Currencies such as the Japanese yen are used for a wide range of purposes, including shopping, remittances, and savings. Given that crypto assets (also known as virtual currencies) are also referred to as an "asset" or a "currency," it's natural to wonder what they can actually be used for.
The defining feature of crypto assets is that they allow individuals to exchange value directly with one another, without going through a central authority such as a bank or a government. This mechanism has, in fact, made possible uses that were difficult to achieve within conventional financial and payment systems.
This article explains what crypto assets can be used for, using real-world examples of how they are applied.
What Can Crypto Assets Be Used For? 7 Real-World Use Cases
While crypto assets are often discussed as an object of speculation, they actually serve a number of different purposes.
- Investment
- Payments
- Remittances
- Donations and support
- Foundation for services and apps
- Exchange with fiat currency
- Fundraising
Understanding each of these uses helps clarify how crypto assets are actually being used. Let's look at concrete examples of each, one by one.
Role ①: Investment
Crypto assets are used as an investment vehicle, where investors aim to profit from price fluctuations. This investment aspect is one of the main reasons many people are interested in crypto assets today.
Like stocks, the prices of crypto assets are determined by the market, and their value fluctuates based on the balance of supply and demand. For many tokens, the total issuance and supply rules are predetermined, and trading takes place under those fixed conditions. As a result, the market mechanism tends to work in a relatively straightforward way: prices rise when demand increases and fall when demand weakens.
In practice, investors exchange fiat currencies such as the Japanese yen for crypto assets on an exchange, buy when they judge the price to be undervalued, and sell once the price has risen, aiming to profit from the difference. This basic approach is essentially the same as stock investing or FX trading.
On the other hand, crypto assets can be traded 24/7, 365 days a year, and tend to experience large price swings. This means that while there is potential for significant profit in a short period, there is an equally significant risk of substantial losses, which requires caution.
When treating crypto assets as an investment, it's important to understand the underlying mechanisms and risks rather than basing decisions on price movements alone.
Role ②: Payments
Crypto assets are used as a means of payment for goods and services at some merchants and compatible services. They can be used for payments because they allow value to be transferred directly to another party over the internet (in practice, a service provider sometimes acts as an intermediary to process payments smoothly).
As a concrete example, Bic Camera, a major Japanese electronics retail chain, accepts Bitcoin (BTC) as a form of payment.
However, the number of stores and services that accept crypto asset payments is still limited, and they cannot be used in every situation. While practical examples exist, given the scale of price volatility and the limited range of acceptance, it is more appropriate at this stage to view crypto assets as one option used in specific situations rather than as a means of everyday payment.
Role ③: Remittances
Crypto assets can be used to transfer value directly from one individual to another, functioning as a form of remittance. This characteristic is especially evident in cross-border remittances and fund transfers that bypass financial institutions.
When sending Japanese yen overseas, the transfer must go through a bank or remittance service, which involves fees and takes time for the funds to arrive. Crypto assets, by contrast, are processed on the blockchain, which means they can be sent without going through national borders or financial institutions. As a result, transfers can be made simply by specifying the recipient's wallet address, regardless of the destination region or currency.
One point of caution is that a transaction cannot be reversed if the recipient's address is entered incorrectly, and transfers are also subject to price volatility. For these reasons, when using crypto assets as a remittance method, it is important to understand the mechanisms and risks involved and to handle transactions carefully.
Role ④: Donations and Support
Crypto assets are also used as a means of donating to or supporting individuals and organizations. A key characteristic of crypto asset donations is that they are less constrained by national or regional borders, allowing value to be sent to recipients far away.
Donations can be sent simply by specifying a wallet address, and in some cases support is provided without assuming the recipient has a bank account. Because the mechanism allows funds to be sent directly without an intermediary, it also makes it easier for the donor's intent to reach the recipient.
Because of these characteristics, crypto assets are considered a well-suited means of donation and support. However, it should be noted that the recipient must be able to accept crypto assets, and that transfers are subject to price volatility.
Role ⑤: Foundation for Services and Apps
Beyond payments and remittances, crypto assets are also used as a means of accessing certain services or as usage fees for them. In this context, crypto assets are positioned not simply as a means of payment but as part of the mechanism that runs the service itself.
In practice, using a service or executing a specific process may require a payment in crypto assets. A representative example is Ethereum (ETH), on top of which various mechanisms have been built, including trading services and digital content management.
In these services, crypto assets are used to carry out operations and execute contracts. Services that were traditionally managed centrally by a company or operator can, within a crypto-asset-based framework, be processed automatically according to predetermined rules, without depending on a specific administrator.
In this way, crypto assets are not limited to being a "means of payment" — they also play a role in making the service itself function.
Role ⑥: Alternative to Fiat Currency
Crypto assets operate on a different mechanism from fiat currencies issued by governments and are sometimes used as an alternative means of storing and transferring value. Here, "alternative" means being used in place of the Japanese yen or the U.S. dollar for the purpose of storing or transferring value.
Fiat currencies are issued and managed by a country or its central bank, whereas crypto assets operate based on common rules without depending on any specific country or institution. Because of this characteristic, there are situations in which crypto assets are considered less susceptible to the economic conditions or monetary policy of a particular country.
For example, in regions where the value of the local currency is unstable, there are cases where people hold part of their assets in crypto assets or use them to transfer value across borders.
Another characteristic is that value can be held and transferred as long as one has an internet connection and a wallet, regardless of whether one has a bank account.
Role ⑦: Fundraising
Crypto assets are also used as a means of raising funds when launching a new service or business. A representative mechanism for this is the ICO (Initial Coin Offering).
An ICO is a method in which a company or project issues its own token and raises funds by having people purchase it. Unlike bank loans or stock issuance, its distinguishing feature is that it can raise funds broadly over the internet.
Around 2017, the use of ICOs spread globally, and many projects raised funds through crypto assets. At the same time, there were cases where funds were raised despite unclear business details, and instances where purchasers participated without receiving sufficient information, which has led to calls for investor protection and regulation.
Reference: Fundraising Using Crypto Asset Technology (in Japanese)
In this way, fundraising through crypto assets is a new option, but it is also a method that requires careful judgment based on an understanding of its mechanisms and risks.
Conclusion
Understanding the use cases of crypto assets is an important perspective for thinking about what underlies their value. The price of crypto assets is not determined by expectations or hype alone. Supply and demand shift depending on how a given asset is actually used, which in turn affects its price.
For example, for crypto assets used in payments and remittances, demand tends to rise as the number of users and compatible services increases. For crypto assets that function as a platform, the value is influenced by the growth of services and projects built on top of them.
On the other hand, crypto assets that attract attention without a clear, concrete use case tend to have a weaker basis for price increases and less support during downturns. Such tokens can be more difficult to evaluate as investments.
When considering an investment in crypto assets, it is important not to base decisions on short-term price movements alone, but to check where and how the asset is actually used and what role it plays. Understanding its use cases makes it easier to judge whether that demand is likely to continue or is only temporary. When making investment decisions, keeping the question "what is it actually used for?" in mind is essential.
This article is for informational purposes only and does not constitute financial or investment advice. Please consult a qualified professional before making investment decisions.
