Cryptocurrency Use Cases: What’s the Public’s Pick?
CoinGecko has undertaken research to pinpoint how individuals utilize cryptocurrencies. Investments, staking, and regular transactions emerged as top preferences, whereas crypto-based lending hasn’t caught on just yet.
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Even though cryptocurrencies can be employed in a myriad of ways, the majority of users predominantly view them as financial assets. Hence, the eight preferred options provide a fairly comprehensive snapshot of their current use.
Investing and Staking
Bitcoin has long been deemed the digital equivalent of gold. A whopping 93.9% of people employ cryptocurrencies for long-term investments, with only 37.9% stating they invest on a regular basis.
The prospect of earning a passive income has led to a surge in interest for staking, placing it second in popularity. An impressive 88.8% of individuals utilize it, but only 20.1% do so consistently. It appears that many either prefer to avoid excessive risk or harbor reservations towards staking providers.
Payments
Interestingly, despite the inception of digital assets for swift transactions, this use case only takes the third spot. A substantial 84.5% of users purchase goods and services or simply move cryptocurrencies between wallets. Considering the limited prevalence of crypto (when compared to traditional fiat currencies), the fact that 53.1% of those surveyed occasionally resort to crypto for purchases is a noteworthy statistic.
Trading
Trading comes as a natural progression from investing, with 81% of individuals actively involved in cryptocurrency trading. Some participants place trades daily (9.4%) in an attempt to reap greater profits, while others opt for less frequent trading, focusing exclusively on trusted assets (21.6%). A cautious approach seems prevalent as the majority (54.6%) only sparingly engage with exchanges.
Initial Token Sales and Yield Farming
These opportunities primarily appeal to seasoned users, but a considerable number of investors also engage in initial token sales, representing 79.6%. This trend partly stems from the transition from ICOs to IEOs, significantly simplifying the process of acquiring favored tokens before their official listing. However, only a small fraction (8.9%) regularly participate in such sales.
In contrast, yield farming, which requires a robust understanding of cryptocurrencies, is the sixth most popular activity (as noted by 74.7% of respondents). This substantial fraction suggests investors are relatively savvy. While yield farming trails behind staking in popularity, the latter is easier to grasp from a technical standpoint.
Governance
In recent times, many projects have launched airdrops, intending to hand over governance to their community and thereby establish a decentralized control system. Although voting on specific actions proposed by developers doesn't directly yield profit, 74.5% of users participate in DAOs, with 21.1% of them routinely or frequently casting votes on protocol modifications or other pivotal decisions. It's worth noting that voting in DAOs is conducted via cryptocurrency tokens.
Crypto Lending
The survey's least popular sector was crypto lending, overlooked by 42.4% of cryptocurrency holders. Despite the abundance of lending platforms, people seem more deterred by the concept of borrowing funds than by the associated risks. Consequently, a meager 6.3% of users make consistent use of lending platforms.
Final Words
Cryptocurrency has become a favored alternative market asset, especially for those excluded from traditional markets. Staking, yield farming, and initial token sales offer enticing earning opportunities. However, the number of scenarios where digital assets are employed as a payment medium should be expanded.
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