It feels like right now, one of the most significant applications of cryptocurrency is avoiding capital controls in countries like Argentina where people don't trust the local currency/government.
100% agree on the "if there isn't an underlying productive activity, then no point" thing.
That said, I think there are some, especially when you equate to non-crypto versions that exist. And not all of these need all of the various "pillars" of crypto: blockchain, decentralization, etc... and obviously they are hypothetical, idealized versions - the reality of a given option in that sector may not be productive at all.
- payments (if VISA charges 2.5%, it seems like a crypto network could do it for less?)
- peer-to-peer loans (peerstreet exists, not a huge market though)
- international money transfers/remittances
- game currencies (there already exists USD markets for in-game currencies, items)
- games themselves (i.e. logic for game exists on blockchain, updated by devs)
- NFTs (not a world changer, but if pokemon/art auctions exist, no reason to not have digital versions)
- Smart contracts (no need for enforcement on things that can be encoded in blockchain)
- organizational structure (if simple, can be encoded)
- incentivizing things that are hard to incentivize: micropayments for data, activity (Brave browser)
- as unregulated, unvoting "stock" in a company, for them to raise money (your opinion on whether this is "good" may vary)
- anonymous, untraceable payments: again, maybe someone might not think this is "good" but if physical cash exists, then I think it's fair to say that there is some (how much?) value there
- exchanges: presuming the above "real" applications, you need somewhere to trade
- gambling: actual real world gambling with legally explicit house-takes-percentage exists. I personally have no interest in it, but is putting 100 bucks on dogecoin fundamentally different than 100 bucks on red 21 in Vegas? I don't think either is a good idea, but some people seem to derive benefit from it, and if a casino is allowed to exist and make money, I'm not sure dogecoin needs to be destroyed/banned.
Is this a "crypto changes the world and we all live in the Metaverse!" list? Nope. Are there a million ways any given idea in that list could go wrong? Yes! But I think there's a least a few profitable businesses there. Last year at their height, crypto prices reflected a "change the world!" estimation, but I think today they reflect "it's all vaporware/scams." The reality (for those tokens actually associated with real products) is somewhere in between.
Final note, in regard to the gambling metaphor: I think this is actually the one that should be most salient right now, with all the disaster. Investing in crypto was always very explicitly stated to be risky, using literally the phrase "you can lose everything, even without fraud, do not put any money in anything labeled crypto that you can't afford to lose". In the 2007/8 financial thing, people seriously lost real, vital money. You could show the grandma who got kicked out of her house. This time, I haven't seen those stories. This does not reduce SBF (or any other scam artist)'s guilt at all, and illegal activities should be 100% prosecuted, but it means that most people (and companies, and investors!) were doing just that: gambling. When people lose money gambling, I'm not sure that's an event that society needs to take any action as a result of.
It feels like right now, one of the most significant applications of cryptocurrency is avoiding capital controls in countries like Argentina where people don't trust the local currency/government.
100% agree on the "if there isn't an underlying productive activity, then no point" thing.
That said, I think there are some, especially when you equate to non-crypto versions that exist. And not all of these need all of the various "pillars" of crypto: blockchain, decentralization, etc... and obviously they are hypothetical, idealized versions - the reality of a given option in that sector may not be productive at all.
- payments (if VISA charges 2.5%, it seems like a crypto network could do it for less?)
- peer-to-peer loans (peerstreet exists, not a huge market though)
- international money transfers/remittances
- game currencies (there already exists USD markets for in-game currencies, items)
- games themselves (i.e. logic for game exists on blockchain, updated by devs)
- NFTs (not a world changer, but if pokemon/art auctions exist, no reason to not have digital versions)
- Smart contracts (no need for enforcement on things that can be encoded in blockchain)
- organizational structure (if simple, can be encoded)
- incentivizing things that are hard to incentivize: micropayments for data, activity (Brave browser)
- as unregulated, unvoting "stock" in a company, for them to raise money (your opinion on whether this is "good" may vary)
- anonymous, untraceable payments: again, maybe someone might not think this is "good" but if physical cash exists, then I think it's fair to say that there is some (how much?) value there
- exchanges: presuming the above "real" applications, you need somewhere to trade
- gambling: actual real world gambling with legally explicit house-takes-percentage exists. I personally have no interest in it, but is putting 100 bucks on dogecoin fundamentally different than 100 bucks on red 21 in Vegas? I don't think either is a good idea, but some people seem to derive benefit from it, and if a casino is allowed to exist and make money, I'm not sure dogecoin needs to be destroyed/banned.
Is this a "crypto changes the world and we all live in the Metaverse!" list? Nope. Are there a million ways any given idea in that list could go wrong? Yes! But I think there's a least a few profitable businesses there. Last year at their height, crypto prices reflected a "change the world!" estimation, but I think today they reflect "it's all vaporware/scams." The reality (for those tokens actually associated with real products) is somewhere in between.
Final note, in regard to the gambling metaphor: I think this is actually the one that should be most salient right now, with all the disaster. Investing in crypto was always very explicitly stated to be risky, using literally the phrase "you can lose everything, even without fraud, do not put any money in anything labeled crypto that you can't afford to lose". In the 2007/8 financial thing, people seriously lost real, vital money. You could show the grandma who got kicked out of her house. This time, I haven't seen those stories. This does not reduce SBF (or any other scam artist)'s guilt at all, and illegal activities should be 100% prosecuted, but it means that most people (and companies, and investors!) were doing just that: gambling. When people lose money gambling, I'm not sure that's an event that society needs to take any action as a result of.