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What is crypto good for, anyway?
By Brian Armstrong / Company, March 19, 2024

Pundits frequently state that crypto doesn't have any real utility, beyond speculation and illicit activity. Yet over 50 million Americans and 400 million people globally have purchased crypto, and the best data we have from third parties says illicit activity accounts for less than 0.5% of transaction volume. So what exactly are all these people doing with it?

It's true that many are initially attracted to cryptocurrencies as an investment, and speculation has caused many to rush in. But what is the underlying idea that is driving the interest?

In the early 1970s the US (like many countries before) removed any link between the dollar and a hard commodity like gold. For over 50 years, a familiar pattern that we’ve seen throughout history has played out in the US: the government spends more than it earns because it can print money for “free”, and years or decades later, people pay the price through high inflation and stagnation.

The average person may not understand the nuances of quantitative easing and federal budget deficits, but they do notice rising prices of gas, food, and education, and they increasingly have a sense that something is amiss in our economy. In fact, 87% of Americans feel the current financial system needs an update. More than half of younger Americans use the system just sometimes or not at all.

This brings us to the first, and arguably most important, use case for cryptocurrency, which is that a cryptocurrency like bitcoin, is a return to sound money. Like gold, bitcoin is not a national currency backed by a single government. Inflation is a regressive tax in America and abroad, harming the poorest people in society the most. Bitcoin is hard money with a fixed supply, and is a solution to this problem. If inventing digitally native sound money were the only utility of crypto, it would still be a world changing technology, but that is just the start.

For the last 5+ years, the crypto industry has been hard at work building the infrastructure to update our financial system and expand the utility of crypto. The use cases are no longer future promises; they are here today. Here are a few of the most popular examples:

* Digitizing the dollar. Despite high demand for the dollar in many regions around the world, many can't open USD bank accounts, until the adoption of dollar backed "stablecoins", which now exceeds $100 billion. A digital dollar, like USDC, is essential for our global competition with China, which began investing in a digital Yuan in 2019.

* Fast, cheap, global payments. Merchants still lose about 2% on every credit card transaction, wire transfers cost $30, and many transactions in the U.S. still take days to clear. As blockchains have scaled using "Layer 2" solutions, you can now send USDC in one second, anywhere in the world, for about one cent. Dollar backed stablecoins transactions are approaching $9 trillion in annual volume (more than Mastercard, American Express, and Discover combined).

* A Business Model For Creatives. NFTs have reached over $62 billion in all time sales, and are allowing artists to have direct relationships with their fans, cutting out expensive middlemen. Whether for music, games, visual art, or video, crypto helps establish digital provenance to ensure artists get paid.

* Decentralized social media. While still early, decentralized social (or DeSo) ensures you own our own data, instead of it being controlled by big tech, and you can never be censored. Each post is digitally signed, proving who the original author is, to help combat fake content made possible with AI. Anyone can build a front end interface, using the same shared data set of all social media posts.

Crypto isn’t just a new asset class – it’s the future of money. Today’s system is clogged with middlemen, high fees, delays, and other inefficiencies that make the system hard to access and unfair.

The future of money is more open, free, efficient, and it’s powered by crypto. Crypto is the most important technology we have to update our global financial system, and it can move America forward. In fact, it's critical to ensuring the dollar's future status as a reserve currency, and America's status as a technology and financial hub.

Embracing crypto, and creating clear regulatory rules for crypto is the most patriotic thing Americans can do. If you're a crypto holder in the U.S., consider joining StandWithCrypto.org to help ensure pro-crypto candidates get elected in upcoming elections. If you're a policymaker, help drive regulatory clarity in the U.S. which protects consumers and fosters innovation. You can support bipartisan legislation like the Clarity for Payment Stablecoins Act, the Financial Innovation and Technology for the 21st Century Act, and the Responsible Financial Innovation Act. Crypto needs fit-for-purpose rules, and the time to act is now.

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