When the total market cap of the entire crypto industry (which includes Bitcoin, Ethereum, and the rest of the Altcoins) broke $1 trillion, I became 100% convinced that crypto and blockchain projects with great products, first-mover advantage in the market, and fast-moving teams are here to say and will disrupt a lot of things including finance, games, and collectibles using NFTs, and identity.
The 2018 Bull Run peaked at $850 billion and the 2021 Bull Run peaked at $2.5 trillion. Just imagine how high the next run would be.
The 2018 Bull Run, in my opinion, was driven by hype such as the ICO craze.
While the 2021 Bull Run was mainly driven by fundamentals:
- Large financial institutions jumping in: Paypal, Mastercard, Visa, CashApp, MicroStrategy, Citibank, Tesla, JP Morgan. See Bitcoin Treasuries for more organizations.
- Countries such as El Salvador and Paraguay considered Bitcoin as legal tender.
- $150 billion locked in DeFi
- NFTs from NBA Top Shot, Twitter, Dolce Gabanna, Paris Hilton, etc. The $69 Million NFT by Beeple.
- Blockchain games such as Decentraland and Axie Infinity
Crypto is the Future of Money
I believe that fiat will be replaced by crypto.
However, the transition from one working system to another takes a lot of time and painful regulatory challenges.
Imagine the effort when companies were migrating from physical servers to cloud services. There was a ton of skepticism in the beginning. Today, being on the cloud is always the best way to operate.
Going back to crypto replacing fiat…
Bitcoin alone was bigger than Paypal, Mastercard, and Visa combined at one point. Ethereum is bigger than either Paypal, Mastercard, or Visa.
Fight Against Inflation
Inflation in the Philippines can go as high as 5% and banks are giving their customers 0.25% to 3%. Filipinos (or most people in the world) are losing money while saving.
DeFi protocols such as Aave, Compound, and Pancake Swap solve this problem by providing 2–3 digits Annual Percentage Yield (APY).
Too good to be true? How can they achieve this?
Everything runs on smart contracts. Fewer employees to pay, no establishments to rent, fewer operations costs.
Better Banking
Another problem in the Philippines is the requirements of opening a bank account eg. long forms, some still require you to go to the branch despite how inconvenient it is because of the pandemic, etc.
Also, bank customers need government IDs to get started and verified. How about the students who do freelance or student entrepreneurs? They have money to store too.
With the rise of DeFi, the use case of crypto became 100% validated. Just use a non-custodial wallet such as Metamask or TrustWallet, you can create an account without KYC and use any DeFi apps that run on Ethereum and Ethereum Virtual Machine (EVM) compatible chains such as Binance Smart Chain, Polygon, etc.
Digital Fiat Money vs Crypto
What’s wrong with fiat money?
- Corruption from governments and private organizations.
- The unlimited money printing that can be done in private weakens the value of the money.
- For digital money, it’s not tamper-proof and not hosted on a distributed ledger similar to a blockchain where it can be verified in a decentralized way. Not just the centralized entity.
- Fiat is not global. It’s usually just limited within the country: PHP to Philippines, USD to USA, SGD to Singapore, etc. Foreign exchange is super inconvenient.
- Fees are terrible especially in remittance services due to several middlemen.
Crypto solves all financial problems. Let’s push the fiat to crypto movement globally.
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