Cryptocurrency is becoming our everyday life—more and more people own it. According to UN data for 2022, Ukraine and Russia took first place in the list of countries actively using “virtual money” because using crypto is easy and convenient. You canpay subscriptions in crypto or do most payments you need to do quickly and witout any risks.
In this article we will tell you what cryptocurrency and blockchain are, why the use of digital assets is relevant not only for business, but also for everyday life, and how cryptopayments help bypass sanctions restrictions.
What is cryptocurrency and blockchain technology
Cryptocurrency is digital money that is stored on a decentralized network. Data on transactions carried out in cryptocurrency are reflected in a public database - blockchain.
Blockchain technology is a set of interconnected blocks of information about amounts, dates, and participants in cryptocurrency transactions. They cannot be deleted or changed. Guaranteed security, as well as the anonymity of participants and low transaction processing fees are just some of the reasons for the popularity of digital money.
There are the following types of cryptocurrency:
- coins (Bitcoin) - the first cryptocurrency;
- altcoins - all other currencies (Litecoin, Ethereum, etc.) that use their own blockchains;
- stablecoins are cryptocurrencies whose value is tied to tangible assets (for example, Tether is pegged to the dollar);
- tokens are a form of representation of an asset/value created on top of an existing blockchain;
- NFTs are tokens designed to indicate ownership of unique assets;
- DeFi is a decentralized blockchain-based service.
Applications of cryptocurrency
The use of cryptocurrency is relevant for various areas: financial transactions, household transactions, and bypassing restrictions. With crypto payments onchainpay you can easily buy, exchange or withdraw your coins.
Financial operations
Cryptocurrencies can be used to make a profit through the following types of transactions:
- Investments. Popular cryptocurrencies (including Bitcoin) have a limited issue. This means that with cryptocurrency mining, the value of assets will gradually increase, since their quantity is limited. Buying Bitcoin or other currency with fiat money for subsequent sale after the price increases is a source of income for investors.
- Smart contracts. It is a contract between two parties, written in the form of automatically executing computer code. The program monitors the fulfillment of obligations by participants under the contract and reacts in accordance with this: transfers funds, opens or closes access to assets, etc. The principles of a smart contract include: traceability, immutability, irreversibility.
- Deposits. Cryptocurrency deposits have a similar principle of operation to regular ones. The owner places funds on the landing platform or in staking at a certain percentage. To do this, you can use coins, altcoins or stablecoins. Centralized and decentralized platforms are available for hosting.
- Loans. Cryptocurrency assets can be used as collateral when obtaining a loan. An investor who has invested in a cryptocurrency (Bitcoin or altcoins) can use it as collateral to receive a loan of stablecoins (for example, Dai or Tether) at interest.
- Trade. Cryptocurrency trading is making money from changes in the exchange rate of digital money. Although the exchange rate can be quite unpredictable, making earnings risky, buying and reselling cryptocurrency can bring high returns. As a rule, the most volatile currencies are used for this.
- Asset tokenization. Almost any asset can be used for this: from real estate and precious metals to intellectual property and items in online games. Tokenization is convenient for trading - it makes transactions more transparent. The value of tokens is provided by real goods, which minimizes their volatility.
You can use onchainpay.io as a convenient payment gateway for all your transactions.