Myth: Bitcoin and Blockchain technology have no real-world applications
6 min read
- Bitcoin
“Honestly useless,” “worthless,” a “failure”… Despite being 16 years old and reaching a $3 trillion market cap, Bitcoin and crypto continue to face criticism about their value beyond speculation. While it’s true that these assets are highly volatile due to the relatively young market they’ve created, their use cases are numerous and tangible.
Economic Sovereignty
Every nation’s economic system relies on a central bank, and Sweden is no exception. While this is the norm, it comes with its flaws. Monetary policy directly impacts citizens’ daily lives, often devaluing the national currency, such as the krona. For example, Sweden’s inflation rate between 2020 and 2025 was 24%, meaning that in 2025, 124 kronor are needed to have the same value as 100 kronor did five years earlier.
Meanwhile, Bitcoin has consistently demonstrated its ability to outpace inflation, even surpassing gold as a store of value. Speaking of gold, while it is widely regarded as one of the best assets globally, Bitcoin outperforms it in portability, divisibility, and auditability. These qualities make Bitcoin resistant to censorship, offering citizens a unique form of freedom against potentially harmful government actions.
Financial Empowerment
Censorship resistance is not just a gimmick; it allows anyone to transfer value without intermediaries. Thanks to blockchain technology, users can make instant, low-cost transactions anywhere in the world. In Sweden, where cashless payments now dominate, the need for a digital and trustless payment method is greater than ever.
Most importantly, digital assets provide true ownership and accessibility to money. A study from the Nordic Council of Ministers Information Service last year revealed that some Swedish banks make it difficult for foreigners and third-country nationals to open accounts or buy a house. Bitcoin solves this.
An Alternative to Traditional Financial Services
Crypto isn’t just a tool for populations in emerging markets; it has consistently shown the potential to enhance financial portfolios due to its low correlation, even the most conservative ones. For instance, a modest 4% allocation, rebalanced every quarter, to a balanced portfolio (60% equities and 40% bonds) from october 2015 to august 2024 could have improved annualized returns from 9.3% to 18.8% while slightly increasing the risk associated with this allocation
Additionally, blockchain technology offers access to innovative financial instruments that generate significant yields. DeFi (decentralized finance) platforms, for example, allow users to lend their digital assets. These platforms can offer annual percentage yields ranging from 5% to 15%, with 24/7 access to funds and no intermediaries.
The Remittance Use Case
In developed countries, financial infrastructure is readily available, but in developing nations, the lack of access to banking remains a critical issue. According to the World Bank, over 1.4 billion people worldwide are unbanked. This gap benefits greedy intermediaries: for example, the average remittance cost today is 6.2% of the amount sent.
Take Kenya as an example. In 2023, the country recorded $4.2 billion in remittances. At the current remittance cost, intermediaries pocketed $260.4 million in fees—a significant burden for a population with an average monthly income of $590.
Cryptocurrencies, particularly stablecoins (digital assets tied to fiat currencies), are proving to be a lifeline in these situations. A Castle Ventures VC study highlighted the booming use of dollar-based stablecoins in emerging markets, primarily for international money transfers and self-custody of savings.
Blockchain networks like Arbitrum, Optimism, Polygon, and Tron (all Ethereum scaling solutions) enable transactions for just a few cents. This represents a huge improvement over traditional money transfer fees, showing how crypto can offer real solutions in a debanked world.
The Foundation of a New Economy
The opacity of traditional finance has long been a problem—a lack of transparency that blockchain technology solves with its open and auditable nature. With these features, crypto is driving the creation of a new paradigm: open finance.
Equity or exposure to companies can now be accessed by anyone through the issuance of securities or utility tokens, enabling retail investors to directly support entrepreneurship, both locally and globally. In cases like DAOs (Decentralized Autonomous Organizations), token holders gain governance and decision-making rights, reducing the hierarchy of traditional structures.
At the same time, the openness of blockchains and the simplicity of token issuance lower regulatory and institutional costs, breaking down barriers to entry
The Internet of Money
In a globalized world, the need for a reliable financial settlement layer cannot be denied. In this new reality—already part of our present—blockchains enable people from all over the world to communicate and transact securely and almost instantly. This is a significant improvement over the era of costly wire transfers, when only accredited investors had access to the most attractive financial instruments.
Published onJan 24th, 2025
