Vitalik – Four Reasons Why Crypto is Needed

In a recent online interview with Ethereum Founder Vitalik Buterin, he outlined four important reasons why we still need cryptocurrencies as we look past the FTX debacle. Most of these use cases center around sending assets or funds beyond borders, where the application shines. 

I) Sending Donations to Charities – Vitalik says that crypto is a better way to send donations. He says, “I personally have used cryptocurrency as money huge numbers of times over this year. For me, the use case basically is medium-scale investments and charity donations. Just sending $200,000 to some charity that’s giving money to poor people or supporting healthcare in Africa or somewhere like that. Just like quickly routing money to medical organizations that are based in all kinds of countries.”

II) Investing in Startups – Once again he hit on the international aspect of moving money around the globe: “These are all cases where cryptocurrency is actually significantly more efficient than the existing banking system. I don’t think that it’s temporary. I think that there’s structural reasons why cryptocurrency is better at surviving as a frictionless international thing than like fiat traditional banking systems do.”

III) A currency that can compete against the dollar – “From the point of view of a country government, having 10% of your national economy suddenly be carried out in cryptocurrency is much less scary than 10% of your economy suddenly being carried out in US dollars. Because in the second case. the US government has power over you. In the first case, it doesn’t. So there definitely is this structural aspect where because of its neutrality, cryptocurrency has an advantage that fiat currencies cannot have.”

IV) Currency for Developing Countries –  For people in developing countries, it’s an important currency for making cross-border transactions. ““You go to all kinds of places in Latin America, Africa, Middle East, Southeast Asia and those kinds of places, there the financial system is often not even well-connected to rich country financial systems. Often enough, cryptocurrency just is by far the easiest way to send money home to people’s families. Cryptocurrency, it can be even the easiest way to make payments. It could be the easiest way to save money that is much more guaranteed it’s not dropped by a factor of two every year for pretty much forever.”