Easy
What is the purpose of cryptocurrency?
Cryptocurrencies are presented as a new form of entirely digital currency, exchanged on a secure, publicly accessible network called the blockchain . This decentralized technology is distinguished above all by its ability to eliminate banking intermediaries, streamline transactions , and offer unprecedented applications. In concrete terms, it allows funds to be sent from point A to point B, anywhere in the world, independently and without going through a traditional financial institution. This means more freedom, fewer borders, and immense potential for innovation. But the true heart of this revolution lies primarily in the blockchain .
Table of Contents
What is the purpose of cryptocurrency? Blockchain: the heart of innovation in cryptocurrencies
When asking " what is cryptocurrency used for ?", it's essential to understand that everything relies on a infrastructure : the blockchain . Imagine a large ledger, visible to everyone, secured by cryptographic rules, and updated in real time as soon as a new transaction occurs. This database is maintained by hundreds, even thousands, of computers across the globe.
transaction history without a single institution, such as a central bank, controlling it. The key innovation Cryptocurrencies allow for the holding and transfer of value without intermediaries. This is the first time that technology has made such a level of decentralization and transparency in the financial sector.
How does blockchain work?
The blockchain breaks down transactions into blocks. Each block contains multiple transactions and is cryptographically linked to the previous one, hence the term "blockchain." This method makes the data tamper-proof: once a block is recorded, it becomes impossible to modify it without altering the entire chain. Thus, we obtain a cumulative ledger, highly resilient to censorship and fraud attempts.
Proof of work or proof of stake
To validate the blocks, different methods are used, called consensus mechanisms. The two best known are:
- Proof-of-work : This involves mining through the resolution of complex calculations. This is the case with Bitcoin .
- Proof-of-stake : This "proof of stake" relies on validators locking ("staking") funds to secure the network. Ethereum since its "The Merge" update.
In both cases, there is a financial incentive mechanism for good behavior. Malicious actors cannot manipulate the chain to their advantage, as this would require enormous computing power or substantial sums of money tied up in the system.
How does blockchain change the current system?
Blockchain is disrupting the traditional model of centralized trust. In the traditional banking system, a bank or third-party organization is relied upon to keep track of balances and guarantee the validity of transactions . With cryptocurrencies , the network itself performs this validation role. This results in:
- Total transparency : all transactions are accessible to anyone who wants to check the history.
- Less cost and waiting time: many intermediaries and administrative processes are eliminated.
- token holders can guide the evolution of the protocol.
- Greater resilience: even if one node (a computer validating the chain) stops working, the entire network remains operational.
What is cryptocurrency used for: The different roles
A cryptocurrency is more than just a simple digital currency. Each network can assign different uses to its token. For example, some blockchains require payment of transaction fees or services only in their native cryptocurrency. Most protocols also use it for governance , much like shares on the stock market that give shareholders voting rights: holding the token means being able to vote on key decisions that will shape the future of the project.
Governance: deciding the future of a project
In many decentralized finance ( DeFi ) projects, tokens grant users voting rights. This is often how the community guides development. Crypto holders participate in proposals, discuss, and vote. This decentralized governance creates a sense of involvement and empowers everyone, since the decisions are applied to the code that drives the blockchain or application.
Native payment method
Some projects offer a service or ecosystem. To use it, you have to pay with native cryptocurrency. For example, a decentralized streaming platform might require its own token to access content or to pay creators. This direct use makes crypto a kind of "fuel" for the platform, governed by the protocol's rules (money issuance, inflation, etc.).
It's also a way to reward participating users. The more they use the platform, the more tokens they receive. They can then spend them or exchange them on exchange platforms.
Dividends, staking and passive income
With decentralized finance, it's common to "stake" cryptocurrencies to support network security or application liquidity. staking involves locking funds in a smart contract in exchange for a reward. In a proof-of-stake protocol, this step designates validators who create blocks, and a portion of the rewards is distributed to the stakers. This mechanism can be likened to earning interest, similar to a savings deposit, but managed by a computer protocol rather than a bank.
Fast transactions for e-commerce or everyday payments
More and more companies, including some major players, are integrating crypto as a payment method. Of course, in everyday use, some obstacles remain, such as volatility and variable network fees. But solutions are emerging, such as high-performance Layer 1 servers and low-cost sidechains, to accelerate and secure transactions at a lower cost.
More information about the rewards can be found here.
What is cryptocurrency used for: Concrete examples, from the real world to the decentralized world
To better understand "what cryptocurrency is used for" and its uses, nothing beats some telling examples.
Example of governance on a DeFi protocol
Let's take Aave, a lending and borrowing protocol on Ethereum. Its users can deposit cryptocurrencies as collateral to earn interest, or borrow by depositing another cryptocurrency as security. The project's governance is handled through the AAVEtoken, which grants voting rights on proposals: changing the interest rate, supporting a new token, and so on. Decisions are made collaboratively, without central leadership. Thus, we are moving towards a model where the users themselves shape the service.
Project offering services payable in cryptocurrencies
Let's look at Basic Attention Token (BAT) used in the Brave browser. The goal is to compensate content creators and share advertising revenue more equitably. Users can choose whether or not to see ads, and if they do, they receive BAT tokens. They can then donate these tokens to their favorite websites. Brave is thus funded through this decentralized model where advertising is less intrusive and more respectful of privacy.
The main categories of blockchain projects
Layer 1
A Layer 1 is a main blockchain like Ethereum , Solana , or Avalanche . It's a decentralized infrastructure on which applications can be created without going through a company or bank.
They are also used to executesmart contractcontracts, automatic programs capable of managing operations on their own when certain conditions are met.
Thanks to this, we can now:
- Send money internationally without a bank and in seconds.
- Signing a car or apartment rental contract without a notary.
- Managing a health insurance policy that automatically reimburses treatment if the conditions are met.
- Invest in projects or lend money to others in just a few clicks, via decentralized platforms.
Each Layer 1 has its own cryptocurrency (for example: ETH for Ethereum, SOL for Solana). This currency has several roles:
- Paying transaction fees : each action on the blockchain costs a small amount in native cryptocurrency.
- Ensuring network security : validators or miners are rewarded with this currency to secure transactions.
- Participating in governance : in most cases, holders can vote on changes to the protocol.
👉 For example, on Ethereum, you can use ETH to pay for a money transfer, deploy a rental contract without an intermediary, or interact with decentralized apps like Uniswap, Aave or OpenSea.
In summary, the Layer 1 project provides the technology and security, while the associated cryptocurrency is used to operate and scale the entire ecosystem.
AI and smart services
In the wake of the explosion in artificial intelligence, projects linking blockchain and AI are emerging. The idea is to decentralize access to algorithms, reward computing contributions, and share processing power without intermediaries. Projects like Bittensor connect artificial intelligences using a native token (TAO) , which is used to reward high-performing models and purchase AI services directly on the network.
DePin (Decentralized Physical Infrastructure Networks)
DePin (Decentralized Physical Infrastructure Networks to replace the large companies that currently own our physical infrastructure — such as telecom antennas, cloud servers, or Wi-Fi networks — with decentralized community networks .
Today, these services are provided by centralized players like Orange, Free, Amazon Web Services, or Google Cloud , which own and manage all the equipment. With DePin, individuals themselves provide the infrastructure hotspots, radio access points, or small servers in their homes , in exchange for payment in cryptocurrency .
For example, the Helium network allows anyone to install a LoRa radio access point to create a wireless network dedicated to connected objects (IoT) . In return, participants are rewarded with HNT . The goal: to build a resilient, open, global network without a central authority , where each user can contribute to coverage and earn revenue.
RWA (Real World Assets)
The acronym RWA refers to the tokenization of real assets such as real estate, raw materials, or works of art. This involves transforming these physical assets into digital tokens that can be traded on a blockchain .
The goal is to make them more liquid , meaning easier and faster to buy or sell . Currently, selling an apartment or a share of a company takes weeks, involves high fees, notaries, intermediaries, and cumbersome administrative procedures . With tokenization, these assets can be divided into small pieces and traded instantly, 24/7 , anywhere in the world, just like a simple cryptocurrency.
Specialized platforms already allow the conversion of stocks, bonds, or real estate into tokens. The result: less friction , fewer intermediaries , and more open access to this type of investment, even for small investors.
DeFi (Decentralized Finance)
DeFi encompasses protocols that offer financial services (loans, savings, exchanges, insurance) without banking intermediaries. smart contractreplace banks or credit institutions, and users retain control of their funds through their wallets. Projects like Uniswap and Curve offer automated exchanges, Aave and Compound handle lending and borrowing, and so on.
What is cryptocurrency used for? The major advantages of cryptocurrencies compared to the current system
To answer in detail the question " what is cryptocurrency used for ?", let's focus on the concrete differences compared to the traditional financial system:
- Security : blockchain ensures traceability and almost insurmountable difficulty of manipulation, thanks to cryptographic mechanisms.
- Transparency : every transaction is logged on the network. The protocol rules are public.
- Reduced transfer costs: although there is still a fee , it is often lower than an international bank transfer.
- Universal accessibility: all you need is a smartphone and an internet connection.
- Decentralization : no need for a government or bank to validate financial transactions.
- Programmability: thanks to smart contracts , a wide range of operations can be automated (insurance, loans, lotteries, betting , etc.).
Verifiable data
In 2017, the Cambridge Centre for Alternative Finance estimated the number of cryptocurrency users worldwide 2.9 and 5.8 million 2023 , the French Court of Auditors reported that 14 million people were using crypto-assets in the Eurozone , including between 1.5 and 5 million in France . These figures confirm exponential growth in adoption , both globally and within Europe.
This widespread adoption clearly highlights the benefits felt by both individuals and businesses. Cross-border transfers, in particular, benefit from the speed and lower costs offered by networks like Solana, Base, or BSC.
What is cryptocurrency used for: The role of mining and security
proof-of-work blockchains , mining is the cornerstone of security. Miners use their computing power to solve cryptographic puzzles. The first to find the solution creates a block, adds it to the chain, and receives a cryptocurrency reward . This energy-intensive competition makes attacks extremely costly. No one can "rewrite" the history to steal funds or deceive the community, as this would require deploying more than 50% of the network's total computing power.
In a proof-of-stake , security relies on crypto deposits made by validators . They lock a sum of money onto the protocol, which incentivizes them to act honestly, under penalty of losing their stake. In both cases, the objective is the same: to protect the network against manipulation or double-spending.
What is the everyday use of cryptocurrency?
Some believe that cryptocurrencies are only useful for speculation, and that their volatility remains a drawback. It's true that, being very new and some being dependent on small-scale projects, their volatility can sometimes be striking. In the long term, as the market stabilizes, they will prove all the more relevant for:
- Finance : saving, borrowing or sending money abroad.
- Online shopping: more and more shops are accepting payments in Bitcoin or stablecoin .
- Protection against censorship: people living in authoritarian regimes can circumvent banking bans.
- Supporting creation: artists sell their works in the form of NFTs .
The "daily" aspect is sometimes limited by volatility . But the emergence of stablecoin , pegged to assets like the USD ( USDT , USDC ) or gold, greatly facilitates payments or the use of the blockchain without experiencing strong fluctuations.
What is cryptocurrency used for? Focus on regulation and security
To avoid being scammed, it's important to choose platforms . In many countries, these exchanges must register with a financial regulator. Canada and France, for example, impose KYC (Know Your Customer) rules and sometimes require guarantees of funds. This emerging regulation aims to combat money laundering and fraud. It offers greater confidence to newcomers to the crypto world.
Storage: avoiding unpleasant surprises
Just like your credit card, you need to protect your wallet . Several methods exist:
- On a centralized exchange: the simplest way to buy cryptocurrencies, but you do not hold your private keys.
More information about the rewards can be found here.
- Software wallet: an application on a computer or smartphone, more secure if properly configured.
- Hardware wallet: small encrypted USB key, card or pad, considered the most secure solution.
The private key is the key. Anyone who has it can spend your crypto. It is therefore crucial to keep it safe, and to make backup copies if possible.
What is the purpose of cryptocurrency: What are the obstacles and limitations?
Despite their potential, cryptocurrencies still have some challenges to overcome:
- Volatility : some projects exhibit extreme variations.
- Scalability: many blockchains seek to increase their transaction to compete with traditional payment networks.
- Risk of fraud: scams, market manipulation and "rug pulls" are still common.
- Lack of adoption by the general public: there is a need for simpler, more intuitive solutions.
Fortunately, alternatives are being developed (notably proof-of-stake transaction speed .
What is the purpose of cryptocurrency: On the road to mass adoption?
Cryptocurrencies are far from being a niche phenomenon. Whether for international money transfers, payments for services, governance , or investment vehicles, there is growing interest. Major corporations are also getting involved: Visa stablecoin based payments by launching the Visa Tokenized Asset Platform (VTAP) in 2024, allowing banks to create and manage stablecoin pegged to fiat currencies, such as the dollar or the euro. We are witnessing unprecedented activity, fueled by continuous innovation and the search for new practical applications.
Standardization and legal framework
At the institutional level, the European Union is adopting the MiCA (Markets in Crypto-Assets) regulation to create a coherent framework across all member states. The United States is taking steps to better regulate stablecoin and decentralized finance. For example, the Clarity for Payment Stablecoin Act of 2023 was introduced in the House of Representatives in July 2023 to establish a regulatory framework for stablecoin . Furthermore, the Lummis-Gillibrand Payment Stablecoin Act was introduced in the Senate in April 2024, aiming to provide effective regulation of stablecoin . These legislative initiatives aim to strengthen public trust by reducing fraudulent practices in the crypto-asset sector.
What is the purpose of cryptocurrency? Its potential extends far beyond speculation
In conclusion, asking "what is the purpose of cryptocurrency?" means exploring all the uses enabled by blockchain.
Far from being limited to a speculative asset, it paves the way for financial decentralization where trust no longer depends on a central entity but on a global network.
Cryptocurrencies serve as a medium for everyday transactions, a store of value in unstable economies, a passport for decentralized services, and even a key to governance.
In a world where inflation can slowly but surely erode purchasing power, it's essential to understand the impact of time on currency value. To do this, you can use our inflation calculator between two dates and visualize the long-term erosion of currency.
Thanks to them, anyone can participate in the digital economy without being dependent on banks or borders.
They allow users to pay for services, access applications, compensate validators, reward contributions to a network,
and offer alternative finance solutions in the form of DeFi.
The possibilities are vast and constantly expanding as projects innovate.
Whether you want to transfer money instantly, store value independently, or even tokenize real assets,
cryptocurrencies have a role to play, and their adoption continues to grow.
In this rapidly growing ecosystem, annuaire secous is one of the platforms that lists sites dedicated
to blockchain and new technologies, thus facilitating the discovery of useful projects and resources around crypto.
The future is taking shape against a backdrop of widespread adoption and regulation. Practical benefits for the general public are constantly improving, and blockchain infrastructures are evolving to meet the imperatives of security, performance, and sustainability.
Ultimately, the core of the answer to "what is cryptocurrency for?" lies in this new decentralized universe:
facilitating transactions, sharing value, and radically transforming our relationship with finance and economic exchange.
Cryptocurrency investments are risky. Crypternon cannot be held liable, directly or indirectly, for any damage or loss resulting from the use of any product or service mentioned in this article. Readers should conduct their own research before taking any action and only invest within their financial means. Past performance is not indicative of future results. This article does not constitute investment advice.
Some links in this article are referral links, which means that if you purchase a product or sign up through these links, we will receive a commission from the referred company. These commissions do not incur any additional cost to you as a user, and some referrals give you access to promotions.
AMF Recommendations. There is no guaranteed high return; a product with high potential returns implies high risk. This risk must be commensurate with your investment goals, your investment horizon, and your ability to lose some of your savings. Do not invest if you are not prepared to lose all or part of your capital .
To learn more, read our Legal Notices , Privacy Policy and Terms of Use .
Yoann
Trained as an engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future, I am participating in its democratization by developing Crypternon.
