The chief executive officer of crypto derivatives exchange platform FTX is highlighting three major use cases for digital assets.
In a lengthy thread, FTX CEO Sam Bankman-Fried says that cryptocurrencies are more than just speculative assets.
He highlights that crypto can be used to make instant payments, provide critical structure for markets and interconnect social media platforms.
Bankman-Fried first demonstrates how easy and cheap it is to make instant payments using digital assets by creating two different accounts and initiating a transfer between them.
“I went to send $50 from Bob to Alice. I clicked ‘send’ at 8:19:33 am.
By 8:19:45, when I tabbed over to Alice, the $50 had already landed.
The fee I paid was $0.0002: around 2% of a penny.”
According to Bankman-Fried, traditional methods of transferring money are costly and can take days to process.
The CEO also says the speed and ease of token transfers can be applied to the stock market, creating a less risky structure for the industry.
“On FTX, everyone can send orders straight to the exchange; in equities, only the wealthiest traders can. Which means you can bypass all of the settlement risk from intermediaries.
But there’s another reason that blockchain helps. Say you tokenize stocks. Instead of waiting two days to settle, you can just swap [Apple’s token with USD token] on a blockchain.
Which, remember, takes about 10 seconds and costs about $0.0002 in fees. No remaining settlement uncertainty or risk. So blockchain can create simpler, more equitable, and less risky market structure and settlement.”
Next up, Bankman-Fried notes how crypto assets can create interconnectivity between social media platforms.
“By using an underlying public chain for messages, we’ve made different networks compatible. You can use any platform, and still talk to all your friends on every platform.
Your messages, and network, are yours: you can move platforms and keep them. New platforms can read/write from the chain, inheriting the network effects, allowing real competition. And each platform can make moderation decisions, so at least there’s diversity of opinions.”
The FTX head concludes his thread on crypto’s use cases by highlighting that three mentioned above are just the tip of the iceberg.
“I could see blockchain having a large impact on payments, remittances, market structure, and social media. And this list isn’t exhaustive; there are tons of areas blockchain can innovate in. I haven’t really touched at all on DeFi [decentralized finance] or Web3 gaming.”
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Featured Image: Shutterstock/Natalia Siiatovskaia/Roman3dArt
