Cryptocurrency has made some serious waves since Bitcoin's meteoric rise. In early August, the flagship cryptocurrency was worth less than $3,000 per coin; recently it was worth nearly $20,000 at its peak.
Many experts have warned that Bitcoin's ongoing value increases represent the effects of a classic speculative bubble, where investors pour money into a product that has become detached from any real-world value. But cryptocurrency isn't inherently speculative. There are multiple ways these blockchain-based currencies can be applied to the real world, and efforts are underway to do exactly that.
BizX
BizX is a network of small businesses that are experimenting with a digital currency called "BizX dollars." BizX dollars are not a cryptocurrency on the blockchain, but a digital currency pegged to the U.S. dollar. Businesses in the network earn BizX dollars by offering goods and services to other members in the network, or they can receive a line of credit in BizX dollars from BizX itself.
Bob Bagga, CEO of BizX, notes that because this currency is attached to the dollar, it "avoids volatility, and it also makes it easy for people [in the network] to price their goods and services."
BizX dollars aren't the end of the line for BizX currency, Bagga said. Creating a stable alternative currency in the network has given BizX the opportunity to create a cryptocurrency that acts as an entrance into crypto markets.
ExsulCoin
ExsulCoin is about to launch its initial coin offering focused on social value. Aimed at providing educational opportunities and assistance to refugees entering new countries for the first time, ExsulCoin gamifies education by rewarding users with tokens that can eventually, after they complete advanced courses, be exchanged for crypto that is tradeable on the open market.
"We look at the idea in terms of both cryptocurrency and blockchain," said James Song, CEO of ExsulCoin. "Blockchain allows you to store things in a decentralized way – things like health records, refugee status – and store it using biometric data."
XTRADE.IO
XTRADE.IO is an exchange platform that capitalizes on the speculative investment in the crypto world right now, but it creates real value by offering a streamlined, accessible platform for investors to stay apprised of trading in real time. Rather than crypto investors having to maintain many disparate accounts on different crypto exchanges, XTRADE.IO offers them a single, centralized location from which to facilitate all their trading activity.
"The problem with crypto is essentially that there isn't underlying value," said Alexander Kravets, co-founder of XTRADE.IO. "Bitcoin is not tied to real estate or intellectual property or anything … and so essentially what's happening is people are purchasing it as a store of value and there's not a lot of it."
As in any new industry, the good ideas will have to sink or swim on their own. The tokens and products that generate real value and fill real need will likely remain, while those that fail to address real concerns will fall by the wayside. One thing is for sure, however: Cryptocurrency is not synonymous with speculative investment.