New Crypto Economy
Today’s cryptocurrencies go beyond replacing cash. This new token-based economy is evolving─with unique solutions emerging in finance, security, identification, social engagement, and ownership.
Cryptocurrencies are generally categorized by their primary application within the ecosystem:
Digital cash can be used for both ecommerce and brick-and-mortar retailers
Store of value
New form of scarce native currency and a means of settlement
Borderless money that enables easy conversion between currencies
Crypto version of fiat which is tied to the value of resources like gold or the U.S. dollar
Private digital transactions, with some offering anonymity
Digital handling, storage, and monetization of data
Crypto-enabled networks, products, and services that exchange between assets
Digital assets such as collectibles, commodities, and tokenized securities
Cryptocurrencies are adding both value and utility to the digital economy, and to the global financial market as a whole.
Applications of Cryptocurrencies
Because cryptocurrencies are programmable, customizable computer code, developers can design and adapt them for many use cases within the digital economy.
How are these various cryptocurrencies being used in everyday applications?
SPEDN auto-converts crypto to fiat for merchants, reducing exchange rate risk while offering convenient customer payment options.
Slice offers real estate investing to anyone for as low as $10,000 through fractional investment.
CyClean plans to launch a blockchain-enabled electric vehicle (EV) fleet that mines crypto as users travel—reducing emissions and rewarding users for doing so.
Digital construction platform Builderium connects contractors to clients around the world through blockchain, opening up a global marketplace of potential deals.
These are just a few of the ways cryptocurrencies are breaking down barriers for people and companies worldwide—allowing them to grow personal wealth and enter the global market.
The Growth of the Crypto Economy
Worldwide, the numbers show that blockchain-based technology and cryptocurrency use is growing. Blockchain wallet users rose from nearly 9 million in 2016 to over 42 million in 2019.
Developers produced a mere 100 decentralized apps (DApps) in 2015─with that number skyrocketing to over 3,100 by 2019.
Overall, cryptocurrencies are helping to create an innovative and accessible financial system around the world.
Cryptocurrency deserves an opportunity to find a sustainable future in our economy.
– Adena Friedman, President & CEO of NASDAQ
While the future of the new cryptocurrency economy is still taking shape, one thing is certain─cryptos are forever altering the way we view and measure the value of money.