Thread by @economiserly

As much as I love passive income, what gets me most excited about the crypto space is the economic opportunities it provides to those who were previously excluded.

Here are some reasons why you should be proud to be a part of the crypto movement:

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1/ First a bit of context. I’ve been fortunate to work in many places around the world.

I’ve seen first hand how access to finance, and financial inclusion deeply impacts people’s ability to put food on the table.

2/ Nobel prizes have even been given out to Muhammad Yunus, for addressing financial inclusion, and Amartya Sen for showing that access to economic facilities is fundamental to living standards.

Crypto has been able to address and accelerate all of this in a few different ways:

3/ Access to banking:

Many people around the world have been denied access to banking AND access to decent interest rates.

This could be because:

- they live far from a bank,
- they don’t have ID to open a bank account, or
- banks simply offer them negligible interest rates

4/ Now, with protocols like @terra_money and @anchor_protocol, you can set up a wallet with a few clicks, obtain #UST, and deposit your funds to get a steady ~19% interest rate.

No IDs required, no need to visit a bank, and a solid interest rate.

5/ Simplifying Foreign Exchange:

Many immigrants send remittances to their families at home.

Previously, this would require going through an intermediary like Western Union or Transferwise.

They charge large fees, offer bad exchange rates, and in many cases it can take days.

6/ With crypto, you can transfer stablecoins with a couple of clicks, and it arrives directly in the recipient’s wallet in minutes.

From a UX perspective - this is brilliant.

7/ Access to financial markets:

Most of the biggest companies in the world are listed on US stock exchanges.

If you were outside the US, it has historically been difficult to invest in these companies.

If you were outside of Western countries, it was pretty much impossible.

8/ Protocols like @mirror_protocol are making it possible for people to get exposure to blue chip tradfi companies no matter where they are in the world.

This is financial inclusion on steroids.

9/ Access to venture capital:

One way that the wealthiest people are able to make incredible returns is through making early stage investments in startups.

If you’re not in the top 1%, becoming a part of VC deals to invest in these companies early is almost impossible.

10/ Now, with crypto, every protocol offers its own token from the start.

Purchasing a token early is a way for average people to invest in protocols at the startup phase.

11/ And we hear so many stories in crypto of people who have created wealth by investing into (the right) protocols early.

IRL, these opportunities simply wouldn’t exist for us.

12/ Access to hedge funds:

Hedge funds take $$ from high net worth individuals, invest the money, and give profits back to the investors.

Previously, these opportunities simply wouldn’t exist for the average person - particularly if you lived in an emerging/developing market.

13/ Now, with the likes of Farming as a Service (#FaaS) protocols, these opportunities are open to anyone, and you can invest as little or as much as you’re comfortable with.

14/ Insulation against inflation:

We talk a lot about inflation in the US on CT (~7.5%), but countries like Afghanistan (40%) and Venezuela (686.4% in 2021), are suffering from it.

Crypto, through stablecoins, offers people an opportunity to protect their savings.

15/ Through crypto, it’s possible to transfer out of a domestic currency, and into a more stable currency - i.e. stablecoins - that is significantly less volatile.

This protects people’s life savings from turning to zero.

16/ Job creation:

Countries like Afghanistan, which is now under Taliban rule, are excluding women from the right to an education, as well as from economic opportunities.

This video is heart breaking:

17/ If people are forced to live under such conditions, perhaps Web 3.0 might present them with an opportunity to work from a laptop, get paid in stablecoins, and invest those stablecoins to generate income and wealth.

18/ Crypto could present one small step towards reclaiming the economic opportunities that have been stripped away from them.

It goes without saying, there would be much more that needs to be done to re-establish their freedoms.

19/ The problems:

Of course, crypto is still in its early stages, and there are still major barriers it faces in order to truly provide economic opportunities to everyone across the world.

Here are a few:

20/ Barrier 1: Centralised Exchanges

For the average person, if a CEX doesn’t support your country, it’s tough to get money in and out of crypto.

However, it’s not impossible:

cointelegraph.com/news/how-are-a…

21/ Barrier 2: Internet access

Clearly, if you can’t get steady access to the internet - it’s going to be impossible to engage with crypto.

However, innovations like #starlink are targeting this - aiming to eventually bring internet access to even the most remote places.

22/ Barrier 3: Access to a computer

Many people around the world don’t have a computer. But many do have access to smart phones.

Web 3 and crypto has so far prioritised the desktop user experience over mobile.

But this is slowly starting to change.

23/ As more protocols develop mobile-friendly platforms, this will only help to reduce barriers to adoption.

24/ Barrier 4: Financial literacy

This is a big one.

All of us in the crypto and DeFi space have learned (usually the hard way) about how to make investments.

We really need to discourage people from putting all of their limited savings in high-risk plays.

25/ If we don’t do this then DeFi could have the opposite effect of creating economic opportunities.

I’d love to see more initiatives targeting financial literacy - particularly initiatives that are in languages other than English.

26/ Anyway, I’m excited about the potential for the crypto space to radically transform the distribution of wealth and economic opportunities across the world.

The space is still green, there are many issues that need to be ironed out, but I’m proud to be here. You should be too

If you liked this, I’d appreciate if you re-tweet the first tweet in this thread.

And make sure you follow @economiserly where I examine the economics side of crypto and defi.

Sometimes it makes sense to take a step back and look at just what we’re able to achieve in crypto:

https://twitter.com/economiserly/status/1502148579753795597