Thread by @dunkhippo33

Crypto-skeptics often ask what can you do with crypto that you can't actually do today?

Today's thread is all about that. My take is that if the @SF_SEC doesn't get more crypto-friendly, the US is going to drain innovation over the years.

Read on >>

1) Tyler had a great tweet that pokes at this:

https://twitter.com/tylertringas/status/1443576423000641537?s=20

2) To be fair, a lot of the killer use cases for crypto are currently illegal in the US as a whole or in parts of the US.

But they shouldn't be. In fact, some of the killer use cases would really democratize wealth in this country.

Let's dig in.

3) For ex: crypto can disrupt the 99 slot rule! My favorite rule to harp on. No one has yet to give me a good answer on why this rule even exists.

Simply put, VC funds are only allowed 99 investors per fund. This means you can't raise a big fund w/out big investors.

4) You can sorta try getting more slots w/ crowdfunding. In fact, @Backstage_Cap & @calmfund both ran crowdfunding campaigns and knocked them out of the park raising millions in days!

Clearly many ppl wanted to invest when traditional uptake with institutions was not as fast.

5) That clearly demonstrated that lack of diversity at institutional levels are not interested in innovative ideas BUT "normal people" are!

However, those campaigns were NOT for the funds of Backstage or Calm. They were for the operating cos. That $$ cannot be used for investing

6) In fact, it is illegal today to raise an actual fund via crowdfunding. You can only crowdfund today for an operating company. Why is that? That doesn't make sense at all.

7) In contrast, we see this solved with major crypto projects having thousands of investors. And many of those projects use the money to invest in new projects (e.g. basically a VC fund).

This a classic example of what you can do with crypto but NOT in the fiat-world.

8) Here's another good example: If you're a founder, you can't just willy-nilly increase or decrease your stock price. That is illegal too.

In many ways, that's understandable. But in other ways, that doesn't make sense either.

9) For example, let's say investor A wants to invest. And investor A is "dumb money". And you sell your shares for $2/share.

Let's say investor B wants to invest. Investor B is your largest customer. So you REALLY WANT investor B. But B won't do $2/share.

10) You as the founder now have a choice, because in today's non-crypto world, it would be non-trivial to sell your shares to them for $0.30/share. So you decline investor B.

In the crypto world, token prices go up and down all the time. It's a free market. This is solved!

11) Another good use case for crypto is remittances & international business. In this digital world that we live in, why is it so hard to send $$ from one place to another?

The reason: governments are afraid of money laundering AND cash flow out of the USD.

12) But if anything, history has shown us that more money movement actually improves economies and livelihoods as a whole, and this is shortsighted.

You can just build in better tools to detect money laundering.

13) If you are a crypto co & have customers in NY, they will crack down. This is why many crypto cos do not allow customers from NY.

NY is worried about ppl disrupting old financial institutions. We should be more worried those instit are not good enough for our modern economy.

14) For example, why can't you do a bank wire at midnight? There is no one at the bank to manually process it.

In fact, do you know what actually happens when you wire $$? Every transaction has to be manually processed (!!?!)

15) I learned this the hard way when I once wired a portfolio co my investment. It took weeks to track it down. Meanwhile, the founder must've thought I never sent it & I was sweating that somehow our capital was lost.

The bank simply hadn't gotten around to processing it yet!

16) Folks, this is 2021.

And yet, I talk with my bank *every week* about wires. This is wasted time that our traditional financial institutions can't change.

One reason crypto is moving at a hurrying pace is that people CAN send their money *any* time of the day.

17) And the list goes on and on.

As you can see, yes, skeptics are right that most of these crypto use cases are illegal today. But the point is that they shouldn't be.

Crypto is simply programmable money -- that's it.

We are stifling innovation and keeping ppl out.

18) If history is any indication, you can't stop progress and innovation. If the US doesn't want a piece of it, ppl will just move their entities to Singapore that readily welcomes crypto.

(And this is already happening. The US is already losing here.)

19) I think Singapore will be the largest crypto hub in the coming years.

And, ironically, it will be *Singapore* that will help democratize wealth and access *for Americans*.