From the mine #4

Crypto transactions are not investments

On its path to becoming an alternative to fiat money, crypto struggles because of the way governments perceive it.

In many countries, crypto assets are categorised as property and crypto transactions as investments. Because of this, additional taxes are levied on every crypto payment you make.

Meaning, buying a cup of coffee using crypto is always more expensive than using fiat. And that’s where the problem lies.

Payment is the most natural use case of money. In fact, we invented money to facilitate payments and make transactions accurate. Fiat did decently in serving that purpose, despite having its own shortcomings. And while crypto presents us with solutions to those, and promises to be a better candidate for the role of money, we are still unable to adopt it because of the complications created by the current tax code.

Using crypto attracts its own set of costs, making crypto payments a suboptimal alternative to fiat payments.

But this scenario might just change. American senators, Pat Toomey and Kyrsten Sinema, are pushing a bill that would make small crypto transactions tax-free. To be precise, they intend to cut taxes on crypto payments of up to $50. And while that’s a small amount in itself, it’s actually a big step in the right direction, which shall accelerate crypto adoption.

The state of crypto

California re-allows crypto donations

Back in 2018, California had banned crypto donations for political campaigns citing transparency concerns. Mid-July, this decision was reversed, with a few added rules that ensure traceability. As long as crypto flows in via an intermediary that uses KYC protocols, and is converted to fiat within two days, it will be considered a legal in-kind contribution.

Credit cards won’t buy crypto in Taiwan

Stating credit cards are supposed to serve as a consumer payment tool and not an investment tool, Taiwan’s Financial Supervisory Commission has asked banks not to grant virtual asset providers the status of merchants. Indirectly, this bans the purchase of cryptocurrencies using credit cards in Taiwan.

South Korea postpones the 20% tax

The 20% tax on crypto gains was first announced in January 2021 and was supposed to come into effect from January 2022. However, last year the government pushed the implementation date to January 2023 and now to January 2025. The South Korean government wants to regulate the crypto market before implementing tax rules.

Blockchain + Energy = Sustainability

The transition from traditional methods of energy production to more sustainable and climate-friendly methods has been on our to-do list for ages. And the reason we are yet to make considerable progress on this pressing task could be the limitations of the existing energy systems our society functions on.

Centralised energy systems, wherein the production and storage of energy is concentrated geographically and institutionally, give rise to costs and lead to rigidity.

41% of the electricity bill you pay goes towards the maintenance of energy delivery infrastructure. And roughly another 15% to the involved retail intermediaries. Using blockchain and peer-to-peer energy trading, we can minimise these components of your electricity bill and in effect make electricity cheaper. Let’s understand how.

If hyperlocal renewable energy power plants are set up, we can create ecosystems in every neighbourhood, allowing households to source green energy from a nearby facility. This would significantly reduce the distance energy travels before it powers your home and hence reduces the cost associated with delivery infrastructures.

At the same time, the amount of energy lost during delivery, which is currently at 8% in a centralised energy system, will also drop significantly in hyperlocal energy grids.

Retail intermediaries are involved in the distribution of energy to match the demand and supply on the network. However, smart contracts and AI can replace these intermediaries, without accounting for 15% of your electricity bill.

Based on historical averages and current consumption, the price of energy units can be made dynamic, such that the demand and supply are always equal. This will also allow for consumers to trade units of energy that they aren’t using and get rewarded for minimising their carbon footprint.

With intermediaries out of the picture and a super compact delivery infrastructure, the costs of consuming renewable energy are lower. However, in such a scenario there’s little incentive for any organisation to invest in the expensive equipments required to set up power plants. This is where crypto can step in.

By decentralizing energy systems using utility tokens, only small investments need to be made by everyone using a micro-grid. This way, households can own a part of their neighborhood’s power plant and get rights to use the energy it produces.

With blockchain and crypto, renewable energy can be produced locally, delivered efficiently and consumed responsibly.

What’s up at Flint?

On asking all of you what we should build next, we learned that you wanted secure yields on your other coins as well. And that’s what we did this month.

11 more coins can now earn yields on Flint, without being locked in.

Your BTC, ETH, SOL, MATIC and many more have their own room on Flint now. It’s time you bring them all home, see them all grow, and manage your crypto wealth with ease.

By now, you would have already seen the market tracker we have added to the app. Make sure you add all your favourite coins to the watchlist, so you get notified of what’s moving where.

And lastly, the long awaited news section is ready for you to start exploring. Now you will be the first to know of every noteworthy event in the crypto world. Once you have update the app, open the market tracker and switch to the news tab to get started.

With all of this done, please let us know what you’d like for us to build next. Share your feedback, suggestions and more on support@flint.money. We are always looking forward to hearing from you.

Our two cents

By asking for negligible-to-zero documentation, charging minimal fees and being omnipresent digitally, at a first glance DeFi seems to have no barriers to entry. And yet, the rate of crypto adoption says otherwise. In this version of Our two cents, we’d like to discuss the barriers to crypto adoption, and explore reasons beyond taxes.

The biggest roadblock seems to be technostress and the educational gaps that come with it. The rate at which new technologies are reshaping the crypto landscape can be difficult to cope with for a lot of groups in our societies. The extensive use of jargons, technical terms, and smart contracts, that only a few people know how to read, can feel alienating. When a person doesn’t understand how a system works, they are unlikely to trust it.

One solution in disguise to this barrier, that has rapidly picked up steam, is content marketing. A lot of brands in the crypto space are putting out educational content of various forms. And while the primary motive for their efforts is to acquire new customers, it’s an undeniable fact that this has helped people understand crypto better.

The other blocker, that we are yet to solve for, is the wealth gap. Disposable income across socio-economic brackets tends to vary significantly, with those at the lower end of the spectrum finding themselves in a constant cash crunch. Due to lack of liquidity, an individual’s ability to invest in new avenues is restricted. After paying for all necessary expenses there isn’t much left, and even if there is something that’s saved, people would prefer to make safer bets, with institutions they have known for years, and can trust relatively easily.

This second barrier to crypto adoption stems from a larger issue. One that we all need to solve for, regardless of which type of money we believe in. And from the endless opportunities crypto brings with itself, it’s fair to assume it will contribute in closing the wealth gap when it finds solid footing.