Cryptocurrencies have a practical side

I believe one thing is missing in your article about cryptocurrencies (“On the digital bandwagon”, March 2021) is the general misunderstanding held by most people without much knowledge of the subject is that they are purely speculative assets with little to no other use or function.

The Harvard and Goldman Sachs economists suggest that they do not generate cash flow or exposure to economic growth. That might be true for the best-known examples like Bitcoin and Dogecoin, but among the broad range of cryptocurrencies available for you to invest in/ speculate on there is a great wealth of different applications. I’ll give a few examples.

Binance Coin is the cryptocurrency of the crypto exchange Binance. It is used as a cheaper way to pay fees, and holders earn small amounts of “dividends” – portions of tokens from trade fees. It has performed so well because of the exchange’s success and repuIN

tation alongside the growth of the crypto market as a whole.

I hold a cryptocurrency called VIDT Datalink, which is the token for a Dutch company that verifies clients’ digital data and prevents fraud via the blockchain. Adoption results in more transactions and an increased burn rate, resulting in inflationary pressure.

A few months back it merged with another Dutch blockchain company, LTO Network, which has a similar concept, and the token can be “staked” to earn more tokens, at a rate of roughly 5%-7%pa.

These projects have performed well so far and I believe they have a promising outlook, although unfortunately the token value is also influenced by Bitcoin’s volatility.

Alex