The Biggest Problem Cryptocurrency Solves That Nobody Talks About

It’s 2020. Bitcoin’s been around for eleven years. Ethereum’s almost six years old. Cardano’s still in the womb.

Over that time, cryptocurrency has given true believers enough evidence to claim it’s legit technology while giving mainstream thinkers ample opportunities to say it’s a scam.

Meanwhile, the vast majority of people care about only one thing: whether they should buy bitcoin.

Is it any wonder you feel like nobody “gets” crypto?

Listen and you will hear all you need to know

From late 2019 through early 2020, I published a series of articles reflecting on conversations we have with each other and people outside the cryptosphere.

As part of my research, I talked to people from all ends of the crypto spectrum—developers and project leaders, financial professionals and fund managers, writers and bloggers, researchers and academics.

From talking to these people about conversations they have with no-coiners, it struck me that two approaches work really good at engaging people:

• Talk about how crypto gets them what they want.
• Talk about how cryptocurrency solves their problems.

I guess people don’t really care about bitcoin, they care about themselves. So much for The Bitcoin Standard.

No blog post can tell you how bitcoin will get another person what they want. That’s going to change from person to person—you just need to listen and accept what people tell you.

For example, a technophobe may buy a little bitcoin as a gift to her grandchildren because she thinks it might be worth something one day. At the same time, a crypto-anarchist may want a stash of private money, with no intention of ever showing any kindness to his grandkids (or anybody else).

Different wants, different reasons. It’s hard to find common ground without really getting to know the other person.

The problems, though. That’s where we can find common ground. While we might not share the same wants, we do share many of the same problems.

What’s the biggest, most important problem cryptocurrency solves?

It’s a problem that affects every facet of our lives, but few people—even crypto peeps—realize it. They sense it. They feel it. But it’s not a conscious thought.

It’s a problem with money, but probably not the one you’re thinking about.

The problem with money

Whenever you use money, you need somebody to vouch for it.

You need some way for others to know your money is real, authentic, and worth what you say it is. You can’t just give somebody a piece of paper and expect them to accept it. They need some authority to guarantee its value.

Ideally, this authority would be competent, honest, fair, trustworthy, and free.

Usually, this authority charges fees, makes mistakes, defrauds you, lies to you, steals from you, colludes against you, takes your sensitive personal information, dilutes the value of your money, or arbitrarily changes the terms of your transaction.

Humans have found many solutions to this problem. For example, governments, settlement companies, clearinghouses, laws, courts, favors, accountants, signatures, and oaths.

All those solutions come with risks, costs, complexity, and the chance of human error. All can be corrupted. None can be scaled. It’s hard and expensive to create any uniformity or standardization of output.

Enter crypto

With cryptocurrency, you can establish authority without many of those risks and costs.

Tokens ensure everybody follows the same rules while the blockchain guarantees transactions will go through exactly as you intend.

As a result, you no longer need to rely on government decrees, local regulations, or the good faith of strangers. You can safely transact with millions of people who you have never met, with whom you have no relationship, who live in a country with different laws and regulations.

If you trust bitcoin, you don’t need to trust people.

Specific applications are endless. My book, Consensusland, presents a few and I’ll talk about some other examples in my next post, which will look at how we talk to no-coiners about cryptocurrency.

All solutions create new problems

Are there problems with cryptocurrency?

Yes, of course.

Most of the best-known cryptos suffer from problems with speed, scale, cost, user interface, practical applications, you name it. Other cryptos replace these downsides with some sort of central authority, which kinda defeats the purpose of a decentralized network.

Fortunately, “problems” do not usually keep people from using things. All technologies have problems, right?

Internal combustion is 150 years old and still sucks. Man-made electrical power is even older and causes all sorts of problems. Some say wireless technology causes cancer and destroys our society.

Even the wheel has its limitations.

People naturally understand this. Some will focus on the negatives, and that’s valid.

It’s also irrelevant. Technology succeeds because people find it useful, not because it’s flawless. As long as it offers some benefit over the status quo, people will give it a shot.

Only a revolution in hindsight

Every single bit of value on earth can be recorded on a blockchain and bought or sold at any time using cryptocurrencies like bitcoin.

Rat colonies in research labs. Patents and copyrights. Real estate. Hammers. Carbon emissions credits. Wireless data.

Assets we haven’t even created yet.

Thanks to cryptocurrency, you can now create marketplaces for everything—all $200 trillion to $1 quadrillion worth of “things” that exist. And you can do it from your laptop, at a global scale.

This has tremendous economic value and opens up a whole new world of solutions to financial and economic problems. It’s also really hard to conceptualize, even if you understand the technology. And it will take a very long time to happen.

Until then, we’ll just have to see how it goes.

While you wait, enjoy this Thames News feature on international electronic mail from 1984. Can you believe anybody thought that thing would work? I mean, why not just use the Telex?

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Mark Helfman is editor of Crypto is Easy and a top writer on Medium for cryptocurrency, finance, and bitcoin topics. His book, Consensusland, explores the social, cultural, legal, and business challenges of a country that runs on cryptocurrency. In a past life, he worked for U.S. House Speaker Nancy Pelosi.