As more and more people are introduced to the world of cryptocurrency, they are inevitably faced with the question of what cryptocurrencies can be used for. While Bitcoin and Ethereum are widely accepted as payment methods, other cryptocurrencies serve different purposes. Dai is one such cryptocurrency. With its stability and flexibility, Dai is one of the most versatile cryptocurrencies on the market and can be used in many different ways.
The modern world is increasingly digital, and Dai is designed to work within this digital economy. If you have ever heard of or used cryptocurrency, you know that volatility is one of the chief concerns. Cryptocurrencies can fluctuate wildly in price, making them unreliable as a store of value or payment method. Dai stablecoin is different. Its value is pegged to the US Dollar, meaning it remains relatively stable regardless of the volatility in the cryptocurrency market. This makes Dai an ideal currency for everyday use. But what is Dai, and what can you use it for?
Dai is a smart contract platform on the Ethereum blockchain that enables the creation of decentralized applications and financial instruments such as stablecoins that run on the Ethereum blockchain. Because of its stability, you can use Dai for many different purposes. Your options will depend on whether you want to hold Dai as a long-term investment or use it for day-to-day purchases. You can buy dai to get started on your investment. Some of the ways you can use Dai include:
You can use Dai to make online or in-store purchases, just like any other currency. It is an ideal currency for everyday transactions as it is stable and can be easily converted into other currencies. To spend Dai, send it to the recipient's Ethereum address using your preferred wallet. The transaction will be processed on the Ethereum blockchain, so it may take a few minutes to arrive. For instance, if you wanted to pay for a coffee with Dai, you could use the Changelly widget to convert your Dai into fiat currency. Then, once the transaction is complete, the recipient will receive the equivalent amount in their local currency.
As Dai is pegged to the US dollar, it can be used to hedge against volatility in the cryptocurrency market. If you hold other cryptocurrencies subject to price fluctuations, you can convert them into Dai and avoid losses due to market volatility. For example, let's say you bought 1 ETH for $100 when the price was at its all-time high. If the price of ETH dropped to $50, you would have lost 50% of your investment. However, if you had converted your ETH into Dai when the price was high, you would have been able to avoid losses as the value of Dai would not have fluctuated in the same way.
Dai can be a convenient and cost-effective option if you need to send money overseas. To send money with Dai, you will need to have some ETH in your wallet to cover gas fees. Then, you can use a Dai-enabled wallet to send Dai directly to an Ethereum address. All you need is the recipient's Ethereum address. Enter the amount you want to send and your wallet's passwords after the recipient's address, and Dai will be sent instantly. The transaction will appear on the blockchain within a few minutes. No intermediary banks or third parties are involved, so you can rest assured that your money will reach its destination quickly and securely.
There are many benefits to using Dai. Many of these benefits come from the fact that Dai is US dollar-pegged and runs on the Ethereum blockchain. This provides some advantages over other cryptocurrencies, such as Bitcoin, that are not pegged to any real-world currency. As you buy dai, some of the benefits you can expect include:
As US dollar-pegged cryptocurrency, Dai is not subject to the volatility of the crypto markets. This makes it ideal for use in transactions, savings, and as a stable store of value. You can always be confident that Dai will not lose its value to inflation or market fluctuations. For instance, if you are paid in Dai, you can be sure that the value of your earnings will not decrease over time. This makes Dai perfect for long-term savings.
Since Dai is an ERC20 token on the Ethereum blockchain, it benefits from the low transaction fees associated with Ethereum. This makes it much cheaper than traditional fiat currencies, which often charge high fees for international transfers. If you make regular payments in Dai, you can save significant money on transaction fees. Also, Dai has no central authority, meaning there are no fees associated with its use.
Dai is created and stabilized by the collective action of its users. There is no central authority that controls Dai or sets its price. The decentralization of Dai makes it a more democratic and transparent currency. Because it is not subject to the whims of a central bank, Dai is less likely to be subject to inflation. This makes it immune to censorship and manipulation. Dai can be used by anyone, anywhere in the world, without needing to obtain permission
The highly secure Ethereum blockchain provides Dai with a robust platform for users to transact confidently. Ethereum is constantly being upgraded by a team of dedicated developers, making it one of the most secure blockchains in existence. Dai is less likely to be hacked or stolen than other currencies. All transactions on the Ethereum blockchain are public and immutable, meaning they cannot be altered or deleted. This increases transparency and accountability and makes Dai a more trustworthy currency.
In conclusion, users can utilize Dai in a number of ways to take advantage of its benefits. Dai can be used to send money overseas, avoid losses due to cryptocurrency volatility, or store value in a stable and secure currency. No matter how you use it, Dai provides several advantages over traditional fiat currencies and other cryptocurrencies. Its uniqueness lies in its ability to be pegged to the US dollar and provide users with a stable and censorship-resistant store of value.
Disclaimer: This article is published in association with ByBit and not created by TNM Editorial. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.