“It’s not stupid to think that cryptocurrencies can be of any use, but beyond stupid:“These are the words uttered by Charlie Munger, the right-hand man of Warren Buffet, over ninety billionaires and a brilliant investor. The interview then continues and is enriched with questionable colorful phrases, but the question remains: does crypto have a ghost world? is it any good? is it?

In one of the previous articles (Is DeFi just speculation or does it provide any real benefit?) we discussed the issue from a social benefit perspective. Today, we want to take a small step forward to clear up a huge misunderstanding that many, including experts and famous investors, fall into; because this technology is not only useful, but also extremely useful and it offers us unimaginable earning opportunities.

In the interview, Munger claims the centrality of national currencies and describes them as supporters of the prosperity achieved in the last hundred years with the development of monetary policy. All true. However, what seems more obscure is the understanding of what a cryptocurrency is.. It is clear that the interviewee likens the former to the latter, even if they have nothing in common.

National currencies are such that they are guaranteed by the state, which governs their outflow. However, their existence does not preclude the fact that alternative payment systems such as the exchange of physical objects, the use of precious metals, various types of assets and even loyalty points already exist today.

Choosing one payment method over another is only a fiduciary contract: in cases where this fails, the system tends to find an alternative solution. Indeed, national states gravitating towards more stable and stronger foreign currencies are not new: look at the example of Zimbabwe, which uses the Chinese currency, or the many states that still rely on the US dollar.

So why is there so much hatred towards cryptocurrencies?

The problem stems from ignorance in the literal sense of the word: although they are popularly called currency, nothing to do with national currencies. Cryptocurrencies can take various forms and have different uses that make them comparable:

1. To the membership card of the association where the members come together and decide collectively.
2. Shares of a company whose holding grants voting rights and participation in profits.
3. A safe haven, an asset that we believe can hold its value over time better than national valuations.
4. Loyalty points or various types of rewards.
5. To financial instruments that act as a guarantee and a facilitator.
6. To currencies within certain groups. Note that this concept is very different from the national currency, more like prepaid loan models. In other words, in order to benefit from a certain service, a certain number of “credits/points” must be purchased and these points must be spent within that ecosystem.

We repeat: Cryptocurrencies have nothing to do with national currencies, but are the result of the development of a technology capable of innovating – thanks to its unique properties – in a wide variety of industries. For more on the subject, I refer to this article (Decentralized Finance: Three reasons to start using DeFi and why you need to do it carefully) where we discuss the unique features of blockchain.

However, the concern cryptocurrencies can replace national currencies?

Nobody can tell. National currencies are not an imposition, A need that evolves over time depending on the technology and contexts it encounters.; Ask Zimbabwe if they plan to adopt Chinese currency initially. Confidence will determine what the currencies of the future will be, bearing in mind that national currencies are nothing more than a barter with no real value.

Cryptocurrencies are just the shining face of a technology, it is true, it was born with the idea of ​​being a means of payment but has evolved into a versatile solution that can generate value in many areas, including the decentralized world. finance that can offer new ways to earn more passive income than other apps.