Magical Internet Things

Not coffee.

Vitalik wrote this piece recently highlighted some struggles of using crypto to buy coffee. Wifi issues or fluctuations in gas prices made it difficult to use crypto for everyday transactions.

I mean, yeah, no shit.

If you remember my last mess of a post, I squeezed something in about how I hate the crypto and underbanked narrative.

Well it’s time to say that I hate the “crypto for everyday payments” thing too.

The stance was reaffirmed even more on my latest trip to Hong Kong. I went my with mother, and guess who brings out the heaviest coin purse at the last moment to bring to Hong Kong¹?

Because of course my mother’s been hoarding cents from previous trips. Of course.

So I, the designated coin purse mule, was heavily invested in divesting myself of the damn weight. Once we got off the plane, I went for the nearest possible booth to load the coins into Octopus cards.

Not only could the cards be used for transportation, but it acted as a debit card for everything. It helped that there was an Octopus card Point-of-Sale system everywhere, so just tap and go.

It was better than trying to pay with cash. And it was definitely better than trying to pay with crypto.

Let’s put aside all the complexities of getting licenses or physical infrastructure in place. At current network costs, there’s no reason to be paying extra just to use the crypto network for everyday things.

Paying extra? In this economy?

Seriously?

Here’s how I prefer to think about: existing systems are good enough for paying for coffee. What is the crypto system—slow, expensive, and highly prone to failure as it is—good for paying for?

First up: drugs.

Or really, any transaction that you want to hide. There’s already praise for crypto’s ability to enable privacy, so let me highlight the lack of checkpoints. As long as the transaction is technically correct by the rules of the chain, the transaction will be processed regardless of its intent.

And crypto's good at cross-border transactions too. I will die on the hill that remittance systems deserve their premium for physically ensuring last mile delivery.

But if you don't need cash, crypto offers better fees for a transfer in digital balances. Even if banks don't offer offramp support, there's always peer-to-peer. You just need to find a counterparty with an acceptable exchange rate, of course.

So take some good qualities from both, and we get to something I call “crypto-native commerce.”

Again, the idea isn’t to use crypto for existing goods. What’s more interesting to me is unique businesses only possible because of crypto—NFTs, crypto games, and who knows what else.

Because why settle for crypto simply being a method of exchange, to be shuffled back and forth?

Rather, what if crypto was the end destination?

There’s inherent qualities unique to the blockchain that makes it attractive for people’s ideas. There’s a global base of liquidity to tap into.

And again: there’s a lack of checkpoints. I think NFTs have really flourished because of this quality. An NFT could denote membership into a club, or ownership of a unique piece of art. It could be a receipt in exchange for something else.

You can start selling anything, really.

Games are another area of interest. With how much talent and capital has flocked to the idea, it’s hard to imagine that I won’t see a wholly alternate digital economy at some point.

Of course, that’s a pretty lofty goal with quite a bit of pitfalls. At the end of the day, there is inherent value for games to be able to run their own transactions, though.

To be blunt: yes, this is a farther extension of people coming to crypto for the money. Crypto is going to offer unique money-making opportunities, and people will put money into the system simply because there is no other alternative.

But to be soft: because how are tightly clenched fists ever supposed to catch anything?

And that’s what I’m trying to do, catching things.

I do lean heavily towards NFTs, but I’m open to being surprised!

Or maybe, I’m looking for people—people who know how to harness the best out of this rudimentary payments system to make something worth paying for.

Magic internet money, for magical internet things.

1. Fun fact: transportation was definitely the only place to use the cents. Most things were sold in round numbers.