What is «crypto» in plain English?
TL;DR - crypto is:
— Quis custodiet ipsos custodes?
— Custodes.
Crypto is what happens when people are tired of middleman stuff. There is no «owner» behind crypto as a whole, rather a bunch of people that came together under the idea of building a better version of the modern banking system — without excessive bureaucracy, corruption and human access to your money.
Core principles of crypto are:
— Decentralization; No one holds too much power — influence is equally distributed among peers and holders of the token, smart-contracts work as guarantors and every other blockchain competes for place under the sun.
— Anonymity; You’re free to invest despite background, absence of trading licenses or opinion of local government. Blockchain would not give up your funds upon any demands from other parties but you.
— Transparency; Every action by every participant of every blockchain network is recorded into a big, immutable spreadsheet visible to every other person.
These are what bind together every other crypto user.
With Ethereum launching smart-contracts in 2017 crypto became programmable money of the future. You have all sorts of blockchains now: Helium to support a decentralized 5G across USA, Europe, China and even some mediterranean islands; AgriDigital, which helps simplify the grain supply management for local and global businesses in Australia; IBM Food Trust or «IBM Sterling Supply Chain Intelligence Suite» launched in 2017 to track food status during the transfers in the supply chains. Every blockchain nowadays can be programmed to do stuff, which turns the whole net of chains into a decentralized global supercomputer.
The whole point of Crypto is to get rid of as many middlemans, as possible, while letting people do their business with smart-contracts acting as guarantors. In supply chains, blockchain helps to reduce paperwork, in trading — lets you buy and sell crypto directly from your wallet, without brokerage. You’re a freelancer and want to avoid the hassle of payment operators dropping support for your region? Crypto is your best friend, there's a thousand withdrawal options to almost every currency in the world, you just need to pick the right crypto platform for it.
In crypto — data is free and equally accessible to all. You can gather on-chain data in crypto to draw your own conclusions about the state of the market. Unlike with the stock market and banking system, where the ratio of deposits to credits is hidden, you can view how much funds are used as collateral against any coin or token at all times. To do so, open up any chain explorer and navigate to LP pools supported by the currency, usually they are listed next to smart-contract data. There’s Arkham for Web3 exploration, where you can login with your wallet and track any other address across every supported network. You can even hunt whales — big crypto users — with DexScreener and GeckoTerminal by watching the orderbook traders and check in on how L2 network fares with L2Beat and their risk-analysis dashboard or explore other on-chain data with Dune.
Crypto can’t be «shut down», «censored» or «muted». The whole network has no central «off» switch and runs on every PC, phone, server rack, pager, toaster, fridge, PS1 to PS5, XBOX, Mac or iPhone, Celeron, Pentium or Ryzen. When something is published inside a crypto network — be it a post on Nostr about kittens or a transaction made from wallet to wallet — no one can censor that data. Everything, every data type imaginable is engraved on the next block produced by the chain and kept forever. Only global EMP blast can halt the decentralized network to the ground, given there’s no underground bunkers running Solana or Arbitrum Nodes, for if even a speck of HDD survives — the whole network lives, being backed up on the physical device. If the owner of said HDD launches a Bitcoin Wallet client — they are the main and first node in the post-EMP blast world, with records of every transaction made since 2009. Same goes for every other blockchain — so far, as at least one device stores the backup of the network — your crypto will survive.
Crypto powers a decentralized internet, called Web3. «Web2» is the fancy word people in tight suits use to describe your daily Facebook-Telegram-Discord-Google-Instagram-Reddit loop, all the websites and how they interact with each other. «Web3» is an even fancier word, which basically says «the decentralized version of the internet». In Web3 every website is hosted on some kind of on-chain tech, like with .ENS names in ETH network and content is embedded into the chain of blocks. Decentralized web is one of the key activity drivers for blockchains — it draws people in for mass adoption and offers blockchain-powered counterparts to regular finances for those, who value their identity and data.
Boiled down to a nutshell, crypto is:
- Banking without clerks. Thanks to smart-contracts, there’s a DeFi or Decentralized Finance, which acts like the financial backbone behind every other type of activity on-chain. For instance, smart-contracts power the decentralized exchange platforms like dYdX, lending & borrow protocols, swap platforms like Uniswap or token launches on Pump.Fun.
- Swiss-level security in your pocket. Every crypto wallet is essentially a strongbox — no living person may access your funds directly, as opposed to a banking system, and no one holds keys from the wallet but you. In the event of a wallet team becoming exposed to cyber attack your crypto is still safe, unlike with banks.
- Programmable money of the future. Smart-contracts are the workhorses of the DeFi industry — they have the same role to crypto as bank clerks to a banking system. Anybody can program their own smart-contract and launch it for others to use, create a crypto or make a liquidity pool.
So, is crypto better than traditional finances?
