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"Cryptocurrencies are useless": 10 examples that prove the opposite

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"Cryptocurrencies are useless": 10 examples that prove the opposite

A few days ago, the chairwoman of the Autorité des marchés financiers (AMF), Marie-Anne Barbat-Layani, explained at a conference that cryptocurrencies still had to prove their social and economic usefulness. Here are just 10 examples.

👉 Financial inclusion: one of the main benefits of cryptocurrencies is that they give the unbanked access to basic financial services, such as a kind of bank account via blockchain.

While the vast majority of Europeans have access to basic services, this is not the case in other parts of the world. In some countries, such as Nigeria, less than half of adults have access to a bank account, partly because the costs are too high.

The consequence of this is a major slowdown in economic activity. In some countries, cryptocurrencies are widely used, particularly by entrepreneurs, to make and receive payments via digital wallets on the blockchain without going through the traditional banking system 🏦.

👉 An asset class: in just a few years, cryptocurrencies have established themselves as just another financial investment.

Certainly, some cryptocurrencies have seen sharp falls 📉 but others are still rising sharply, especially over the long term; this is particularly true of bitcoin and ether.

👉 Micro-transactions: cryptocurrencies facilitate payments for small amounts, which creates business opportunities in sectors such as media, video games or content platforms, where micro-transactions are not available due to costs. Accepting a transaction for less than a euro can become unprofitable because you have to pay all the intermediaries...

Thanks to blockchain's low fees, media and video game players can look more at low-cost single items or services.

👉 Cross-border payments: cryptocurrencies significantly reduce the costs of transferring money internationally, whether for individuals or businesses (read our feature). How? Thanks to the blockchain. Cryptocurrencies don't need intermediaries to be exchanged. They are directly available via a blockchain.

One of the best examples is the worker in Europe who sends money to Africa or Asia, and has to pay between 8% and 20% in fees using intermediaries like Western Union or traditional bank transfers. With cryptos, these fees are virtually zero and the transfer takes just a few minutes 💡.

👉 Automating tasks: one of the special features of cryptocurrencies is that they allow smart contracts to work. Smart contracts? 🤯

"Smart contracts" are automated programmes on the blockchain. Thanks to smart contracts, it is possible to automate operations such as making a payment on delivery or sending a document on receipt of another...

👉 Reducing financial fraud: cryptocurrencies are based on blockchain, which are immutable and unforgeable registers. The direct consequence is that they make fraudulent transactions virtually impossible.

Whether it's terrorism, as we saw with Hamas (read our article) or financial fraud, cryptocurrencies make it possible to keep precise track of transactions. Fraudsters therefore have a sword of Damocles constantly hanging over their heads.

👉 Humanitarian aid and donations: the cryptocurrencies are used to channel humanitarian donations transparently. Donors can track the use of their donations on the blockchain, ensuring that the money reaches its intended destination without being diverted by middlemen or high fees in the process.

👉 Supply chains: the blockchain improves product traceability throughout the supply chain, reducing costs associated with counterfeiting, delivery errors and logistics management. This translates into substantial savings for businesses and more competitive prices for consumers 🙋‍♂️🙋🏽‍♀️.

👉 Inflation protection: in economies with high inflation, i.e. with a currency whose value is depreciating, cryptocurrencies offer a kind of safe haven since they are not managed by the state.

The phenomenon is particularly significant in regions of the world such as South America or Africa, where inflation can exceed 100% on an annual basis.

👉 Privacy protection: while there is no perfect system for protecting anonymity, cryptocurrencies remain a particularly effective tool for exchanging information without revealing one's identity (read Chelsea Manning's interview).

This is the case for financial transactions, but also for private information or then relating to health and education, areas where confidentiality is crucial.

As you will have realised, cryptocurrencies offer quite a few economic and social benefits by reducing costs, improving the efficiency of existing systems and offering new business opportunities.

It should also be noted, of course, that these economic benefits are not absolute. As you know, cryptocurrencies are still (too?) volatile and using them requires mastering quite a few things like a digital wallet 😅.

🗣️ Don't hesitate if you have other uses for cryptocurrencies, I'm still available by email: rbloch@thebigwhale.io

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