In particular, I have focused on solving the problems with our current money system that can only happen with cryptocurrencies. I hope you will enjoy and learn.
1. Inflation (aka Currency Depreciation)
A fundamental problem with fiat currencies is that governments and central banks can manipulate interest rates and issue bonds (debt) to easily increase the circulating money supply of any currency. This tends to temporarily inject liquidity into the market, but the additional supply dilutes the purchasing power of anyone holding that coin.
Unlike fiat currencies, cryptocurrencies offer the ability to have a fixed generation schedule and hard-capped maximum supply. The top two cryptocurrencies, Bitcoin and Decred, have a maximum supply cap of 21 million. A currency with a fixed supply that cannot be diluted is a disruptive innovation that is simply not possible with fiat currencies.
2. Foreign exchange fees
Imagine if each retail store had its own currency and to use that currency in the store next door, you had to lose 30% of the value. On a macro level, this is similar to what happens with fiat currencies.
Central bank-issued coins are artificially bound by geographical borders. Cryptocurrencies, on the other hand, have no borders. Next time you're charged a currency conversion fee or find yourself with worthless foreign exchange change, remember we have a better alternative now.
3. Ineffective payment transfer
Fiat money is not efficient to move. As a result, we have to rely on various intermediaries, each sharing the profits to transfer funds to the next recipient. Very time consuming and costly.
Unlike fiat currencies, digital currencies have a built-in settlement and settlement network. You can directly send hundreds of millions of dollars to someone around the world in Bitcoin in minutes, for the price of a coffee.
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4. Limited divisibility and incompatibility with micropayments (future use case)
What is the smallest unit of a dollar? Under current banknotes and coins, the answer would be $0.01, even mathematically though the number could be smaller. These are artificial constraints.
Unlike fiat currency, bitcoin can be divided into one hundred million units (0.00000001 BTC, also known as Sat). The use of micropayments is far from obvious these days, but there are signs growing with IoT where smart machines will transact with each other.
5. Threats of Confiscation and Privacy of Property Rights
For many parts of the world, the risk of your savings being taken over is a real concern. Much of the world's population (4 billion people) still lives under autocracies where property can be confiscated.
For the wealthy, this has grown the offshore banking industry, which is worth more than $30 trillion. Today most of the world has no access to offshore banking, and you could argue that the real global value of an immutable store of value should actually be higher. Cryptocurrencies provide a store of value that is resistant to non-sovereign censorship, which is not possible with fiat currencies.
6. Financially inclusive global without banks
Although we despise access to bank accounts, more than 2 billion people around the world still do not have a bank account. Infrastructure and paperwork requirements prevent large numbers of people from participating in global trade.
An example of a huge opportunity for unbanked banking is the case of girls in Afghanistan using their phones to get paid in bitcoin without having to ask a male co-worker to accompany them to the bank. ensure safety. Cryptocurrencies provide a minimal way to store and move value without a custodian like never before.
Inference
Most people are interested in cryptocurrency for the first time because it can make you rich. I have purposely stayed away from any discussion or prediction of prices, because price is a function of demand, and demand is created and maintained by value. And cryptocurrencies provide today's value propositions that can't be matched.
