The success of Bitcoin, which began in 2009, has led to a boom in the world of cryptocurrencies. Today, there are thousands of cryptocurrencies – each representing something different and competing for the attention of users and investors.
Many of the early cryptocurrencies were forks of successful blockchains, such as Bitcoin. Simply put, this meant that the code was copied and pasted to create a new currency, with certain elements changed to make more efficient.
Later, with the development of more flexible blockchains that offer a wider range of applications, such as Ethereum and Waves, it has become much easier for users to create and issue their own currency. Nowadays, anybody can issue their own currency, albeit there is no point in doing so without a real purpose.
So why create a new currency?
The following is a brief overview of use cases on how creating a new currency may be beneficial to a user or organization:
Corporate Currencies: A company may want to create a corporate currency to use to reward customers or create loyalty. An example of this would be to create a currency that will be used similar to Air Miles rewards points or coupons. Many companies, from local fast food restaurants to larger multinational companies, have started issuing their own currency for this purpose.
Subscription Services: In using a cryptocurrency secured by the blockchain, a user or customer can be granted access to a service digitally. Through the use of a smartphone app, proof of ownership can be provided, which would be impossible to duplicate but remain transferable. This can be applied to any service; such as access to facilities (gyms, museums, offices), subscription services like Netflix, web services, or memberships, or even one time use services like trains, schools, community clubs, etc.
Community Currencies: Local community currencies exist today all over the world, and a quick search will show you surprisingly how popular they really are. Many of them have trouble gaining traction and fail due to mismanagement. The solution is to issue it using a credible database like the blockchain.
Rather than creating a new currency just to access one company’s services like in the above examples, imagine a group of companies and organizations using one familiar currency, bypassing global systems like Visa and reducing the costs of transactions between everyone in the community.
Smart Properties: A company involved with the leasing or sales of properties can add automation and cost savings to their business using their own currency. Here’s how it would work: The currency can be used as a token to represent an asset, which can be bought and sold freely. The owner of the token would then have access to the asset and can be used with their smartphone as the ‘key’ for whatever time specified. This is especially valuable in businesses like property rental, car rental, bike rental, office space, or in particular, any asset that access can be controlled via an IoT device.
Asset Representation: A company may issue a currency to represent a particular asset. An example would be a company storing gold bullions issuing a currency to customers to represent their gold stored with them. Currency owners could sell or transfer that currency to others, and would in effect transfer ownership of the respective physical gold to the buyer without physically having to do so.
Digital Collectibles: Companies, artists, and creators can attach their own currency to a digital asset, allowing them to track and receive royalties on that asset based on usage.