What is crypto good for besides investing?

5 min readJun 17, 2022

With the current state of the crypto market, it can be easy to assume that there is no reason to use your crypto wallet right now. This episode explores some of the other ways you can use crypto, beyond making money. It also includes practical examples that we’ve covered in previous episodes.

I can’t lie to you, the past few months have been tough on the crypto-verse.

I’ve just come back from some much-needed time off and honestly, I had a great time. I spent the entire time with some of my best friends eating some of the best (and worst) food we’ve ever had, making new friends and doing absolutely nothing of value. But even amid all the fun and under all the laughter, the current state of the crypto market was weighing on my mind.

I did my best to stay away from the news but my social media was littered with people freaking out about all their investments — both crypto and traditional financial assets — and how the current dip is affecting their finances.

On Twitter, the posts that particularly stood out to me were those in which people claimed the crypto market is useless now that the prospects for making money seem slim.

Of course, I disagree. There are many more financial advantages of crypto than making money and the sad part is that they are not as popular. To change the narrative, I decided that the first thing I’d do when I came back from holiday was to outline some of the other uses of crypto, beyond making money.

Sure, most cryptocurrencies are highly volatile and prone to drops in value like the ones we are experiencing now, but that is why stablecoins were created.

What are stablecoins and how do I use them?

Stablecoins are a type of crypto asset that is backed by (or pegged to) other assets (e.g. currency like U.S Dollars and assets like gold). As a result, when the price of the other asset changes, so does the price of the stablecoin.

A popular example is BUSD which is pegged to the U.S. Dollar. This means that for every BUSD you own, there is a physical dollar in a bank reserve saved in your name, but you can only access it through your BUSD. Like every other cryptocurrency, you can exchange your crypto for local currencies by selling them on exchanges in return for your local currency. You can also use them for crypto transactions and to buy other cryptocurrencies.

The general belief — that you might hear — is that stablecoins are supposedly less volatile than typical cryptocurrencies like Bitcoin and Ethereum. If true, then why did Luna, a supposed stablecoin, become unstable and crash so badly?

This was one of the questions I asked Nestcoin CEO, Yele Bademosi while speaking to him about the current state of crypto. He explained that Luna is not the typical stablecoin. “It’s an algorithmic stablecoin”, he said, which means that it isn’t backed by any asset.

For context, Algorithmic stablecoins are one of 4 types of stablecoins. Others include:

  • ​​Physically-backed stablecoins are the most popular type of stablecoins. They are backed by physical money in the bank and are equivalent to a corresponding currency that is “verified and audited in a regulated custodian bank account. This means that they are safe from market volatility. Examples include BUSD and USDT, both of which are backed by the US Dollar.
  • Commodity-backed stablecoins (like Paxos Gold) are tokens that are pegged to commodity products like silver, gold etc. For example, 1 Paxos Gold is equivalent to one physical gold kept in a bank vault.
  • Crypto-collateralised stablecoins are backed by other cryptocurrencies. A good example is DAI, a stablecoin backed by Ethereum.
  • Algorithmic stablecoins use algorithms to maintain their peg to the dollar. It was an issue with the code that caused Luna to crash.

Read more about the different types of stablecoins

Since physically-backed assets tend to be the most stable, let’s explore how people around the world have been using them to support their financial stability without investing:

Stablecoins as a low-risk savings strategy

I did a 5-part series on how people around the world have been using crypto as a way to protect their finances from high inflation or in times of socio-political uncertainty. During my research, I discovered that many of the solutions involve stablecoins.

For instance, while writing this episode on the adaptation of crypto in post-Taliban Afghanistan, I learnt that many Afghans have adapted stablecoins as a way to save money. They do this to protect their finances from the economic consequences of the Taliban overthrowing their government.

Similarly, people in other countries with inflation-prone currencies are also using stablecoins to protect their funds from currency devaluation.

Making and receiving international payments

Getting money from one country to another can be overly tasking. Sometimes, you need to physically go into a bank, or spend hours on the phone with an account manager to successfully send funds internationally. Beyond the stress, it can also be expensive.

This struggle is one of the reasons why even remote recruiters are reluctant to go international. This Into the Cryptoverse conversation with The Flip CEO, Justin Norman explores how stablecoins help.

Justin shares that he started to understand the value of crypto after he moved from the U.S. to South Africa to start his company. “I started to see how painful it was to move money across borders. I struggled with the middlemen fees and the time it took for payments to clear. So, I was initially interested in crypto from a borderless payment perspective”.

Not only is it instantaneous — literally all you have to do is send money to a crypto wallet like you would a bank account — it also doesn’t cost either party any extra money. Justin says that now every time someone expresses frustrations about international payments with him, he sees it as an opportunity to tell them about cryptocurrencies.

Bonus: To make international donations and support freedom fighters

People in Afghanistan also reported that stablecoins have been one of the ways international non-profits have been able to financially support people in the country.

During Nigeria’s EndSars protests and Hong Kong’s protests — both against oppressive governments — the availability of crypto donation options allowed supporters within and outside the country to provide monetary support anonymously.

This helped alleviate the possibility of either the activists or the supporters getting traced through donations.