An opinion that I’ve heard expressed by some prominent voices in the space including web 3 patron Marc Andresen goes as follows: it’s easy to point out the flaws in crypto currencies if you are in developed countries with stable governments and currencies, but people in poor countries with hyperinflation will adopt crypto.
I think this is incorrect for a few reasons.
Some background, I come from an African country that has triple digit inflation right now. At one point within the last couple of decades we’ve had inflation over 1 million percent. Those who can use US dollars, but no one dares deposit in a bank because there is no guarantee you’ll be able to withdraw. As you can imagine, armed robberies are becoming a big problem as everyone knows people have USD under their mattresses. A huge chunk of our GDP comes from remittances from people working overseas.
You’d think this would be the perfect scenario for crypto, but is it anywhere to be seen? Nope.
First, there is no exchange in the country. There is no likelihood that gvt will licence one. This means if you have crypto, there is no easy way to change it to fiat.
For the most part people associate crypto with scams. People want stability more than anything, the idea that crypto will go up in the long run is no consolation when you need money for an emergency and you are down 75%. It might work for speculation, not as a currency.
People trust the USD. Sure, there is inflation right now, but 8% is downright stable compare to triple digit inflation. Besides, most people don’t really hold money long enough to see it lose value. Those with lots of excess cash put it into property to preserve value.
Thank you for coming to my TED talk