It solves virtually no problems that warrant solving and is mostly useful for criminal activity.
If I were to steelman this, I’d say:
I don’t know of any problems that cryptocurrencies are used, that warrant solving.
To respond to that:
This is mostly the case in Western countries where fintechs and banks are well-funded and modern. As it were, there are billions of people who live in countries where stablecoins (a form of cryptocurrency) allow you to hold dollars instead of a rapidly inflating currency (USD inflation discussions set aside for the purpose of discussion).
You can go to Latin America, parts of Europe, parts of Asia, and parts of Africa that take stablecoins or cryptocurrency as payment.
Tether (USDT) was created in part as a response to a need for a ‘dollar’ asset that moved faster than banking rails, and in part in response to early crypto users’ desire to evade capital controls. Currently, Visa hosts a website tracking stablecoin values, and over $9 Trillion has moved across USDT (created off-shore, but one of the most profitable companies per employee in the world; currently one of the few funding energy initiatives in the global south), USDC (US-made stablecoin by Circle), and many others. Even if you discount USDT and assume it’s unbacked (feel free to ask an LLM or search “Tether is unbacked” to learn more), there are still trillions in backed stablecoins that move on crypto rails, because people want to move fiat currencies 24⁄7.
There’s an argument that because stablecoins aren’t volatile, that ought not be connoted as ‘cryptocurrency’, and that classing them as such only muddies the low-respectability of cryptocurrency. But stablecoins wouldn’t exist without cryptocurrency. The money stablecoin users in the global south saved from inflation-related loss contributes to their local economy more than if their spending power were inflated away; and transacting via stablecoins are cheaper and faster than using traditional banking rails for most people on the planet.
As for the volatile cryptocurrencies, they were an emergent product of ZIRP + fintech + reg-arb. The valuations were overinflated in part because of retail speculation, market inefficiencies, and lack of regulatory clarity. There are genuinely useful products that make the tools needed to manage one’s own finances accessible to people with less money, but respectability politics leads to more talk about volatile assets and less talk about access to personal finance tools as a wedge for dollarization for people earning wages in inflationary fiat currencies.
If I were to steelman this, I’d say:
To respond to that:
This is mostly the case in Western countries where fintechs and banks are well-funded and modern. As it were, there are billions of people who live in countries where stablecoins (a form of cryptocurrency) allow you to hold dollars instead of a rapidly inflating currency (USD inflation discussions set aside for the purpose of discussion).
You can go to Latin America, parts of Europe, parts of Asia, and parts of Africa that take stablecoins or cryptocurrency as payment.
Tether (USDT) was created in part as a response to a need for a ‘dollar’ asset that moved faster than banking rails, and in part in response to early crypto users’ desire to evade capital controls. Currently, Visa hosts a website tracking stablecoin values, and over $9 Trillion has moved across USDT (created off-shore, but one of the most profitable companies per employee in the world; currently one of the few funding energy initiatives in the global south), USDC (US-made stablecoin by Circle), and many others. Even if you discount USDT and assume it’s unbacked (feel free to ask an LLM or search “Tether is unbacked” to learn more), there are still trillions in backed stablecoins that move on crypto rails, because people want to move fiat currencies 24⁄7.
There’s an argument that because stablecoins aren’t volatile, that ought not be connoted as ‘cryptocurrency’, and that classing them as such only muddies the low-respectability of cryptocurrency. But stablecoins wouldn’t exist without cryptocurrency. The money stablecoin users in the global south saved from inflation-related loss contributes to their local economy more than if their spending power were inflated away; and transacting via stablecoins are cheaper and faster than using traditional banking rails for most people on the planet.
As for the volatile cryptocurrencies, they were an emergent product of ZIRP + fintech + reg-arb. The valuations were overinflated in part because of retail speculation, market inefficiencies, and lack of regulatory clarity. There are genuinely useful products that make the tools needed to manage one’s own finances accessible to people with less money, but respectability politics leads to more talk about volatile assets and less talk about access to personal finance tools as a wedge for dollarization for people earning wages in inflationary fiat currencies.
This was a very good explanation (the part about people in countries with unstable currencies). Thanks! Upvoted.
I did not understand your last paragraph, though.