When Will Crypto Be Useful?

Mike Novogratz

Enrobed in a purple satin vestment as interesting, eccentric, and colorful as the man himself, Mike Novogratz, the high priest of Crypto, thrilled and delighted his disciples, adherents, and devotees from the main stage of Bitcoin2021 Miami. Confirming what the audience of crypto-revelers already deeply believe, the crypto-billionaire explained, “What gives it [value] is this social construct, that we believe it’s got value. It’s the narrative. And so we need more and more storytellers, and the optimism is, we’re gettin’ ’em. (Applause).” Mr. Novogratz has a good reason to believe that crypto is valuable. In March 2021, he revealed that cryptocurrencies made up nearly 85% ($4.8 billion) of his $5.65 billion net worth.

Awareness is not the issue

Practically everyone has heard of crypto. But as fun and interesting as investing in a new asset class on new trading platforms may be, the market cap of all the crypto ever created represents under $2 trillion, which is about 0.2% of the estimated $1 quadrillion of accumulated wealth in the world. Said differently, to grow to any significant size, cryptocurrency is going to have to become as useful and accessible as fiat currency. This isn’t an awareness issue, and it isn’t an issue you can solve with storytelling. It’s a technical issue − a big one, actually.

Scalable. Secure. Decentralized. Pick any two.

The promise of Decentralized Finance (DeFi) is the financial freedom afforded by three critical attributes: scale, security, and decentralization. Unfortunately, there are some significant technical hurdles preventing any system from attaining full measures of all three. So, in practice, your network can be big and secure, or decentralized and secure, or big and decentralized. But it cannot be big, decentralized, and secure.


According to Visa, there are approximately 3.3 billion Visa cards worldwide and VisaNet, the company’s global processing network, can handle more than 65,000 tps (transactions per second). On an average day, Visa only processes about 2,000 tps, but it’s nice to know that if everyone on earth had a Visa card, VisaNet wouldn’t blink. Fast, secure, reliable payments are core values for Visa. It has been scaled to global proportions, and it is one of the most secure financial networks in the world. But, alas, it is centralized.

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This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it.

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