9 Actual Use Cases of Crypto: Against "Line Goes Up"

There's this 2 hour and 20 minute video slamming the crypto space. It has millions upon millions of views. It's called "Line Goes Up - The Problem with NFTs."

But make no mistake, it's a two-hour warning that all of crypto is a Ponzi scheme scam. It claims that crypto is destroying the environment and ruining everything by over-tokenization. It claims that crypto fees are so exorbitant that it makes it impossible to use.

Obviously, it makes many, many more claims, almost of all which boil down to narrator saying "I've never heard of any cryptocurrency except BTC and ETH" without actually saying those words.

But the takeaway meme that it has produced is that cryptocurrencies have ZERO use cases. I've seen this everywhere. It seems every defender of the video eventually says, "Give me even one legitimate use of crypto and I'll be convinced, but no one has been able to do it in the past decade, which is how I know it's just a scam."

So here we are. I wanted to take the time to make my own list so that I could refer to it later. Some actual use cases of crypto that cannot be done better with centralized banking or organizations.

1. Instant, cheap transfers in universal currencies across the world.

Detractors claim that ETH fees make this impossible and BTC transfer times are slow. They claim bank transfers are reliable, fast, and cheaper than crypto (or at least will be in the next 20 years).

Except they aren't. International wire transfers are normally made using an international standard known as the SWIFT network. Transfers can take 5 days and up to five banks will charge fees totaling $50+ USD, not to mention currency conversion costs.

So, BTC is already faster/cheaper. But there are currencies like XLM which are essentially instant with a fraction of a penny transfer fee and also better for the environment.

Going through centralized banks will always take time and cost money. There will always be cryptocurrencies that are carbon-neutral, instant, and effectively free.

2. Donating to non-profits in censorship zones.

If there's one thing crypto detractors universally can't wrap there heads around, it's that centralized institutions control what you can do with your money. This can be good; this can be bad.

But it's pretty f-ed up that politics can decide things like who you can donate to. I think everyone, regardless of their political stance can agree on that.

Sometimes the country itself will be under strict censorship and won't allow outside money to come in. Sometimes an organization will get mislabeled as a terrorist organization by something like the Southern Poverty Law Center which will then prohibit a bank from allowing the transfer.

In any case, there are many times where censorship will prevent money from getting to organizations fighting that censorship, and by not having to go through centralized authorities, crypto lets you get that money to these good causes.

Because of laws (often in other countries decided by dictators) and because of preserving public image, centralized institutions will never achieve this.

3. Smart contract insurance payouts.

Insurance companies can screw over the little guy in two main ways. The first is to use intentionally vague wording in the contract, and then when you make a legitimate claim, they fight it. They have billions of dollars of lawyers on their side. You will lose that battle.

The other is delayed payout, again because of the bureaucracy and wording and on and on. Delayed payout can absolutely destroy a business (especially something like drought insurance for farming) that needs to replenish quickly after an emergency. That's the whole point of insurance!

Smart contract insurance makes sure neither of these happen. A third-party, like a neutral weather organization, is connected to the contract.

When the conditions are met (for example, a drought), there is no delay, no contesting it, no questions. The contract executes, and the little guy gets the money they are owed instantly.

If this doesn't convince someone of crypto's utility, nothing will. There is absolutely no way to get this same effect without blockchain smart contracts.

4. Digital ownership.

Look. Forget NFTs for a second. I don't want to get into that debate. There's a much more fundamental form of digital ownership that gets overlooked when talking about blockchain.

When you use Facebook or Twitter or any popular social media, you are an unpaid content creator for a mega-corporation. Those companies own the tweet you made or the Facebook post, and it gets worse: that's how they make money!

That's slave labor. Every person using these platforms is working for these companies without pay, contributing to their bottom line. They are stealing your labor and your attention (and even doing it in an addictive way so that you're giving your whole life to them).

These platforms already exist in a way where this isn't true: Steem, Hive, Leo, and on and on. When done on the blockchain, you own what you produce and you get paid for it. And you get paid for your time and attention. And you get rewarded for good behavior, which decreases the toxicity of the Web 2.0 versions.

How is this not a use case everyone can get behind? You can have the exact same social media platforms that already exist, except do it in a way that users own what they produce, and the users get paid what they earn instead of the mega-corporation stealing it from the user.

5. Collateralized loans.

If you have the collateral to back it up, you should get a loan. Period.

When I tried to get a mortgage, I was denied. My spouse and I have a very good income. We have insane credit scores (810 and 820 at the time). Our house was not a large percentage of our income. We were putting 20% down. We had never missed a payment on anything in our lives.

But due to a technicality, we were denied (they said I needed one more credit card and we would have been approved and that was it). We went to a sketchier loan company that approved us and then sold the exact loan to the exact bank who denied us the first time.

These loans take months to get approved with hundreds of pages of paperwork.

It's a nightmare.

I'm one of the few pro-crypto people that believe some of these regulations are good for centralized institutions. Approving mortgages to people who shouldn't have been approved is part of what caused 2008.

But if you have the collateral (clearly different than a house mortgage), then this process is too time-consuming and costly (lawyers get involved, fees, etc).

Crypto and DeFi lets you get your loan instantly with essentially no fee, as it should be when you have the collateral to back it up, because it's perfectly safe for both parties at that point.

There is no way for a centralized institution to do this because there will always need to be the legal system involved (again, this is the beauty of smart contracts: the auto-execution cuts out the need for enforcement costs).

6. A real savings account.

Inflation in the U.S. is 7%, 8%, maybe higher? If you find a really, really good bank savings account, you might get 0.5% interest.

It's always going to be this way. Your savings account will not actually be saving money. It will always be losing money, because your interest rate will always be lower than inflation.

Forget the crazy DeFi returns with high risk. Right now, crypto lets you put in USD stable coins (aka USD) to a savings account and get 10% interest.

Detractors are freaked out that crypto might "go to 0." Well, this is "real money" and it gives you a "real savings account" unlike any bank in existence.

7. NFTs in games.

Forget play-to-earn for a moment. Obviously, some companies are jumping on NFTs for more money even if it will hurt the game. Obviously, some P2E is exploitative and awful. Obviously, not every game needs NFTs. Obviously, some NFTs are nonsense, centralized, and not true ownership. Blah, blah, blah.

I want to give a clear example where NFTs in a game would be a good, undeniable improvement, and cannot be done without blockchain (making it an actual crypto use case).

I've played Magic: the Gathering since 1994. The current online client is called Magic: the Gathering Arena. It is well-documented to be one of the most exploitative "free to play" games to ever have been invented.

It's estimated that a new player would need to spend a few thousand dollars to get a reasonable deck in the Historic format.

And then this player would not even own anything!

If Wizards decided to shut down the client the next day, that money would be gone with nothing to show for it.

In a card game like this, NFTs are an undeniable improvement. First, you would actually own your cards. This means, you'd be able to buy the cards you need for your deck on an internal or external marketplace. Prices would be competitive and decks would cost much less.

I wish I could get this through people's heads. Companies cannot exploit players (like Wizards is doing right now) when their assets are NFTs, because independent markets would form to get fair prices.

When the cards are owned by the company on a centralized server, the company can do whatever they want (and it's truly obscene if you go look this up).

Because you own the cards, you could sell out at any time, getting basically all of your money back. If the company turns the game off, you still own the cards. Collectors would still have an interest, and though the prices would probably plummet, you wouldn't lose all value.

In fact, the increased scarcity could cause prices to increase.

It's all upside with zero downside. Seriously, what's the downside?

8. Voting.

Blockchain solves the real-world issue when we must trust centralized figures to do the right thing and not become corrupt. Any situation you can think of where corruption could be a problem, blockchain has a potential use case that cannot be solved any other way.

And my goodness there is a lot of corruption in the world!

The most obvious of these is voting. Vote counting is done in secret, and we all just trust there are no issues.

Blockchain voting would eliminate the need for this trust, because the counting could be done publicly on chain where everyone could verify simultaneously. We'd know the count is correct without trusting some official to tell us what happened.

The whole process becomes completely transparent with no possibility of corruption or lying.

I wrote a whole article on this, so I won't explain it in more detail here.

9. The Hard Left case for crypto.

I'm confused that most critiques of crypto come from the Left.

These are the people for labor unions to band together the working class and fight back against the un-earned power and money and greed of the CEOs.

These are the people trying to redistribute wealth to the working poor.

These are the people who think centralized organizations have too much money and power that come from legacies of enslavement and patriarchy and on and on. Break them up!

Get the power back to the underprivileged and disadvantaged who have been hurt by these systems.

Along comes technology whose founding purpose was to take power away from the legacy, centralized institutions and put it back into the hands of the little guy.

Crypto says: stop screwing me over with your terrible interest rates. Stop f-ing the poor or minorities by denying them legitimate loans. Stop harming the working class with insurance bureaucracy. Stop abusing the disadvantaged with exorbitant transfer and overdraft fees.

Crypto says: take the power from the systems filled with patriarchy and racism and put it back in the hands of the common person.

And the Left response to this technology is somehow: shut it down.

So use case 9 is that crypto realizes what the Left claims it wants in a way that no legacy institution will ever allow. Crypto is the most Leftist thing I've ever seen.

Conclusions

I was going to do 10 use cases, but why? If you can't find 30 use cases from these starting points, then you have an anti-crypto agenda that has nothing to do with the real world.

And yes, I know I didn't answer even 1 criticism presented in that video. But this does refute the general thesis of the video that crypto only exists as a scam by greedy rich people to get richer.

We're still early, and many, many more use cases will come up that we couldn't even dream about now. And many of the above use cases will get better, more efficient, fairer, and environmentally friendly (and to reiterate, every one of the above use cases have carbon-neutral chains doing them, so none are bad for the environment).