If sheer square footage of advertising space is any indication, crypto has arrived. Crypto billboards surround the Bay Area and line LA highways, and you can’t catch a train in NYC without running into an ad for a coin or exchange. A-listers like Gwyneth Paltrow are pushing crypto platforms, and this year’s Super Bowl broadcast was studded with big-budget crypto spots, each trumpeting the opportunity to strike it rich and “make history,” as LeBron James told a smooth CGI’d version of his younger self. 

But despite their ubiquity and lavish expense, these ads routinely omit any description of what crypto is or what any of the crypto companies that have paid to plaster our landscape—a group that includes currencies like Bitcoin and exchanges such as FTX, Coinbase, and Crypto.com—are actually selling. There’s a good reason for that. While the industry has been good to lucky speculators with the disposable cash to risk and the time to figure out how to do so, it has little to offer the average person today. 

But so far, the crypto industry has not made good on that democratizing promise. “Historically, claims like these often originate from groups of people with a significant amount of power and privilege already, who are seeking to reconsolidate and enhance that power in a new realm,” says Mar Hicks, a historian of technology, gender, and labor and the author of Programmed Inequality. Indeed, apart from a few lucky players, the crypto riches seem to be flowing mostly toward crypto executives and longtime Silicon Valley VCs, who need regular people to continue to invest in the industry so that it can keep growing. As of September 2021, almost 9 in 10 Americans polled had heard of cryptocurrencies but just 16% of those had used them; meanwhile, billions of dollars have already been lost to crypto fraudsters and scammers.

There is no clear picture of exactly how crypto will change the future of finance or the web, and little that can actually be done with cryptocurrencies should you buy some. Nevertheless, the crypto industry has ballooned into a shape too big to ignore. You may be able to block out the litany of paid messaging, but we all will likely feel the effects of crypto’s impact on society, whether we choose to engage or not.

And there are some beneficial changes happening, hiding under the star-studded bluster. The distributed blockchain protocol on which cryptocurrencies rely is winding its way into the back ends of industries like traditional finance and pharmaceuticals, offering real but mostly behind-the-scenes benefits like speed and transactional transparency. Look past the utopian rhetoric, the regulators playing catch-up, and the potential reshuffling of web platforms, and you’ll see that crypto’s most lasting positive contribution to history may be something closer to an invisible protocol like Bluetooth than a worldwide financial revolution. 

---

To understand the crypto industry, we first have to pull apart its three main pieces—work that those Super Bowl ads avoided in favor of platitudes and Larry David in period costume.

The first element is cryptocurrencies. There are more than 10,000 of them globally, the most popular being Ether (ETH) and Bitcoin (BTC). Cryptocurrencies can be either coins or tokens. It’s a distinction that might seem a few syllables away from a hand wave, but in essence, tokens represent an asset (access to a lecture, for instance, or a digital representation of a physical item like a contract). By contrast, coins have purchasing power—the ability to buy tokens and, one day, a wide variety of other goods. 

The second is the blockchain, which—despite the singular form—isn’t just one thing. It’s a type of back-end protocol that uses “consensus mechanisms” (in place of traditional authorities like banks) to approve changes, and visible ledgers (rather than private recordkeeping) to log those changes. The history of blockchain is intertwined with that of crypto; a pseudonymous engineer—or group of engineers—called Satoshi Nakamoto used the protocol to devise Bitcoin in 2008, in the midst of the US financial crisis. Bitcoin was to be a new, decentralized system that would allow “any two willing parties to transact directly with each other without the need for a trusted third party,” eliminating middlemen like banks. With a blockchain, Nakamoto wrote, finance could be purely peer-to-peer, with each transaction added to an immutable record.

The third piece of this story is Web 3.0, or Web3, a term coined in 2014 by Ethereum Project cofounder Gavin Wood. Expanding on Nakamoto’s ideas, Wood envisioned a fully decentralized internet, where individuals could use digital tokens to do business online instead of relying on Big Tech platforms like Amazon or Google to manage security, storage, payments, and everything else that keeps the internet running. Web3 is a container concept for crypto and blockchain, positing a whole new digital economy where individuals carry a variety of cryptocurrencies in a digital wallet to buy goods and services from other individuals, or just to tip the creators of content they enjoy. In this (still theoretical) vision, the Web3 world resembles an enormous mall, with each shop taking payment in gift cards that you must purchase with real money before stepping inside. Many companies are purportedly working to realize the vision, but the biggest “Web3” businesses today are still cryptocurrency exchanges, cryptocurrencies, or the tooling to support them—although with so much funding sloshing around, that may soon change.

What is a regular person to make of all this? Should you be brave, as Matt Damon suggests in his Crypto.com TV ad, and turn your real money into Bitcoin? Should you choose from the more than 150 crypto wallets available to start your journey into the mall of the future? If you want to do anything with your money—buy tickets to a movie or split a bill among friends—the answer is no, not yet. And especially not if you don’t have the financial cushion to lose it all. 

What is a regular person to make of all this? Should you be brave, as Matt Damon suggests in his Crypto.com TV ad, and turn your real money into Bitcoin?

Fourteen years after Bitcoin first came to be, regular people can mostly engage with crypto only by investing in currencies. That means buying coins or tokens and waiting for them to increase in value. The purchase requires using a third-party crypto exchange platform like Coinbase or FTX, which all charge trading fees and have different levels of security.

Besides investing in coins, consumers can now use cryptocurrencies to buy NFT art—unique or “nonfungible” tokens that often appear as an image or video, but could also be audio. NFT art is an investment too; until recently, there’s been little one can do with it besides display it as an avatar or deploy it in a video game (now you can also use it to gain access to exclusive crypto communities). Regardless, it has exploded into the zeitgeist. Martha Stewart launched a Christmas collection of NFT photos of her farm, Justin Bieber spent more than a million dollars on a Bored Ape NFT, and Reese Witherspoon’s production company, Hello Sunshine, announced it would adapt NFT collections for movies. NFTs could potentially be used to make secure and traceable digital contracts for real-world assets like cars and houses. But these applications still remain rare apart from a few buzzy experiments; legal requirements make those processes difficult to fully replace.  

Crypto can also be used to donate to charities like Save the Children and the United Way (facilitated by third parties like The Giving Block, which charge their own fees), or even to nations; Ukraine received more than $50 million in crypto donations after the country’s official government Twitter account posted its Bitcoin and Ethereum wallet information. And TurboTax recently announced that it will let users automatically reinvest their tax refunds in crypto through a partnership with Coinbase. But it’s important to note that no one’s promising a way to pay those taxes in crypto. In fact, there is little about crypto that resembles a currency today.

$625
million

The amount (per the exchange  value at the time) stolen in a single blockchain hack, reported in March.

When consumers buy crypto, it’s added to their wallet, a word that promises the same kind of everyday spending power of credit cards and cash. But sending crypto from one individual to another, or between individuals and small businesses, is still expensive and unwieldy. Both parties need to have compatible wallets—you can’t send bitcoin from an Ethereum wallet, for example—and the sender must enter the receiver’s wallet ID, which is usually more than 20 characters long. Sending crypto to another wallet can take from a few minutes to hours, depending on how busy the network is, and there are no security measures to ensure you’ve reached the correct person; if you accidentally miss a digit and drop coins in the wrong wallet, you’re out of luck. 

And then there are the fees. It costs money to set up a wallet, and more to send crypto or exchange dollars for coins. Ethereum, for example, has “gas fees,” measured in gwei, that users pay to transact and miners collect for adding the transactions to the blockchain. In addition to the differences between cryptocurrencies, fees vary by transaction type, speed and security preferences, wallets, and exchange platforms—and they can fluctuate on the basis of congestion, the price of the currency, and changes to company policies. All this makes costs extremely hard to predict before diving into a transaction. And for smaller transfers, a user could end up spending a huge percentage of the original amount in fees. At the time of writing, moving $5 worth of bitcoin between Coinbase—which hosts a popular wallet—and a traditional US bank account cost about $1; transferring $5.13 worth of ETH (.0017 ETH) from one wallet to another cost a whopping $4.46 in gas fees. Because Ethereum fees can be so high, savvy investors sometimes wait to do transactions in the middle of the night when traffic is sluggish.

Some companies, like the YCombinator startup Paymobil, are working on making small transfers easier and cheaper. Paymobil’s goal is for its users to be able to send any form of currency to a phone number or email address—it would be an international Venmo with crypto running silently under the hood. But that’s not a trivial prospect. When the startup began, in 2020, processing fees for Ethereum—the network the company uses—were about 20 cents on small transfers. But as Ethereum has become more popular, the fees have become prohibitive for what Paymobil wants to do. Founder Daniel Nordh says the company is currently subsidizing the user transaction fees and working out how to move forward. Ethereum is developing more cost-effective tooling that might work, and Bitcoin has a different approach with lower fees but less security. “We’re probably still another generation away from the technology being ready for these kinds of low transaction fees,” he says.  

Bigger players haven’t figured out peer-to-peer crypto either. PayPal and Venmo (which PayPal owns) have claimed to support crypto since early 2021. But a closer look at their services reveals that though the platforms allow US customers to buy, sell, or trade crypto—invest, basically—they can’t send crypto to other users or pay directly with coins. PayPal users who qualify can use crypto for purchases only by first converting it to fiat currency. If “the future of money is here,” as Coinbase claims on its website, apparently there’s not much regular people can do with money in the future.

---

Despite the fact that it’s difficult to spend cryptocurrency, it’s still pretty easy to lose it, and as the industry grows, so do the losses. Without the protections set up in traditional financial systems (such as the Know Your Customer, or KYC, protocols that require identity verification for financial transactions), fraudsters cost crypto investors—mostly individuals like the targets of all those ads—more than $14 billion last year, almost twice the amount lost the previous year. The losses keep mounting. In late March, for example, Sky Mavis reported that a hacker had stolen cryptocurrency then valued at $625 million from the blockchain behind its pay-to-play game AxieInfinity.

Even if their wallets are not hacked or their crypto assets liquidated, individuals face risk from the extreme volatility of crypto markets; Bitcoin’s value dropped more than 20% in a single day multiple times in just the past six months.

$96 billion

The estimated worth of Binance CEO Changpeng Zhao at the end of 2021.

“I worry about access; I worry about misuse,” says Afua Bruce, a social policy and technology expert and the author of The Tech That Comes Next. “When we’re developing new technologies, we have to figure out who are the communities we’re building for. Can they use it? What does sustainability look like? How is it actually empowering the communities we say we’re building for? I don’t know if those questions have been asked and answered for blockchain.” 

In fact, the crypto industry’s relationship with its community seems to be a predatory one. The “we” in “WAGMI” is a small group of predictable players who are getting rich off the risks taken by regular people. Indeed, as of December 2021, .01% of Bitcoin holders controlled 27% of the currency—a far more skewed ratio than for dollar ownership in the US, which is not a flattering statistic to begin with. And because they are not backed by any real asset, cryptocurrencies increase in value as the demand for them rises. When more individuals choose to buy in, VCs and crypto executives watch their own portfolios trend up and to the right. There are plenty of uses for marketing in tech: it can raise awareness of a new technology or help build a user base before monetization. Both those things are happening in crypto. But if marketing persuades enough people to turn real money into crypto coins, it can also literally pay the industry’s bills.

Crypto companies have already made people on their executive teams into billionaires—like Sam Bankman-Fried, the 30-year-old CEO of FTX, who started his short career in traditional finance and is now worth an estimated $24 billion. Bankman-Fried is currently the richest American in crypto, but there were six other “crypto billionaires” on Forbes’s 2021 list of the richest Americans. And that’s only in the US; Binance CEO Changpeng Zhao, who has found a new base in Dubai since China banned crypto, was worth $96 billion at the end of 2021 (but had dropped to $63 billion by the beginning of April). While the Web3 pitch may promise an egalitarian utopia, the current distribution of crypto wealth aligns more closely with late-stage capitalism. “Capitalism is very happy to sell a real product and make a small profit on it,” says David Golumbia, a crypto critic and the author of The Politics of Bitcoin. “But it’s even happier to sell a scam. Never underestimate the power of a lot of money and scam verbiage to persuade a lot of people to do something.” And as more and more individuals buy into the vision the ads are painting, the wealth of those crypto billionaires continues to grow.

“Never underestimate the power of a lot of money and scam verbiage to persuade a lot of people to do something.”

David Golumbia

What happens next in regulation will significantly shape the future of consumer crypto. Last year, Facebook shut down its nascent cryptocurrency—Diem, previously called Libra—after serious regulatory scrutiny. It will likely not be the last to go. Federal agencies have recently taken more-aggressive actions against some crypto exchanges for offering what they consider to be unlicensed investment products, and in October 2021, the US Department of Justice established a task force to look into how crypto markets were facilitating illegal activities like money laundering. In March, President Biden signed an executive order directing financial agencies to create a full regulatory strategy for crypto, and like many other nations, the US is looking into creating a regulated digital currency, called a CBDC (for “central-bank digital currency”). These are not cryptocurrencies at all but could offer similar levels of efficiency. Right now, many crypto exchanges try to limit volatility by using private stablecoins—a class of cryptocurrency pegged to a real asset like the dollar. If the US creates a CBDC, it might compete with those coins or even prompt the government to outlaw them entirely. FTX CEO Bankman-Fried himself predicts that the US Federal Reserve’s decisions will be the biggest drivers of the crypto market in the coming months of 2022. 

Still, regulation has its limitations, as we’ve seen in traditional banking. With so much money pouring into crypto and so many Silicon Valley power players invested in its success, the industry may find a way to flourish even with serious restrictions. Five years from now, Web3 startups may still be figuring out how crypto can be useful to regular people, but we are all likely to feel the environmental and societal effects of this tumultuous moment for a long time to come. 

---

While consumer crypto still resembles a pioneer town complete with gold panning and snake-oil dealers, the nonconsumer landscape presents a very different picture. Already, businesses such as corporate banking services, pharmaceutical giants, film development companies, and international shipping firms are using blockchains for transparency and efficiency. Such efforts could bring old, slow, and sometimes paper-based processes into the digital age, and even help industries meet new regulatory requirements.

Ripple, a company with more than 500 employees in nine offices worldwide, is one example. Like a much, much larger version of Paymobil’s crypto-powered money-transfer service, Ripple uses its own blockchain token as a bridge between currencies, allowing hundreds of corporate customers, including Bank of America, Santander, and Japan’s SBI Remit, to reduce operational costs caused by time zone differences and manual settlement processes. 

Contrary to the radical rhetoric of its crypto contemporaries, Ripple is using the speed afforded by digitized currencies to improve legacy banking processes, not replace them. In line with this reform-not-replace attitude, RippleX general manager Monica Long sees regulation and even CBDCs as a part of the evolution of blockchain for businesses—and finance operations more generally—over the next few years. “Customers and consumers alike will benefit from improved infrastructure, user experience, regulatory clarity, and interoperability as crypto becomes a critical element of the new normal in finance,” she says. 

The most industry-transforming use case so far—although perhaps the one with the least sizzle—might be the MediLedger Network and its custodian organization, Chronicled. In 2013, the US government passed the Drug Supply Chain Security Act, stating that by 2023 the pharma industry must create a digital system to track prescription medicine in order to prevent counterfeiting. Health care and the life sciences are notorious for ancient, non-interoperable systems, and the act’s requirements demanded an entirely new way of doing business. Chronicled’s CEO, Susanne Somerville, wondered if a private blockchain—a closed, permissioned system, unlike public blockchains such as Bitcoin—could offer a secure, shared environment in which pharma players like Pfizer and Gilead might work together. After years of working through business rules and goals, Chronicled launched the MediLedger Network, a group of major pharma companies, in 2019. Chronicled provides a range of services for them, like a spoof-proof index of verified product IDs and access to real-time public pricing updates. These narrow solutions may not be what people typically associate with blockchain technology, but they’re critical within pharma. “Almost everyone’s thinking of these super-lofty ideas, and it’s hard to get there,” says Somerville. “But there’s a lot of less sexy stuff that is actually foundational.” 

Ripple and MediLedger’s uses of the blockchain could mean safer drugs and faster money transfers for regular people, without requiring anyone to create a digital wallet or exchange coins. As for consumer crypto? If the industry’s deafening pitch for a financial revolution sounds too good to be true, that’s because it is. Until it can offer affordable, everyday uses for new coins and expansive protections against fraud and scams, we are all better off sticking with cash and traditional banking systems than joining the parade of crypto boosters marching across our screens and cities.

Rebecca Ackermann is a writer, designer, and artist based in San Francisco.

Correction: An earlier version of this story said that users can’t pay for purchases on PayPal with cryptocurrency. The story has been updated to reflect that purchases can be made with crypto on the platform, by first converting the coins to fiat currency.