Crypto in certain African and South American countries seem to be booming, yet still we remain sceptical that crypto has any use cases outside speculation. And it’s not just those continents, we see crypto being used for cross-border remittances and inflation-free store of value all over the world. Cryptography is a tool for enforcing digital rights, and the use cases of cryptography are not so much the west but rather the countries that need them the most. At Holonym we see a new use case often, one that is not even financial at all: privacy, along with the need for secure wallets and global access to finance and resources without strong government identity systems. Now, privacy having a use case is even more surprising than crypto having a use case. Yet all of these use cases are critical for security and prosperity.

I think we in the west are ignorant of even standard financial crypto use cases, still focusing on token launches and memes for four reasons

1. Our banking system works and we trust our government sufficiently. For most situations, crypto consequently can’t be 10x better than the incumbent system and therefore not worth learning the new system to use. New products need to be 10x better to replace habitual user activities.

2. Only speculation fills our news feeds because it’s more controversial (bad news sells!)

2. Before believing it, any talk of crypto use cases immediately goes through a filter of scepticism due to the years of being conditioned by use cases never panning out

3. Web3-native VCs are used to short-time-horizon upside (e.g. token generation within a year) rather than long-term risky bets that may or may not pay off. This encourages builders to prioritize tokens if they would like to raise more funds. With investors and builders focusing on token launches, there are few left to focus on real use cases. However, those who do often end up building sustainable long-term businesses!

But why are cryptography and privacy are needed?

– When users want to hide private information from dictatorships or hostile governments who want to imprison, deport, or kill them

– When governments are not just harmless beurocracies but rather dictatorships that can steal or lock user funds

– When useres have weak identities due to lack of infrastructure in their countries, so they have no access to fintech or sybil-resistant aid distribution. 

Let’s look at the example of the UNHCR refugee identity program. Refugees often lack standard valid identity documents and often need to receive special types of identities from issuing organizations. Yet all data is typically kept by these issuers, who may reveal it to a hostile government. When the UNHCR implemented this program in Malaysia, the Malaysian government later asked to reveal all personal data of the refugees. With zero-knowledge (ZK) cryptography, issuers such as UNHCR would not be able to give this data to governments which would protect people in situations when privacy is critical.

Furthermore, there are situations where governments may freeze assets at any time. Myanmar has tight controls on how you can spend or save money, to the extent where it is illegal to even to many basic tasks like hold stable currencies for over 6 months, and user accounts are frozen for doing trivial things. 

Not only are the situations where privacy is critical, even life-or-death, there are also situations where local currency devalues so quickly that owning crypto can meaning the difference between prosperity and poverty. Many countries in Africa and South America are starting to use crypto for these use cases. And other countries with inflation or capital controls likely will as well. There is likely a great opportunity to bring crypto to countries with high inflation who don’t use it often yet.

In short, use cases of crypto and cryptography happen when the country’s infrastructure is either inadequate or simply malicious. We don’t see this in the west because we have relatively stable and helpful governments and financial infrastructure, and because our news is focused on crypto-as-speculation. But there are tons of builders here in the west; I hope we can expand our horizons to helping other parts of the world.