Why bother with crypto?
Working with cryptocurrency and blockchain, there are a few conversations we are very used to having. Subjects that come up all the time with friends and family, who are curious and interested in what we do. One of those inevitable conversations that happen once people understand the basics of crypto, boils down to that question.
Why bother, indeed?
People have banks, right? They can transfer money and pay for stuff using their banking apps, and savings accounts are a thing that exists already. So what are the advantages? Why would anyone in their right mind go to the trouble of using an entirely new way of dealing with money? Isn’t crypto just a techy financial asset, instead of a new form of currency?
This brings to mind a story heard around our office, about one of our teammate’s grandfather. He used to talk about his co-workers’ reaction when he got his first color monitor for his work computer. They felt like it was a huge waste of money. Black and white monitors worked just fine, so why go to the trouble? When people are very used to the limitations of what they have, sometimes it’s hard to see the potential of a disruptive new way of doing things. It’s fair to say time has proven grandpa right. Now that we know color, we would never go back.
We’ll be telling our grandkids similar stories about crypto. With time, and with mass adoption, advantages will become more obvious. When you can use crypto to pay for your groceries and utilities bills, no one will ever ask that question again.
“I think the internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing but that will soon be developed, is a reliable e-cash.” — Professor Milton Friedman, a Nobel Prize winner in economics
But, in the meantime, there are already tremendous advantages, and they boil down to three key aspects. Crypto is quicker, it is safer, and it will save you money.
Crypto is quicker
The banking system has evolved very little in the last few decades. There has been change, but it has been mostly cosmetic. While it’s true that you can do most of your personal banking on a webpage or an app, the underlying processes are pretty much the same, and work in pretty much the same way.
Payments don’t happen immediately, for instance. With crypto, your payment is made as soon as you click or tap that button, but with traditional banking, this can take a while. Anyone who’s used to buying stuff online, especially stuff that is a little more expensive, will have noticed that it can take a couple of days for items to be shipped. This has nothing to do with merchants, who are interested in moving their product as soon as possible, and everything to do with the banks, for fraud and security reasons. With crypto, sellers get instant settlements. There’s no need to wait for banking approval.
Crypto is safer
But that’s just the start. Crypto is also safer than traditional banking, which relies on you providing your private financial information online. To buy online with a credit or debit card, you’re going to have to provide card numbers, account numbers, or other kinds of information that will land you in trouble if they end up in the wrong hands. With crypto, none of this is an issue. Safety is a built-in feature.
“[Bitcoin] is a remarkable cryptographic achievement… The ability to create something which is not duplicable in the digital world has enormous value (…) Lots of people will build businesses on top of that.” — Eric Schmidt, Former CEO of Google
Crypto will save you money
Crypto is quicker, and crypto is safer. But for most people, it all comes down to this: will crypto lose me money? And the answer is the exact opposite. Crypto will save you a lot of money. Chargebacks are a good example. Whilst originally chargebacks were meant as a well-intentioned means of consumer protection, they leave merchants in a very uncomfortable position. The fees and losses due to chargebacks are reflected in the prices merchants charge you, and with crypto, that just doesn’t exist, which means lower prices.
That’s just one advantage. There are many. With crypto, you can pay anyone, anywhere, with extremely low fees. The fees for crypto are lower than for fiat on pretty much any financial activity. There are several examples of this, but let’s talk about borders. Crypto is borderless. With fiat, you have to pay in a merchant’s respective currency. Foreign exchange rates (forex) simply don’t exist with crypto. Banks usually charge around 5% for this. It’s a big deal.
Bottom line is crypto is the future of payments. The technology will grow, and adoption will grow with it. The resistance in some sectors is natural. Blockbuster also resisted streaming, and the post office wasn’t too excited about email either. Payments have stayed stagnant throughout the digital revolution. Not only that, they got more expensive.
With time, that will change. And we’ll be here to make it happen.
