22nd March 2024 > > Cryptos have no use case.

tl;dr

Cryptos have no use case.

As if.

Market Snap

Market Wrap

Four consecutive days of outflows from spot BTC ETFs and the price of BTC is virtually unchanged, with a bit of vol in the meantime. That is pretty impressive.

Occasional Series – Productivity

I read in The Times (one of our better-informed news outlets) that the Lower Thames Crossing required a 350,000-page planning application that cost the best part of £1bn of taxpayers’ money to write.

I would have done it for much less, but I didn’t get the gig.

You might be in support of the Lower Thames Crossing, or you might not be, or maybe like the vast majority of people in the UK, you simply don’t care. Whichever it is, that does not matter to me.

What we can surely agree on is that the current approach, deeply embedded in our planning system, is failing on all counts. The process of making these decisions is a waste of time, money, and opportunities, raising the cost of capital, and lowering productivity. This self-imposed bureaucracy is detrimental to the prosperity of us all.

There is a smarter way of doing things (hint: it’s called the blockchain).

Curious Cryptos’ Commentary – Cryptos have no use case part 2

If you are the sort of person who gets offended at the mention of a certain type of news organisation that doesn’t take the BBC line, then I suggest you stop reading. Right now.

If you are that person, I am just looking after you, I have your best interests at heart. I don’t want you to start shaking in the manner of the Durham student who unknowingly forms a key part of the CCC’s disclaimer below.

I repeat – the CCC is not a safe place for those who are not emotionally robust enough to debate on an intellectual level about subjects you may disagree with. We are proud of this fact, though current mores may differ.

Anyway, here goes. Last warning – if you cannot cope with Fox News, look away now:

https://www.foxbusiness.com/economy/dc-coffee-chain-debuts-crypto-payments-coinbase-partnership

…

There is undoubtedly a huge promotional element to this initiative. Customers can get 90% of the cost of their coffee at just 16 stores in Washington. It helps advertise to potential retail clients of Coinbase the existence of cryptos in the form of stablecoins.

But there is a much more important facet of this campaign that needs to be understood.

This coffee chain – in common with all retail outlets – pays processing fees on debit and credit cards of between 1.5% and 3.5%, and even more for those that are foolish enough to take American Express. But it gets worse than that – settlement is days later, significantly worse than having cash in the till.

The key thing for all business is managing cash flow – you can be profitable, but if you are not solvent, you are out of the game. When cashflow is delayed or interrupted, the negative productivity ripples caused by this inefficiency, an inefficiency that is jealously guarded by TradFi for its own benefit, make us all much poorer than we would otherwise be.

Using the blockchain, fees can be significantly less than a cent, and settlement can be virtually instantaneous. These coffee shops will pass on the benefits to its customers, to grow their customer base, which will make the business more successful for all stakeholders, including those on the minimum wage.

Other coffee shops – and all other retail outlets – will follow suit. Not tomorrow, not next week, maybe some next month, some a little after that, and almost all of them within two years.

That is crypto adoption in our daily lives. This is another key crypto use-case, however trivial it may sound to you.