🦊 Why the world needs cryptocurrencies

Dear Happy Foxes 😃🦊,

Earlier this year, we hired a freelancer who was based in Nigeria.

While we were lucky that she had a bank account (unfortunately not the standard yet in Nigeria, where many people remain without access to a bank account)

So we transferred the money from our bank account.

…Waited two days….three days….fours days…

No money reached her bank account yet.

Instead, over one week after the initial transfer, we had the money back in OUR bank account.

But roughly 50 EUR less…

So we invested some more hours in researching how to make that transfer happen - tried it again, filling in additional information…

…and failed again.

So we decided to transfer cryptocurrency - in this case, USDT, a stablecoin tied to the US Dollar. (more on stablecoins in a future newsletter.)

Within two minutes after hitting the “send money” button, our freelancer confirmed she received the money.

THIS is the power of cryptocurrencies!

But what are cryptocurrencies?

The Oxford Dictionary Online defined it already in 2014 as:

“A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank."

Phew…that’s a complicated explanation. Here’s what it means:

• It’s permissionless: you just need an internet connection to receive funds, and no central authority needs to “allow” you to open your crypto wallet to participate.

• You can transfer money directly to the recipient. No other parties in between.

• It’s fast: it usually only takes a few seconds to minutes until the money is in the recipient’s wallet.

• People are their own bank: You must keep your master password (aka seed phrase) safe. If you lose it, nobody in the world can help you reaccess your funds.

• Power is distributed: as the legitimacy of transactions is hard-written in code and the verification is distributed to many different computing entities, cryptocurrencies are meant to be resistant to corruption (BUT: to which extent always depends on the cryptocurrency you are looking at.)

• Usually, transaction fees (which are called “gas fees”) are only a few cents - and you see an estimation before you hit the “send money” button.

Of course, you can only use the cryptocurrency if your local supermarket accepts it as a means of payment…or if you have any other possibility to exchange the cryptocurrency for your local currency.

In our case, our freelancer utilized Binance, a popular crypto exchange platform, to convert USDT into her local currency.

What questions do you have about cryptocurrencies? Just reply to this email, and we will answer your questions in future newsletters!

Cheers

Sui Fröhlich & Ursula Volpe
Co-Founders Fox and Happy Blocks

_{Disclaimer: None of this is financial advice. Always do your own research.}