Back when Canadians used to travel to the US, it was common for a situation like this to arise: "Hey, I'll send you money. Do you have Venmo?" And then, as a Canadian, you'd say, "sorry, we don't have Venmo in Canada. We use our own proprietary system called Interac e-Transfer. Do you have PayPal? I think I still have an account. Let's try." Once this exchange was over, both parties would then sit there and wonder why the hell it's still so expensive and awkward to move money around.

As another example, take global remittances. These are payments sent by a person back to their country of origin, usually to a family member. And in 2024, it was estimated that some $905 billion was sent around the world for this reason, with about $685 billion of it being sent to low and middle-income countries. But it was also estimated that the average cost of doing this was around 6.62%, which is double the UN's target of 3%.

For anyone who has used crypto before, this feels painfully archaic. Sending a wire transfer can cost over $50 and it can take time to clear, assuming that you got in before the bank's cut-off time. Sending things via a blockchain is cheap (it's pennies now) and it happens instantly and securely — 24 hours a day, 365 days a year. This was always one of the promises of crypto, but now we're seeing it play out very clearly with stablecoins. Here's an example.

Stablecoins are a type of cryptocurrency that have their value pegged to another asset, such as gold or a fiat currency. And at the time of writing this post, something like 99% of stablecoins are pegged to the US dollar. The benefits of this are twofold. Firstly, it creates price stability. You're effectively holding US dollars. But now you have a US dollar on a blockchain (or a tokenized US dollar), meaning you can do crypto things with it, like send it around the world instantly and for free.

The other benefit of this is that it can serve as a hedge against a problematic local currency. Would you rather hold the Argentine Peso or the US dollar? The use cases are powerful. So it's not surprising that, by some estimates, a quarter of all global remittances now involve some form of cryptocurrency. Argentina also happens to be the leading crypto market in Latin America. Between July 2023 and June 2024, the country recorded about $91 billion in crypto transactions.

It's fascinating to think about how all of this will reshape the global financial landscape. Already stablecoin transactions are threatening Visa in terms of overall transactions. All someone needs is a mobile phone and a crypto wallet. And by the way, as soon as you link a wallet to a human, you can also quickly determine how much money they've been sending/receiving, figure out tax liabilities, and so on.

Also noteworthy is the fact that the (vast?) majority of stablecoin transactions settle on Ethereum. It is the substrate powering this market, as well as many others. I don't know what that exactly means for Ethereum as a crypto asset. But I do believe it means something meaningful. And in this instance, it stems from a fairly simple want: "I would like to send you money cheaply and securely, and I don't want inflation to then kill my purchasing power."

Cover photo by Alistair MacRobert on Unsplash

I was at a dinner recently where the topic of crypto came up. Only two of us at the table were full-on believers, and the rest were generally sceptics. So naturally, the two of us started talking about why we think crypto is important. But in moments like this, it always becomes immediately clear that crypto is really hard to explain in a succinct and compelling way. Like, I don't know how to do it. Thankfully, venture firm a16z just released their latest State of Crypto report, and so here are a handful of interesting takeaways.

The number of crypto addresses continues to grow. Currently it's at an all-time high of approximately 220 million, which roughly mirrors the adoption curve of the internet back in the 90s (log scale). It is, however, important to note that one crypto address does not necessarily correspond to one human being. For example, I have many different crypto addresses. So if you dig a little deeper, you'll see that their net estimate is somewhere between 30-60 million real human beings transacting using crypto every month. This is the estimated active user base and it continues to grow.

The number of mobile crypto wallet users is also growing rapidly outside of the US, namely in countries like Nigeria, India, and Argentina. This is the result of a number of factors: population growth, mobile phone adoption, government support, inflation, and many others. I mean, since 2010, the Argentine Peso has lost basically 99% of its value against the USD. So of course you'd rather put your money somewhere else, such as in stablecoins.

Stablecoins are cryptocurrencies that have their value pegged to something else, such as a fiat currency. Today, they are one of the most popular crypto products and virtually all of them (more than 99%) are pegged to the USD dollar. This is viewed by some as an opportunity to strengthen the dominance of the US dollar at a time when it's waning (see above). But more importantly, stablecoins already serve two important functions in the market: one, it's as stable as the US dollar; and two, the cost of sending a stablecoin anywhere in the world is now basically free. Say goodbye to bank wire transfers.

It's worth reiterating that a16z is a venture capital firm that is heavily invested in the crypto space. And so reports like this are naturally a form of marketing and a form of lobbying. Still, there's a lot of great information in here that you can use to form your own opinions about the sector. It may not be succinct, but if you take the time, I think you'll find it compelling.

Back when Canadians used to travel to the US, it was common for a situation like this to arise: "Hey, I'll send you money. Do you have Venmo?" And then, as a Canadian, you'd say, "sorry, we don't have Venmo in Canada. We use our own proprietary system called Interac e-Transfer. Do you have PayPal? I think I still have an account. Let's try." Once this exchange was over, both parties would then sit there and wonder why the hell it's still so expensive and awkward to move money around.

As another example, take global remittances. These are payments sent by a person back to their country of origin, usually to a family member. And in 2024, it was estimated that some $905 billion was sent around the world for this reason, with about $685 billion of it being sent to low and middle-income countries. But it was also estimated that the average cost of doing this was around 6.62%, which is double the UN's target of 3%.

For anyone who has used crypto before, this feels painfully archaic. Sending a wire transfer can cost over $50 and it can take time to clear, assuming that you got in before the bank's cut-off time. Sending things via a blockchain is cheap (it's pennies now) and it happens instantly and securely — 24 hours a day, 365 days a year. This was always one of the promises of crypto, but now we're seeing it play out very clearly with stablecoins. Here's an example.

Stablecoins are a type of cryptocurrency that have their value pegged to another asset, such as gold or a fiat currency. And at the time of writing this post, something like 99% of stablecoins are pegged to the US dollar. The benefits of this are twofold. Firstly, it creates price stability. You're effectively holding US dollars. But now you have a US dollar on a blockchain (or a tokenized US dollar), meaning you can do crypto things with it, like send it around the world instantly and for free.

The other benefit of this is that it can serve as a hedge against a problematic local currency. Would you rather hold the Argentine Peso or the US dollar? The use cases are powerful. So it's not surprising that, by some estimates, a quarter of all global remittances now involve some form of cryptocurrency. Argentina also happens to be the leading crypto market in Latin America. Between July 2023 and June 2024, the country recorded about $91 billion in crypto transactions.

It's fascinating to think about how all of this will reshape the global financial landscape. Already stablecoin transactions are threatening Visa in terms of overall transactions. All someone needs is a mobile phone and a crypto wallet. And by the way, as soon as you link a wallet to a human, you can also quickly determine how much money they've been sending/receiving, figure out tax liabilities, and so on.

Also noteworthy is the fact that the (vast?) majority of stablecoin transactions settle on Ethereum. It is the substrate powering this market, as well as many others. I don't know what that exactly means for Ethereum as a crypto asset. But I do believe it means something meaningful. And in this instance, it stems from a fairly simple want: "I would like to send you money cheaply and securely, and I don't want inflation to then kill my purchasing power."

Cover photo by Alistair MacRobert on Unsplash

I was at a dinner recently where the topic of crypto came up. Only two of us at the table were full-on believers, and the rest were generally sceptics. So naturally, the two of us started talking about why we think crypto is important. But in moments like this, it always becomes immediately clear that crypto is really hard to explain in a succinct and compelling way. Like, I don't know how to do it. Thankfully, venture firm a16z just released their latest State of Crypto report, and so here are a handful of interesting takeaways.

The number of crypto addresses continues to grow. Currently it's at an all-time high of approximately 220 million, which roughly mirrors the adoption curve of the internet back in the 90s (log scale). It is, however, important to note that one crypto address does not necessarily correspond to one human being. For example, I have many different crypto addresses. So if you dig a little deeper, you'll see that their net estimate is somewhere between 30-60 million real human beings transacting using crypto every month. This is the estimated active user base and it continues to grow.

The number of mobile crypto wallet users is also growing rapidly outside of the US, namely in countries like Nigeria, India, and Argentina. This is the result of a number of factors: population growth, mobile phone adoption, government support, inflation, and many others. I mean, since 2010, the Argentine Peso has lost basically 99% of its value against the USD. So of course you'd rather put your money somewhere else, such as in stablecoins.

Stablecoins are cryptocurrencies that have their value pegged to something else, such as a fiat currency. Today, they are one of the most popular crypto products and virtually all of them (more than 99%) are pegged to the USD dollar. This is viewed by some as an opportunity to strengthen the dominance of the US dollar at a time when it's waning (see above). But more importantly, stablecoins already serve two important functions in the market: one, it's as stable as the US dollar; and two, the cost of sending a stablecoin anywhere in the world is now basically free. Say goodbye to bank wire transfers.

It's worth reiterating that a16z is a venture capital firm that is heavily invested in the crypto space. And so reports like this are naturally a form of marketing and a form of lobbying. Still, there's a lot of great information in here that you can use to form your own opinions about the sector. It may not be succinct, but if you take the time, I think you'll find it compelling.