🤷Module 1.1.2. How do people use crypto?

Now that we’ve explored what cryptocurrency is and why it has value, let’s look at how people actually use it in daily life.

Cryptocurrencies are tools that a lot of people use to send money, make purchases, invest long term, and participate in new kinds of financial and community projects.

In this section, we’ll break down the everyday uses of crypto, how people get and manage their coins, and look at some more advanced uses already in motion.

a) Everyday Payments and Long-Term Investments

One of the original purposes of Bitcoin was to serve as a digital payment method, allowing people to use crypto to send money directly to others, both locally and across borders.

For example, if you have family overseas, you can send them crypto quickly and often with, usually, much lower fees than a traditional bank transfer.

Crypto transactions make cross-border payments simpler, faster, and cheaper by cutting out middlemen.

In fact, sending money to someone across the world will carry the same fees as sending it to someone right next to you.

This has made crypto popular for remittances (sending money home to family) and other peer-to-peer transfers.

Cryptocurrency is also used for buying goods and services.

An increasing number of merchants and businesses accept Bitcoin, Ethereum, and some stablecoins (crypto tied to the price stable assets like the US dollar) as payment.

Large companies such as Microsoft, PayPal, and Starbucks already accept cryptocurrency for some payments.

This means you could purchase apps, games, or even a cup of coffee using your crypto if the vendor supports it.

Often this spending is done via crypto payment apps or debit cards that instantly convert your coins into local currency for the merchant.

While crypto isn’t as widely accepted as cash or credit cards yet, its use in everyday shopping is growing as businesses see the advantages that crypto payments can offer.

Apart from payments, many people treat cryptocurrency as a part of their personal finance portfolio.

For example, some people use crypto like a savings tool. They convert a portion of their earnings into a low risk cryptocurrency or a stablecoin(for staking or saving) and hold it for the long term.

In some cases, they stake their tokens, which means locking them up in an account for a certain amount of time to support the network and earn passive rewards in return.

Others approach crypto like an investment: buying coins and tokens as assets they expect to rise in price, similar to buying stocks, just a lot more volatile.

Because popular cryptocurrencies like Bitcoin have historically gained value over years (despite short-term ups and downs), holders view them as a store of value or a hedge against inflation.

In crypto terminology, long-term holders often joke about “HODLing” (a meme for holding onto your crypto no matter what), which is a great example to showcase the confidence people have in this tech and market.

Using crypto ranges from quick day-to-day transactions to long-term investment strategies, to simply enjoying owning digital art.

There's no perfect way to invest or get involved, it all depends on your personal and financial preferences.

b) Using Crypto Wallets: Public and Private Keys

A crypto wallet is like your keyring for the blockchain. It’s a tool that holds your personal codes, known as public and private keys, so you can send, receive, and keep track of your coins.

Think of it as a mailbox: the public key, or wallet address, is the address where others can send you crypto, and the private key is your secret PIN to solve the lock and spend what’s inside.

If you want to use crypto directly, you need a wallet.

Some people invest in crypto through certain financial tools that don't require ever using a wallet, but that means they are not interacting with the blockchain themselves.

This makes sense for some investors, especially those just looking for price exposure. But it also means missing out on what makes blockchain truly unique: the ability to have control, interact directly, and experience decentralization.

Nowadays, using a crypto wallet typically feels straightforward: you open the app, see your balance, and can send or receive coins.

To receive crypto, you share your wallet’s address(public key), just like telling someone your PayPal or bank account info.

To send crypto, you enter the recipient’s address, choose an amount, and hit send.

The wallet app will then use your private key to sign and broadcast the transaction. Kind of like needing to present your ID at the bank to make any transactions.

After a short time (it could be seconds or minutes, depending on the coin’s network speed), the transaction is confirmed on the blockchain and the recipient sees the funds in their wallet.

To suit different needs, wallets come in different forms.

Mobile and desktop wallets (apps like Coinbase Wallet, MetaMask, Trust Wallet, etc.) are convenient for daily use.

There are also hardware wallets (physical wallets) that stay offline and connect to your computer for added security.

Some people even use paper wallets (literally printing your keys on paper and locking it away) for long-term storage.

But no matter the type, the core idea is the same: wallets manage your keys, and your keys control your crypto.

As the saying in crypto goes, “Not your keys, not your coins”, meaning if you leave your crypto on an exchange or somewhere you don’t control the private keys, you’re trusting a third party.

So, learning to use your own wallet is empowering, as it gives you full control over your digital money.

Later, in Module 2, we will dive deep into how they work, the types, best security practices, etc.

For now, just know that they are how you hold onto and use your coins.

c) Buying and Selling Cryptocurrency on Exchanges

How do people actually get cryptocurrency in the first place or convert it back to regular money?

The most common method is through a centralized exchange(CEX).

A CEX is an online platform (or app) where you can buy, sell, or trade crypto. You can think of it like a currency exchange or stock brokerage, but for digital coins.

A centralized exchange provides you with a custodial wallet, where the main difference to normal non-custodial wallet is who holds the keys.

With a custodial wallet, the exchange manages your coins for you. You do not have to handle private keys or worry about blockchain transactions.

The platform takes care of everything in the background, which makes it easy for beginners to get started.

• Less responsibility = Less risk

• More responsibility = More freedom

Using a CEX usually works like this: You sign up for an account, prove your identity (many exchanges require KYC for security and regulatory reasons), and then you can connect your bank account or credit card.

Once set up, you can deposit your local currency (like dollars or euros) and use it to buy cryptocurrencies such as Bitcoin or Ethereum at the current market price.

The exchange matches your buy order with someone looking to sell, and you now own crypto.

Similarly, if you want to sell crypto, you place a sell order on the exchange, and when it’s fulfilled you’ll get the equivalent value in your local currency, which you can withdraw to your bank.

To strengthen their main selling point, exchanges make trading fairly user-friendly. Many have mobile apps and interfaces that resemble online banking or stock trading platforms.

Some popular centralized exchanges are Coinbase, Binance, Kraken, and others.

They hold your crypto for you in an account (much like a bank holds your money) until you decide to withdraw it to your own wallet.

This is recommended for new users, though it means you’re temporarily trusting the exchange to keep your coins safe. In some cases, exchanges have shut down or been hacked, leaving users unable to recover their funds.

Some people keep their crypto on the exchange for convenience and security, especially if they trade frequently, but others withdraw to their non-custodial wallets for greater control (remember: not your keys, not your coins).

Besides buying and selling, exchanges let you swap between different cryptocurrencies (for example, trade Bitcoin for Ethereum) and often offer additional services like staking, savings accounts, options trading and much more.

There are also decentralized exchanges (DEXs), which work like open marketplaces where people trade crypto directly with each other.

Instead of being run by a company, DEXs operate through smart contracts. These are self-running pieces of code that manage trades automatically and fairly.

Think of smart contracts like a vending machine for crypto. You make your selection, the machine checks your payment, and it gives you what you asked for. No cashier is needed.

The DEX simply connects users and runs the contracts behind the scenes. It does not hold your funds or control your trades. Instead, it uses smart contracts to match buyers and sellers, then carries out the transaction on-chain.

Everything is automatic, transparent, and happens straight from your wallet, so you stay in control the entire time.

However, decentralized exchanges can be a bit complex for beginners, so most newcomers start with the traditional centralized exchanges that feel more like familiar online services.

To put it simply, centralized exchanges are the main on-ramps and off-ramps to crypto. They’re how you convert your regular money into crypto and vice versa.

Decentralized exchanges, on the other hand, give you full control. You trade directly from your own wallet, using smart contracts instead of a middleman. It takes more effort and understanding, but also gives you more freedom and ownership.

As with any financial service, it’s important to choose reputable exchanges and be mindful of security (like using two-factor authentication and being cautious of phishing).

If you haven't quite grasped the concept of CEX's or DEX's and how they operate, don't worry, we will dive deeper in later modules.

d) Beyond the Basics: DeFi, NFTs, Staking, and DAOs

As you now know, cryptocurrency isn’t just about sending money or holding coins, it has unlocked a whole ecosystem of more advanced uses.

You might hear about things like DeFi or NFTs on social media or from your friends. These are part of the exciting innovations in crypto, but don’t worry, you don’t need to know all the details yet.

Here’s a quick introduction to some of the major advanced use cases (we’ll explore these in depth later in the academy):

• Decentralized Finance (DeFi):

Decentralized Finance is an emerging field that uses blockchain and crypto to recreate financial services.

With DeFi, users can lend their crypto and earn interest, borrow assets by putting up collateral, or trade tokens with others using DEX's.

Instead of going through a bank, you interact directly with other people using apps built on blockchains.

DeFi also allows people to do things like automate investment strategies or take part in new types of financial tools that only exist on the blockchain.

This also includes staking, which is a way to earn rewards by locking up your crypto to help secure a blockchain network. We’ll explain it in more detail below.

DeFi is like a financial system run by code and community , open 24/7, with no paperwork.

• Staking:

In the context of newer cryptocurrencies, especially those that use “proof of stake” networks(we will dive into PoS later), staking is a way to actively participate in running the network and earn rewards.

Staking means locking up some of your coins in a wallet to help run the blockchain securely. You’re helping the system, and the system thanks you by paying you in more crypto.

Many exchanges and wallets make staking as easy as clicking an “earn rewards” button, but it does require you to lock your coins for a certain period.

Staking is a bit more advanced than just holding crypto, but it’s become a popular way to grow your crypto portfolio while supporting the system.

• Non-Fungible Tokens (NFTs):

NFTs are unique digital collectibles or assets on the blockchain.

Unlike regular tokens like Bitcoin, which are all the same and interchangeable, each NFT is completely unique. That’s what “non-fungible” means: it cannot be swapped one-for-one with another.

At its core, an NFT is just a piece of data recorded on the blockchain that says who owns a specific digital item. For example: digital art(most common), music, virtual real estate, or even a one-of-a-kind in-game item.

They became famous when digital artworks and memes, such as the BAYC collection, started selling for 6-7 figures as NFTs.

NFTs have opened up new ways for creators to monetize content and for fans to own verifiably scarce digital items.

Owning an NFT is kind of like owning a famous painting say, the original Mona Lisa.

Sure, millions of people can see the Mona Lisa online, take photos of it, or even hang a poster in their room. But there’s only one real, original, and everyone knows who owns it: the Louvre museum.

• Decentralized Autonomous Organizations (DAOs):

A DAO, or Decentralized Autonomous Organization, is like a digital club or community where everyone makes decisions together, and there is no single person in charge.

Instead of having a boss or CEO, the group uses smart contracts to run things.

Members usually vote on proposals using tokens, and the more tokens you hold, the more weight your vote carries. For example, if a DAO has 100,000 total tokens and you hold 100 of them, you control 0.1% of the voting power. This is similar to owning shares in a company.

Once a proposal is submitted, members vote over a set period. If the required support is reached, the smart contract automatically carries out the decision. That might mean spending community funds on a project, changing the rules of the DAO, launching a new feature, etc.

You can think of a DAO as an online organization. It might look like a business, a charity, a fan club, or a group that wants to invest money together.

But instead of working through emails, managers, or boardrooms, everything runs through code and community voting.

Some DAOs collect money from members and decide together how to spend it. Others manage creative projects or build new technology with open input from anyone in the group.

The big idea behind DAOs is shared ownership.

People from anywhere in the world can team up, organize around a common goal, and make decisions together without needing a traditional company or leader to guide them.

These are just a few of the advanced crypto concepts out there.

Even if they sound a bit complex right now, they all build on the basic things you’ve learned: sending crypto, owning crypto, and using blockchain for verification.

As you continue through the Pepper Academy, we’ll dive deeper into each of these topics.

For now, remember that crypto isn’t just digital money, it’s also a platform enabling new forms of finance, art, tech and organization.

e) What does the Future of Crypto look like?

Crypto is evolving fast, and what feels new today might soon become part of everyday life.

We are already seeing signs that crypto is becoming more user-friendly and widely accepted.

Governments and major companies are exploring how to use blockchain technology for things like faster international payments, voting, data security, supply chain management, etc.

Some countries are even working on their own digital currencies inspired by crypto(CBDCs).

However, unlike cryptocurrencies such as Bitcoin or Ethereum, which are built to be decentralized and free from central control, these government-backed digital currencies are fully controlled by central banks.

This means they are going against crypto’s original mission of putting power in the hands of the people instead of institutions.

This is possible because not all blockchains are decentralized. Some, like Bitcoin and Ethereum, are open systems that rely on hundreds of thousands of participants around the world to stay secure and fair. Others, like the ones used for CBDCs, are controlled by a single authority.

This growing interest, from open networks to centrally controlled ones and expanding use cases mean the line between crypto finance and traditional finance is starting to blur.

One important trend is the rise of stablecoins, which are digital currencies pegged to the value of traditional money like the US dollar.

They aim to bring the speed of crypto with the stability of cash, making them useful for daily purchases and sending money abroad.

Crypto is also appearing in other industries. In gaming, players can earn crypto or own digital items as NFTs.

On social media, creators can get paid directly in crypto.

New Web3 apps are giving users more control over their data, and decentralized finance offers financial tools without needing a bank.

As crypto regulations become clearer, more people and businesses may begin using it safely in daily life.

In short, crypto is shifting from a niche and speculative idea to a practical tool.

Today you might use it to split a dinner bill. Tomorrow you could be earning crypto in a game, voting in an online community, or using a decentralized app to get a loan without a bank.

The mass adoption of crypto and the growing use cases for blockchain technology mark the beginning of a new financial revolution.

What this industry could become in the next twenty years is still unknown, and that is exactly what makes it so exciting.

This space remains largely unexplored, full of untapped potential. The chance to be early, to help shape what comes next, and to take part in a new wave of innovation is a rare and powerful opportunity.

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