More and more people are starting to see the use of Bitcoin and other coins within the crypto market as something tangible. That leads us to wonder what the top use cases for bitcoin are in 2020, and what they will look like in the years to come.
If you have ever read the Bitcoin whitepaper by Satoshi Nakamoto, you will see the first line says the following:
A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
Top Use Cases For Bitcoin
While that vision has turned into a reality, the advancements in technology are enabling people and institutions to do much more with cryptocurrency than just send your friend some money. One of the reasons for fear of crypto, though, is that people have used it for the black market and gambling. Now that those areas of use are getting more complicated, we should start looking at the legitimate use cases for Bitcoin and other coins. If you would like to find out more about how to buy coins, click here.
Of course, as the whitepaper suggests, the original use case for Bitcoin is a digital cash system, and it has completed that stage well enough for it to be a continued system with various institutions. However, the early operations of Bitcoin became too highly-priced for the sale of smaller items and goods. While that may seem like an excellent reason for the continued use, it isn’t. When you are dealing with factors as low as 0.0011 BTC for $10 (today’s price), it can become very confusing.
In July 2017, an altcoin of BTC called Bitcoin Cash (BCH) became available. It has a much lower value, thus more natural to use for smaller transactions. Other than the initial 18 months, it is also much more stable in price value than BTC. There are correlations between the BCH and BTC, though, and the cost of BCH does change, but as of today, 1 BCH is $250.05. Now $10 is 0.040 BCH, which is slightly more manageable than 0.0011 BTC.
During the 2019 MIT Bitcoin Expo, Abra CEO Bill Barhydt spoke about the app, and how the company allows users to peg the value of Bitcoin to other substantial assets. However, after that presentation, he told the audience how he believes that his app will be one of the best use cases of Bitcoin.
Mr. Barhydt explained that the collateralization of real-world assets to facilitate banking would be the best way to enable real-world payments. However, his view is also that there is not enough Bitcoin in circulation to facilitate the full potential of the company.
Adding to the ability of Abra, they intend to change the Abra wallets to Lightning wallets. They are server and network wallets that will enable exchanges and banking institutions to hold those “synthetic” assets. See our guides section for more information.
After the first digital currency, e-gold in 1996, Nick Szabo introduced smart contracts with a virtual currency called Bit Gold. Nick defined smart contracts as a computerized transaction protocol that would execute contract terms. Those “smart contracts” were the first transactions that were traceable, transparent, and irreversible. Szabo wanted to extend the reach of functionality into electronic transaction methods such as Point of Sale.
However, in the more modern era, RSK has taken over the bidding for smart contracts with a dedicated platform. Their platform is taking advantage of the network effects and security that is already in place for the Bitcoin blockchain to maximize on the programmable money aspect of smart contracts.
While blockchain governance is not one of the most appealing things to see as the best use case for Bitcoin, however, on-chain voting is very useful. Bitcoin miners have used governance for a relatively long time to show their support for protocol changes. While governance is more practical now than it ever has been, especially with the introduction of Dash, there can still be some improvements.
However, the primary issue with blockchain governance is not the modalities that are supporting it. The more challenging aspect is the participation of voters. Maybe this is something that will change in the future, and if it does, then it certainly will be one of the top use cases of Bitcoin.
One of the future best use cases for bitcoin, in my opinion, will be collectible items as a unique digital asset. For example, things that you can buy as an in-game addon, characters, skins, specific game currency, etc. There are a lot more people in the gaming industry that will accept Bitcoin and other cryptocurrencies as payment than there are in the “real-world” industries such as shops.
With the introduction of the payment merchants like Flexa, as spoken about before, we think that they will become more widespread in apps and games. While most of those NFTs (Non-Fungible Tokens) are decentralized, it doesn’t mean that all of them will be in the future. As the idea of NFTs becomes more available inside games and apps, it is likely that e-sports will take the crown for payments and winnings in cryptocurrency form.
There are a lot of use cases for cryptocurrencies, and BTC is the leader of the pack still. That means that the use of BTC and other minor currencies will see more development in use in the coming years. However, there is a lot of regulations that still need to be overcome before that can happen.