Bitcoin was created to enable electronic payments directly between two people. Ethereum turned the blockchain into programmable infrastructure. Stablecoins seek to move digital dollars more easily. Decentralized finance makes it possible to exchange, lend or borrow assets through software. Tokenization is even beginning to bring bonds, money market funds and other traditional assets onto blockchains.
Speculation came on top of all this. It now represents a huge part of the market, sometimes to the point of making people forget why these networks exist.
To understand the true purpose of cryptocurrency, we therefore need to look beyond Bitcoin’s price, ETFs, meme coins and promises of 100x returns. The first question raised by crypto was much more fundamental: can value move across the internet without a bank, company or government having to record and validate every transaction?
Bitcoin wanted to send money without a bank
The starting point is Bitcoin. To understand this logic in depth, our complete guide to how Bitcoin works and how to use it covers the network’s technical and monetary foundations.
The document published in 2008 under the pseudonym Satoshi Nakamoto has an extremely revealing title: Bitcoin: A Peer-to-Peer Electronic Cash System. Its abstract proposes a purely peer-to-peer version of electronic cash that would allow payments to be sent directly from one person to another without going through a financial institution.
That was the first purpose of cryptocurrency.
Before Bitcoin, sending a file over the internet was easy. Sending value was much more complicated. If Alice sent a PDF file to Bob, she could keep a copy of the document. With money, this is obviously impossible: Alice must not be able to send the same 100 euros to Bob and then spend it a second time with someone else.
In the traditional system, the bank solves this problem. It maintains a record of balances.
Bitcoin proposed another method: have a distributed network of computers maintain the record and agree on the history of transactions.
Cryptocurrency therefore did not begin as a new type of speculative stock.
It began as an attempt to create digital scarcity.
The blockchain replaces part of the need for trust
A bank works because users trust it to keep its accounts accurately.
Bitcoin seeks to shift that trust.
Instead of trusting a single institution, participants can verify a common set of rules. Transactions are grouped into blocks. These blocks are cryptographically linked to one another. Thousands of computers can store and verify the history.
The blockchain does not magically prevent all human fraud. It addresses a much more specific problem: preventing someone from arbitrarily changing the monetary record without complying with the network’s rules.
Cryptography plays an essential role here.
A user holds a private key, an extremely powerful form of digital secret. This key makes it possible to sign a transaction and prove that the user is authorized to move certain bitcoins. A public key, followed by the addresses derived from it, makes it possible to receive funds without revealing the private key.
This is a fairly profound change.
With a bank account, the bank technically controls the infrastructure and recognizes your right to the balance recorded in its books. With a Bitcoin wallet directly controlled by its owner, the ability to move the funds depends on possession of the corresponding key.
Control becomes more direct.
So does responsibility.
Losing a private key can mean losing access to the money. Giving it to a scammer can produce exactly the same result.
Cryptocurrency therefore does not eliminate trust.
Rather, it seeks to reduce certain forms of mandatory trust and replace them with verifiable rules.
Decentralization does not mean eliminating every intermediary
The crypto ideal is often summed up in one phrase: eliminate intermediaries.
The reality is more interesting.
As we explained in our feature on centralization and decentralization in crypto, the ecosystem has removed certain intermediaries before creating new ones: exchanges, stablecoin issuers, custodians, bridges, infrastructure providers, DeFi interfaces and ETFs.
Bitcoin can be sent directly between two wallets.
In practice, however, many users buy their BTC on a centralized platform.
A blockchain such as Ethereum can run a decentralized exchange without a company directly controlling the funds. Most users still go through a website, wallet or RPC provider to interact with the protocol.
The purpose of cryptocurrency is therefore not necessarily to make every financial company disappear.
It is more about creating a layer where ownership and settlement can operate independently of any particular company.
This distinction is essential.
A user can choose the simplicity of an intermediary.
The underlying network can nevertheless continue to operate if that intermediary disappears.
That is what distinguishes open infrastructure from a database owned by a company. A banking application exists for as long as its bank operates it. Bitcoin, by contrast, has no CEO to call to shut down the network.
This does not prevent economic concentration around the protocol.
Technical decentralization and economic decentralization are not always the same thing.
Ethereum added a computer to money
Bitcoin showed that a network could record and transfer scarce digital value.
Ethereum raised another question: what if the blockchain could also execute programs?
Launched in 2015, Ethereum is generally described as a programmable blockchain platform. Its network makes it possible to deploy smart contracts, meaning programs that automatically execute predefined rules when certain conditions are met. Ethereum.org presents the network as infrastructure for building decentralized applications and organizations.
Consider a simple example.
A traditional contract might say: “When this condition is met, A must pay B.”
In the traditional world, execution then depends on humans, a bank, a court or other intermediaries.
A smart contract can receive assets and directly apply the programmed rule.
It is somewhat like a digital vending machine. You provide the expected input, the machine applies its logic and delivers the result. Ethereum uses this type of comparison to explain its smart contracts.
This programmability greatly expands the purpose of cryptocurrency.
ETH is not only intended to be sent from one wallet to another. It is also used to pay for network usage, secure Ethereum through staking and power thousands of applications.
Crypto then becomes something other than money.
It becomes computing infrastructure where value can be integrated directly into software.
Stablecoins seek to make money programmable
Bitcoin has one characteristic that is powerful for some users and problematic for others: its price can fluctuate dramatically.
A merchant who needs to pay a 10,000-dollar bill next week may not want its working capital to lose 15% in the meantime.
Stablecoins address this problem.
USDT and USDC, for example, seek to remain close to one dollar. Our feature on the advantages and risks of stablecoins explains why this price stability has opened up uses very different from those of Bitcoin.
The stablecoin combines two worlds, in a sense.
The value seeks to track a traditional currency.
The asset moves on a blockchain.
A digital dollar can therefore be transferred between two wallets, integrated into a smart contract, used as collateral or sent to a financial application without passing at every stage through traditional banking infrastructure.
This explains why stablecoins occupy such an important place in crypto payments.
However, one shortcut should be avoided.
A centralized stablecoin is not Bitcoin.
The user depends in particular on the issuer, its reserves and its compliance with the legal framework. Some issuers can also freeze addresses.
We therefore find a form of centralization.
This is not necessarily a flaw for every use case. It is simply a different architecture.
The purpose of a stablecoin is not to create scarce money like Bitcoin.
Rather, it is to make an existing currency much easier to use within blockchain systems.
International transfers offer a very concrete use case
Money transfers remain one of the areas where crypto’s usefulness is easiest to understand.
Sending money within a country can already be almost instantaneous. Crossing a border is sometimes much more complicated: correspondent banks, currency conversions, opening hours, checks, fees and delays can accumulate.
The World Bank closely tracks the cost of small international transfers across hundreds of corridors. Its Remittance Prices Worldwide database covers 377 corridors and is regularly updated.
In Africa, the issue takes on particular importance.
Our guide to crypto use cases in the DRC shows how bank accounts, mobile money and crypto wallets can coexist in the same environment. In some cases, the need is not to speculate on Bitcoin but simply to receive digital dollars or move value between two cities or two countries.
Stablecoins then become a rail.
A company can receive USDT, then convert it into local currency and pay a supplier. A freelancer can be paid from abroad. A relative can transfer value without using the same banking network as the recipient.
This does not mean that the blockchain automatically makes transfers free.
There are still network fees, conversion costs into local currency, the spread and sometimes the intermediary that enables cashing out to mobile money or a bank.
The potential benefit mainly comes from reducing the number of steps.
DeFi seeks to rebuild financial services in code
Once a blockchain can host assets and programs, a logical next step appears: rebuilding part of finance.
This is DeFi, short for decentralized finance.
Protocols make it possible to exchange tokens, lend stablecoins, borrow against collateral, provide liquidity or create financial products without asking a bank to maintain every account.
Consider a very simplified DeFi loan.
A user owns ETH but does not want to sell it. They can deposit the ETH into a protocol, use it as collateral and borrow stablecoins. The smart contract checks the collateral level. If the value of ETH falls too far, the position can be liquidated automatically.
No one needs to call the user and ask them to repay.
The rule was programmed from the outset.
This model offers speed and transparency. It also creates new risks.
An error in the smart contract can be catastrophic. An oracle can provide problematic data. Governance can be concentrated. A protocol can theoretically be decentralized while depending on an interface operated by a small team.
DeFi has therefore not “eliminated traditional finance.”
It has shown that some of its functions can be carried out by open-source software.
This may be one of the deeper purposes of modern crypto: turning certain financial rules into directly verifiable and executable code.
Tokenization seeks to put traditional assets on blockchain
Crypto is no longer seeking only to create new assets.
It is also beginning to represent existing assets.
Tokenization consists of turning an economic right in an asset into a token usable on a blockchain. This can involve Treasury bills, money market funds, gold, credit, shares or, depending on the project, real estate.
As we explained in our feature on major crypto narratives and tokenized real-world assets, RWAs have gradually moved beyond simple marketing talk.
The point is not to suddenly make a US Treasury bill “crypto.”
The aim is to make the asset more programmable.
A tokenized security could theoretically move more easily between different infrastructures, settle more quickly or serve as collateral in another application.
Ownership can also be fractionalized.
A very expensive asset can be represented by a large number of small digital units.
However, this does not eliminate legal reality.
If a token represents a bond held with an institution, the user still depends on that bond actually existing and on the right associated with the token being recognized.
The blockchain can improve the ledger.
It cannot make the physical world disappear.
That is why tokenization is probably less a revolution against finance than a transformation of its infrastructure.
Ultimately, part of crypto could even become invisible: end users will use a financial product without necessarily knowing that a blockchain manages part of the settlement behind the scenes.
Cryptocurrency also makes it possible to directly own a digital asset
An often-overlooked aspect of crypto concerns ownership.
On the internet, we “own” many things only because a company agrees to keep them in its system.
Money held in a payment app depends on that application.
An item bought in a game generally remains recorded on the publisher’s servers.
A social media account can be suspended.
A cryptocurrency controlled by a private key works differently.
The blockchain recognizes the address capable of authorizing the asset’s movement. The user can change wallets without changing the ownership recorded on the network.
The wallet is therefore not exactly the account.
It is instead the tool used to manage the keys that provide access to the assets.
This distinction is fundamental.
If a wallet application disappears, a compatible seed phrase can often restore access through another interface.
This is more like owning a key than owning an account with a company.
This autonomy explains the phrase often repeated in the ecosystem: not your keys, not your coins.
It also comes at a cost.
A bank can sometimes reset a password after verifying your identity. A public blockchain has no global customer service capable of reversing a correctly signed transaction.
Crypto therefore increases user sovereignty while also increasing user responsibility.
It is not necessarily suitable for everyone.
Nevertheless, it is a new property at the scale of the internet.
Speculation was not the original purpose
Today, it is enough to open a crypto app to get the impression that the sector exists mainly to display charts.
Bitcoin rises.
Bitcoin falls.
An altcoin gains 40%.
A memecoin gains 300%.
Another loses 95%.
This economic activity is real. It creates liquidity and attracts capital. Yet it was not Bitcoin’s original purpose.
The white paper did not promise any annual return.
It did not say that BTC would reach 100,000 dollars.
It explained how to enable peer-to-peer electronic payments without a financial institution.
The price came later.
And that makes sense.
If an asset has a limited supply and a growing number of people want to hold it, its price can rise. That increase then attracts investors who may have no interest in using the network.
This brings us to the current paradox.
Bitcoin was built to transfer value.
A large share of its holders would prefer never to spend it.
They view it as a store of value.
Elsewhere in the market, the gap can be even wider: tokens are created almost solely to be traded, without any genuine economic need surrounding the network.
It is therefore necessary to distinguish the purpose of a technology from the use the market makes of its token.
The two can become very different.
Not every cryptocurrency necessarily has a use
More than fifteen years after Bitcoin, the word “cryptocurrency” has become extremely broad.
Some cryptocurrencies secure a blockchain.
Others pay for computing fees.
Some serve as stablecoins.
Others represent governance rights.
There are also tokens linked to games, DeFi protocols, infrastructure networks, social platforms or real-world assets.
And then there are cryptocurrencies whose economic utility is very difficult to identify.
This is important for understanding the sector.
The fact that an asset uses a blockchain does not automatically mean that it solves a problem.
Creating a token is relatively easy.
Creating lasting demand for that token is much harder.
This difference explains why some projects disappear after one cycle.
When promotional rewards end, users leave. Liquidity declines. Developers abandon the project. The token may technically continue to exist even though its economy has practically stopped.
Memecoins push this logic even further.
Their purpose may be primarily community-based, cultural or speculative. They do not necessarily claim to replace a bank or provide complex infrastructure.
That is not the same proposition as Bitcoin or Ethereum.
Asking “what is cryptocurrency used for?” therefore requires a second question:
which cryptocurrency are we talking about?
A dollar, a Tesla share and a gift card are all assets expressed in digital units in certain databases.
They obviously do not serve the same purpose.
Crypto follows exactly the same logic.
Crypto does not solve every problem with money
Cryptocurrency also has very concrete limitations.
Volatility remains the most visible.
An asset capable of losing 20% in a few days is not ideal for setting the price of bread, paying a monthly salary or holding cash needed the following week.
Stablecoins reduce this problem.
In exchange, they reintroduce dependence on an issuer and a traditional currency.
Network capacity is another challenge. A public blockchain must balance decentralization, security, speed and cost. Solutions such as Bitcoin’s Lightning Network or Ethereum’s Layer 2 networks specifically seek to move some transactions off the main layer.
The user experience also remains imperfect.
Long addresses, seed phrases, variable fees and different networks still make some operations much less intuitive than a card payment.
Then there is regulation.
A transaction may be technically possible and legally prohibited in a jurisdiction. Companies must comply with anti-money-laundering rules, tax requirements, sanctions and user-protection obligations.
Finally, decentralization itself has several degrees.
A protocol can use a blockchain while depending on a company. A stablecoin can be transferred on-chain while being issued centrally.
Crypto should therefore not be judged against an abstract promise to “decentralize everything.”
Each architecture needs to be examined separately.
The real goal is to make value native to the internet
The internet made digital information almost instantaneous. A message can cross the planet in a few seconds. A video can be published in Kinshasa and watched immediately in Paris. A developer in Nairobi can collaborate with a company in New York.
Money has remained much more fragmented. Each country has its banks, currency, opening hours, intermediaries and settlement systems.
Cryptocurrency is partly trying to reduce this gap. Bitcoin began by allowing two people to transfer digital value without sharing a bank.
Ethereum allowed this value to interact with code. Stablecoins brought traditional currencies into this environment. DeFi built programmable financial markets.
Tokenization is beginning to connect assets from the traditional world to these same rails.
In Africa, this development is already visible in cross-border payments. BrefCrypto recently noted that legitimate crypto activity accounts for the vast majority of observed flows, while payment costs remain a concrete driver of adoption on the continent. The purpose of cryptocurrency is therefore not simply to “make money.” Nor is it necessarily to destroy banks. The most important change lies elsewhere: making value native to the internet.
A digital asset can be owned directly. It can be sent. It can serve as collateral. It can be placed in a program. It can interact with other assets and applications. And some of these operations can function without a central company being required to maintain the primary ledger.
