What problems are crypto-currencies actually solving?

One question.. does all this blockchain and crypto talk have you lost in the weeds?

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Follow me..

And follow closely.

Imagine you're at an intersection.

It's where life and money come together.

It's kinda hard to move around because the friction at every turn.

Taxes, tolls, and fees are at every corner too.

It's difficult to use your own money.

The banks built out an empire while the cypherpunks built protocols.

Both are amazing too.

But each and every one of us has different needs.

Let's explore some various uses that people like you and I have to deal with..

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• Problem 1: Government-controlled currency

“In my country it is illegal and very difficult to send money”

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• Problem 2: Transaction fees and cross-border transacting

“In my country it is expensive and hard to send money around to our different families and nearby communities.”

“For my international commerce company, we pay crazy fees with slim payment transparency, plus unexpected delays w/out cause”

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• Problem 3: Supply chain inefficiencies and transparency

“I like my coffee to be sourced from fair trade markets and to also know the specific location and farm of where it was grown and roasted. With a crypto app on my phone, I just scan the barcode.”

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• Problem 4: Financial intermediaries

“I needed a loan to rebuild a structure on my property, but banks are so time consuming (2 - 5 days) and need way too much of my personal info for just a few thousand dollars($5,000 loan). With DeFi I got an easy loan, in minutes, and went straight to the store.”

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• Problem 5: File storage and computer bandwidth

“I wish my gaming equipment made me money when it’s not being used and without me doing much of any work."

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• Problem 6: Ownership rights

“My friends in America don’t understand that no one ‘owns’ the land where I come from. It’s just that our family has been on it for generations, but there is no legal paperwork. It could be overtaken from us.”

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• Problem 7: Gaming

“Na, I actually quit gaming cause I was putting too much time into it. Now though, when I build up attributes for a character it’s actually worth real cash.

- so the better I do, the more I can make.

- its a whole new strategy to gaming”

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     - Cryptocurrencies aren’t just hype - 

Riddled throughout the economy are middlemen who do nothing more than increase costs to consumers, and create inefficient processes. 

Additionally, through these decentralized technologies..

Censorship and control has been taken out of the hands of the wealthy and powerful, and put back into the hands of the public..

Shall we go deeper..?

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Problem #1: Government-controlled currency

The idea of government-controlled currency isn’t bad.

It just presents many problems that are arising in today’s world. 

For one, governments who control currency control its issuance and monetary policy, without any input from the public. 

This has been especially the case over the past year as the US government continued to print excessive amounts of money to prop up its economy amid the coronavirus pandemic. 

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What’s The Solution:   Digital currency backed by blockchain technology and open-source code can solve the inherent problems with government-controlled currencies. 

These currencies are not controlled by any authority, and their laws and rules are only decided upon by the majority of the network. 

Issuance and monetary policy are easily verifiable, and all transactions on the network can be viewed, eliminating any secrecy in any monetary policy decisions. 

It’s currency by the people, for the people.

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Here’s A Few Examples We've Explored:

• Bitcoin - Check it out, here
• Litecoin Here
• Decred Here

Problem #2: Transaction fees and cross-border transacting

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Currently, sending money across borders comes with significant fees. 

This is especially true for bank transfers which use the SWIFT network, where transactions take days to settle. 

In a world which is becoming more globalized by the day, consumers and businesses should be able to easily send and receive funds from anyone, anywhere around the world.

Without these inefficiencies.

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What’s The Solution:   The SWIFT network uses banks and financial intermediaries to verify transaction information with one another. But what if decentralized networks were created to do the same in a more efficient, effective way? 

A public ledger allows transactions to be verified by anyone. At the same time a distributed network of nodes processes transaction information to ensure correctness. 

This can all happen at a fraction of the cost than traditional payment processing and transacting.

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Here’s A Few Examples We've Explored:

• XRP Here
• Stellar Here
• Nano Here

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Problem #3: Supply chain inefficiencies and transparency

These days consumers want to know where their products come from.

And that they are sourced from reputable manufacturers who treat their employees and the environment with care. 

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At the same time, supply chains hit bottlenecks due to a lack of information about what is going on in real-time. 

Traditionally, data systems do not integrate up and down the supply chain, and instead, information is bifurcated across each area of the chain. 

This creates data inefficiencies and doesn’t allow manufacturers, suppliers, logistics companies, and retailers to communicate effectively.

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What’s The Solution:   Blockchain-based solutions can allow data to be stored on distributed ledgers for everyone throughout the supply chain to see in real time. 

This data can range from location-based data, temperature, handling, etc. all of which are important in managing the supply chain. 

Consumers can also rest assured that their products are authentic and come from reliable sources by scanning QR or other unique identifiers on their product which display the product’s information and authenticity quickly and easily. 

This will not only provide consumers with a better experience, but reduce the risk of counterfeit products as well.

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Here’s A Few Examples We've Explored:

• Ethereum 
• VeChain
• OriginTrail

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Problem #4: Financial intermediaries

Many of the planet’s most wealthy people are bankers and those firmly entrenched in financial institutions.

Why is this? 

Because financial intermediaries profit handsomely from moving money around and creating markets for investors. 

Yet, these intermediaries really don’t do much that can’t be done by anyone else if given the chance. 

They also charge significant fees and are centralized so that only a few, large and powerful institutions profit from global financial transactions.

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What’s The Solution:   Utilizing smart contracts, decentralized protocols allow anyone to become the bank. To provide liquidity and market-making abilities to other protocol users. 

This creates a market where financial intermediaries are no longer needed, as users act in a new, peer-to-peer financial system. 

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Here’s A Few Examples: 

• Balancer
• Compound
• Aave has created a ton of buzz, we covered it here.

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Problem #5: File storage and computer bandwidth

Storing digital files requires significant memory and space.

Especially at large scales. 

While digital storage on the cloud has offloaded this process onto big corporations, these entities must create server farms in order to handle all of the data storage requests. 

These farms are inefficient and energy-intensive to run. 

There is also the issue of security. 

Storing data in the cloud means giving over sensitive data to centralized parties, who could be using the stored data for their own purposes, or, are at risk of getting hacked and releasing the data unintentionally.

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What’s The Solution:   Decentralized storage solutions create a peer-to-peer network of nodes that provide storage space for other users. This means, there is no need to create additional storage space with new devices. 

Instead, users can offer their unused storage space to other people who join and get paid for it. 

Files are broken down into small pieces and distributed throughout the network so that there is no centralized location for hackers to attack. 

Kinda like how your buddy used to download all those movies to 'burn' a dvd, using a torrent.

But differently, now you can get paid to let the ‘backend’ of that file sharing service run on your extra hardware, in the background. 

This keeps stored data safe and secure.

You don’t know it’s happening.

Files get shared.

You get paid.

Simple.

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Here’s A Few Examples: 

• Filecoin
• Storj got covered as part of the larger topic deep dive.
• Sia

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Problem #6: Ownership rights

Proving ownership is not as easy as it sounds. 

Everyday there are arguments as to ownership rights

• media, land, intellectual property, and more. 

But proving ownership can be difficult because documents can be forged and there is no agreed upon standard for verifying rights today. 

Additionally, the process of arguing ownership requires the use of the legal system to carry out judgements on ownership and hand down decisions. 

This is a timely and cost-intensive process which results in many ownership rights cases being handled poorly.

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What’s The Solution:   The blockchain presents a perfect solution to this problem, thanks to the technological innovations of timestamping and digital signatures. 

Ownership of anything can be put directly on the blockchain, signed by two parties, timestamped, and included directly into a block on the network. 

This transaction is irreversible, and therefore, irrefutable. 

Anyone can view the ownership data, and it would never be in question. 

For instance, if I purchase the rights to a patent from someone else, we can conduct the transaction on a blockchain network and once complete, I can always reference the transaction to prove my ownership of the patent. 

This has the potential to eliminate thousands of ownership disputes in a wide variety of industries.

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Here’s A Few Examples We've Explored:

• Any major smart contract platform (Ethereum, Cardano, Solana, MATIC, etc.)
• Dubai blockchain-based business registry
• Bernstein - Blockchain-backed intellectual property certificates

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Problem #7: Gaming is huger than you think

The digital gaming industry is growing rapidly.

Within it, wild new economies are thriving. 

Yet, this industry is still inefficient and controlled by game developers and technology companies. 

In-game purchases have become the norm in the industry, yet they are still difficult and expensive. 

At the same time, these in-game purchases don’t retain their value for users, and can’t be sold on a secondary market.

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What’s The Solution:   By opening the gaming world in a decentralized fashion, the entire industry is improved. 

For one, games can be developed within digital landscapes by anyone, not just powerful gaming companies. 

This allows gamers to create and distribute their own games and ideas while receiving a return for their work. 

Blockchain technology also opens the door for buying, selling, and trading in-game purchases, something that previously was unavailable to users. 

Lastly, gamer profiles can be stored on the blockchain and therefore become interoperable between games. 

Gamers get a more universal user experience across games and platforms, making it seamless to switch between games or even transfer digital assets between games as well.

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Here’s A Few Examples We've Explored:

• Algo Here.
• Dapper Labs (creators of the Flow blockchain) Wanna dive deep? Here.
• Decentraland
• The Sandbox - Much like Minecraft, read more here.

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Cryptocurrencies aren’t hype, only their market caps are.

As you can see, blockchain technology isn’t just about making millions of dollars as prices rise. 

This technology is able to solve many real world problems, from financial intermediaries to ownership rights and gaming. 

Even further, while these are the problems cryptocurrencies and blockchain are solving today, who knows what other problems might be solved by this technology in the future. 

Over the next decade it will be interesting to watch where this technology is deployed, and how it can solve some of the most pressing problems for global society.

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‍P.s.. Reading the original bitcoin emails is a great way to actually see how far we've come in Bitcoin and crypto.

What Satoshi had to say was years ahead of his time, and he knew it. Check it.

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Next Article: 5 Crypto Ecosystems Flying Under The Radar

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