What Are Crypto Best Use Cases?

We've reached the exciting portion of the market when crypto assets have lost value equivalent to billions of dollars, and individuals are scurrying about trying to come up with reasons why it still has worth.

Many of these arguments are extremely cringeworthy efforts to replicate the new technology onto old paradigms in a masochistic form of skeuomorphism. This sort of skeuomorphism is something that would only be envisioned by marketers and influencers who have never invented the kind of technology they are LARPing as creators of. "Facebook could give everyone a META token, and you earn more of it when you get Likes, and you can cash it out for ETH and..." "Facebook could offer everyone a META token and earn more of it when you get Likes"

It's still early for crypto. An agonizingly early hour. If you have ever used any of the several kinds of apps that I discuss in this email, then you are aware that the user experience is often quite poor. Because of your carelessness, you run the risk of losing all of your money. If you choose a token at random, there is a far greater chance that it is a fraud or a shitcoin than that it is anything real. In addition, we are still five to 10 years away from anything even remotely approaching the general acceptance of anything other than HODL and speculative gaming.

However, this does not imply that there is nothing to be found there. It's possible that cryptocurrency and the blockchain technology it's based on may usher in a new era of the Internet; however, this is something that will take some time to come to fruition. In addition, to understand this potential, it is useful to examine some of the big paradigm changes that have occurred in technology in the past and determine what we can learn from them.

Let's begin with mobile, shall we? The rise of mobile technology made it possible for:

• A novel method of connecting with computers that takes place in the physical world (small touch screens)

• Using cameras, new ways to engage with computers using other senses, such as acoustic, kinetic, and visual.

• Mobility, in the sense that you were no longer chained to an office

We were able to generate an enormous quantity of innovation with just those three elements. An amount the outcome of which would have been difficult to guess if you had just that list to use as a place of departure. Uber need portable computing devices. Without the cameras, there would be no such thing as Snapchat or Instagram. Kinetic sensors were necessary for fitness app development. Both podcasts and audiobooks need portable laptops with sound capabilities. However, none of these applications is clear when looking at the fundamental collection of inventions.

The Internet makes things much less complicated. What exactly did it accomplish? You might summarize it on the most fundamental level by saying that computers can now communicate with one another. To make use of a procedure that is resident on a computer, it is not necessary for you to be physically in front of the computer. And all of this came about as a result of just one simple invention.

If you were there when they first started wiring computers together, and you said something like, "One day this simple innovation is going to let people make millions of dollars selling pictures of their feet to strangers," Al Gore would tell you to "please put on some shoes and get out of my office." However, this is exactly what the Internet accomplished!

Okay, let's move on to the next topic, which is crypto. Let's begin with the capabilities that blockchain, cryptocurrency, and web3 technology genuinely provide.

Once we have this information, we will be able to consider what it may enable us to do in the future, while keeping in mind that there will likely be many things on the same level as feet pics and Postmates that we will not be able to anticipate.

What Crypto Technology Actually Does

To continue with the idea of the utmost simplicity from the previous section, what is crypto technology enabling?

Blockchain technology underpins cryptocurrencies and the "Web3" concept as a whole. The other thing you can do with a blockchain is run decentralized apps perpetually.

They are considered eternal because to the fact that once the blockchain is operational, they will continue to operate indefinitely. In contrast to a Web2 application, you are not required to continue "hosting" the application in this scenario. In addition to this, they are decentralized since they operate in every location at the same time.

It is essential to emphasize that crypto is an invention on the backend, analogous to the very first Internet innovation. This is in stark contrast to mobile, which was an innovation on the user experience side of things. We are still in the early skeuomorphic phase of crypto application development, similar to how the initial online pages seemed to be a lot like pages from a newspaper or magazine when they were translated into a computer screen. The front end is still behind the back end in terms of progress.

There are other advantages to using blockchain technology, such as the legibility of activities and the possibility of access being democratized; nevertheless, these advantages are not the primary offering of the new technology. The repercussions and applications of it are those. The essence of the new technology may be summed up in permanently distributed apps. That was something that was previously beyond of our reach.

So, how exactly can we put it to use?

Current Uses of Perpetual Decentralized Applications (PDAs)

When it comes to cryptocurrency, I do my best to have a somewhat level head, but right now, at least 90 percent of it is complete bullshit. Maybe more like 95-99%.

However, certain practical use cases are being implemented right now that are pretty impressive and provide a valid argument for the utility of blockchain technology.

However, I feel it's important to point out that if you reside in the United States or another more developed nation, you could find some of them to be laughable. Consider what it's like to live in a country where there isn't a reliable banking system, where inflation is rampant, and/or where corruption is rampant, and then look at these benefits through that lens. I would encourage you to spend some time investigating what it's like to live in such a country.

Having said that, I suppose you don't have to think too hard about it since the United States has a respectable inflation rate and crooked politicians who are becoming wealthy off of insider knowledge.

Digital Gold

The first really revolutionary use of blockchain technology was Bitcoin. There was no method to establish a worldwide digital trustless hard monetary asset until the invention of blockchain technology.

Investing in gold via exchange-traded funds (ETFs) is possible if you are a resident of the United States or many other countries. However, you are still placing your faith on another organization to redeem that ETF, and the government or a bank has the ability to seize it or limit your access to it simply.

Everyone in the world has access to Bitcoin, thus anybody can purchase it. Since it is entirely digital, there is no need for you to keep it. It is a hard monetary asset because to the fixed supply limit, and it is trustless because the network is constructed in such a manner that you do not have to trust a third party to respect your bitcoin the way that you do in the ETF case (the whitepaper is worth reading to understand this).

Before the development of blockchain technology, it was not conceivable to produce anything on the same technical level as Bitcoin. On the other hand, this implementation of blockchain technology is also one of the most straightforward and straightforward. It's comparable to the layer of the internet that handles instant messaging. And it's rather dull. Who else outside your grandparents and that one guy you went to college with who purchased a 100-acre ranch in Texas to prepare for the entire collapse of society that is certainly going to come next year just you wait gets enthused about gold?

So, what else is happening in the here and now?

Digital Currency

Because people dislike spending their bitcoins and because there are costs associated with transactions, Satoshi's vision of a "peer-to-peer electronic currency system" is very unlikely to ever become a reality with bitcoin.

Stablecoins are offering a digital monetary system that is being provided by other blockchains, which is fortunate. Stablecoins such as USDC and Tether provide everybody in the globe a method to send and receive US Dollars, representing a significant advancement over the traditional banking system used in most parts of the world. Even in the United States, transferring $25,000 worth of USDC over a weekend makes wire transfers appear like prehistoric cave drawings.

It's true that you won't be able to get anything with your stablecoins in the real world (unless you use a Juno debit card). In the majority of locations, however, you will still be required to convert it into the local currency, which may come at a cost.

Even though it is still very early, the innovation in global digital money is pretty astounding. This is despite the fact that it is still very early.

Digital Ownership & “Property Rights”

Before the advent of permanent decentralized apps, there was no way to create anything on the internet and ensure that a particular person would "own" it forever.

ICANN retains the authority to revoke domain names. It is possible that Substack may terminate this blog's service. It's possible that your Twitter account may be deleted. It's possible that Instagram may delete some of your images.

You can only rent on the internet that was around before blockchain. You can own things in a manner arguably superior to Title rights in a developed country if you have code that can exist everywhere forever and does not need the help of a trustworthy third party. After all, the government continues to be your landlord for the property you occupy.

At the moment, the primary areas of interest for digital ownership are works of art, photos of monkeys, and ENS domains. On the other hand, if you looked at the Lightsaber app and the Beer-pouring app that were available for the iPhone in 2009 and concluded that "see, apps are all dumb!" you would have missed the point. It is thrilling that we now have digital property rights, even if we don't know what all will be done with them. However, the fact that we now have them is fairly exciting.

Decentralized Lending & Borrowing

I could get a loan for USDC against my ETH, move the money to my Juno bank account, and use it to purchase a vehicle within approximately five minutes.

My interest rate would be about 2% to 3%, I wouldn't have to sign any loan documents, I wouldn't have to go through any type of screening, no one would need to check my credit score, and the process would be completely hassle-free.

That is so fucking awesome it hurts. Because you can't use the object as security as you can with a vehicle or house loan, this method is inefficient to some degree. And sure, you will need a significant amount of cryptocurrency to make this method practical for expensive transactions. It still amazes me that I can get a substantial loan like that, transfer the money to my bank account, and use it to purchase stuff. That was something I could easily accomplish on my phone while I was in the toilet at the dealership.

Again, if you are affluent in the United States, you could be thinking something along the lines of "well, I can obtain a portfolio line of credit with my bank too; so what?" But keep in mind that most people do not live in the United States or other countries with developed financial markets. Also, keep in mind that the bank has the ability to confiscate the money, change the interest rate they charge you, and worry about your credit score; doing business with them would be considerably less convenient.

At this time, you can only use other cryptocurrencies as collateral; nevertheless, we are only in the beginning stages of development. Lightsaber duels and beer pong are on the agenda. MakerDAO is already hard at work on developing a system that would allow real-world assets to be used on-chain as collateral. Many teams are currently developing on-chain versions of public business equities. The number of assets that can be transferred or mirrored on-chain will increase, which means that the number of items that can be leveraged will also increase dramatically.

Single Sign-On

Single sign-on is something that Web2 businesses like Facebook and Google have been working on for years in an attempt to make it a standard feature. It was maybe five or six years ago when it first started to gain popularity, but as everyone understood that if they deleted their Facebook or Google account, they would lose access to everything, the trend began to decline in popularity.

But cryptocurrency programs are built from the ground up to support single sign-on since you often do not need to establish an account in order to use them; instead, you just link your wallet. It is a better method to have an account on a website without having to give them a means to spam you, but this is such a different experience that you will need to simply try it to grasp it. You will need to try it in order to understand it.

Other Decentralized Financial Activities

DEXes, Options trading, Perpetuals, and other financial tools and primitives are also being built as PDAs. However, this is fairly technical financial stuff and rather speculation heavy, so I'm going to leave it out because it is less appealing to the general interest in "why does crypto matter." The preceding content is more intriguing to consider.

In any case, isn't this a rather small list? Critics of cryptocurrency aren't entirely off base when they say that the technology is "useless," as this example demonstrates. Although it doesn't accomplish much at the moment, these few items do provide some insight into what may be in store for the future. Consequently, let's proceed to investigate that.

Future Uses and Benefits of PDAs

All of these build on the technology that was discussed before and the advantages that came with it. I'm only going to allow it to be used for things that either:

• Could not be accomplished without the use of blockchain technology

• Would be a lot worse if blockchain technology wasn't around (akin to Postmates on a phone vs. IBM mainframe)

A mishmash of ideas is shown below; feel free to add any more in the comments section.

Cashing Out Value Locked in Various Silos

One example of this is seen in the medium of video games, and I've written quite a bit about cryptogaming (and critically). However, any digital economy or ecosystem that already has some type of internal value may employ cryptocurrencies to make it possible to convert that value into other currencies. This is one area in which the power of decentralized exchanges that include permissionless token listings may be used to its full potential.

In addition to video games, this might also be implemented in the form of loyalty points for hotels, airlines, and other businesses, gift cards, or even coupons.

Subverting the Credit Card / Stripe Tax

Every firm that takes credit cards must ultimately fork out a tax of between 2 and 4 percentage points to Stripe or their credit card processor. You may not be aware of this subtle fact unless you have just established your own company.

Because this is the only method to take digital payments in your shop, whether online or offline, the payment processors can charge you this tax.

With the digital currency breakthrough, firms may start accepting digital payments without costs. When you consider that the profit margins of many organizations are less than 10%, gaining back 2% to 4% of what you spend is significant. Solana Pay already provides this feature, and it is quite probable that other tools of this kind will become available in the near future.

Streaming Payments & Paychecks

The ability to continually shift tiny sums of money using code is beginning to provide fascinating use cases. It is possible that the concept of receiving a paycheck every two weeks may soon become obsolete, and that individuals would instead have their salaries or hourly wages deposited into their bank accounts as they work.

This paves the way for many additional work settings, such as the ability to charge continually for consulting work rather than having to deal with invoicing before and after the job is completed. It also paves the way for genuine micropayments to be made for activities such as reading a blog, although I have serious doubts about the viability of such use case. I really doubt that it will ever become popular.

Transferable Status & Reputation

If you build a reputation on Twitter, it will be extremely challenging to transfer that reputation to other platforms such as Instagram or YouTube. Because they don't want you to take your audience elsewhere, most social networks will restrict the transmission of material that originates from other social networks.

Following addresses rather than accounts that are compartmentalized inside a single service is likely to become the focal point of social media in a Web3 future. This is because of the single-sign-on that was discussed before. Because you'll be following wallets, it won't make a difference where the users upload their content. You won't have a choice but to follow in their footsteps there.

You will probably be able to register your status in one area on your wallet, and then use that status to create a reputation in another domain, even if a reputation system is compartmentalized into several areas. Imagine, for the sake of argument, that you were able to demonstrate, while registering for StackOverflow, that you had accumulated 10,000 Reddit Karma for your contributions to the /r/Javascript subreddit. That ought to offer you some initial starting reputation, and doing so is considerably simpler with the wallet-based identities and single-sign-on that come with Web3 since they are integrated into the platform.

If you have a negative reputation in one location, it will be much simpler to penalize you in other locations if you use a centralized account. This is one of the drawbacks of having everything in one place. You can see ways in which this may be utilized maliciously, but on the other hand, it could be beneficial in the broad sense for filtering out bad people.

New Ways to Experience the Same Desires

The last kind of innovation I'll discuss is an overarching presumption that as our use of technology increases, we'll discover new ways to utilize it to solve problems and satisfy wants that have been there for a while.

The mobile industry ushered in new revenue generation opportunities, and the blockchain industry will likely do the same. It has already created a few of them, such as the sale of digital artwork and the democratization of access to ownership of shares in various forms of media, such as music.

The Internet and mobile devices gave rise to new media forms, and I feel that blockchain technology will also give rise to a novel form of media in the future. For instance, I can conceive of a considerably more feature-rich version of Wikipedia than what we are now capable of doing with Web2 rails.

Because the Internet and mobile devices brought us new communication technologies, we will likely develop a new kind of thing. Of course, this does not guarantee that the outcome will be favorable. Tinder is an app that makes chatting to people at a bar seem like a lot more awkward experience.

The Internet and mobile devices have given rise to new power accumulation and competition strategies. That is going to keep happening.

They developed fresh ideas for games and other forms of entertainment. We already have some of that, and there will be a significant increase in that coming.

They devised new methods of flexing and signaling their status. That is already present, and there will be additional instances of it in the future.

People are fundamentally straightforward animals. We like being entertained, mating, achieving prestige, and frantically searching for significance in our lives before we pass on. Every new tool is designed to achieve those goals in some novel manner, which may or may not be an improvement over the previously used methods. There is no evidence to suggest it won't happen again, which is particularly concerning given that money is to be earned.

However, it's still quite early in the day. Many of the applications are absurd, and many of the individuals who advocate for its usage are embarrassing.

The invention at its heart is a simple concept known as everlasting decentralized apps.

I can't wait to see what more we can do with it.

That's all for today, see ya tomorrow! If you want more, be sure to follow our Twitter (@croxroadnews)

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.