Cryptocurrency can be difficult to understand. Industry jargon can be confusing, the fine points of blockchain and distributed ledger technology can overwhelm new users, and white papers describing the various layers of protocols and smart contracts are often extremely complex. Moreover, that complexity and the anxiety it spurs can breed misinformation, which can cause fear of cryptocurrency. 

The good news, though, is that concerns dissipate when people realize that crypto offers financial solutions that may be more efficient and less expensive and restrictive than those provided by traditional financial service companies. With MakerDAO’s Dai stablecoin and the Dai Savings Rate, people everywhere, regardless of income or financial history, can discover the advantages of digital cash and push their fears aside.

Some Fear of Cryptocurrency Is Born of Comparison

Cryptocurrency is intriguing. People are fascinated by the idea of it and want to know how it works, because of—or even despite—something they’ve heard or read. In their search for answers, they go down what’s commonly called “the crypto rabbit hole,” devouring bits of info that lead them to other bits of info, and so on and so forth. Some come out on the other side hooked; others hesitate, because digital money isn’t the type of cash they’re used to—it’s not issued by any government, some of it is extremely volatile, and the companies behind cryptocurrencies are new and absolutely nothing like traditional banks.

It’s easy to become crypto-weary and fall into the comparison trap. But, while learning the ins and outs of crypto and the blockchain can feel a lot like putting together a thousand-piece puzzle by candlelight, it might help to remember that the computerized systems behind bank wire transfers, investment accounts, and debit and credit cards are just as complex and, perhaps, more vexing, than blockchain-based crypto platforms. The thing is, people tend to trust —not question—what’s familiar.

Smarter Technology, Better Benefits 

New technology is often hard to grasp. Remember first learning the concept of email? In the same way that email technology offered an alternative way to communicate, blockchain technology provides alternative mediums of exchange and ways to transact. Yes, it’s difficult to understand now, but it won’t always be. Like email in the late 80s, it will eventually catch on because of its advantages.

New financial solutions, including digital currencies like the Dai stablecoin, combine the science of cryptography with software code and blockchain technology to enable users to exchange money quickly, inexpensively, and peer-to-peer, without any interference from a central party. With Dai and a crypto wallet to manage it, anyone, anywhere with an internet connection can transact across a table or across a border, 24/7. 

Using a crypto wallet to manage Dai is a lot like using a traditional mobile payment app. Dai holders can transact using a mobile phone, and those transactions show up in an app. But unlike a traditional payment app, no bank is involved in the transfer of money, and many crypto wallets offer built-in interest. So, even while your Dai sits in a wallet, it's earning the Dai Savings Rate (DSR), a variable rate determined by Maker governance, automatically.  

Nothing Scary About These Benefits

As the world’s first unbiased, decentralized currency soft-pegged to the US Dollar, Dai offers users plenty of advantages. Here are just a few:

Complete control of better money.  Some of the fear surrounding crypto comes from the incorrect notion that it isn’t real money. Digital money, especially a decentralized stablecoin such as Dai, isn’t only real money with real value; it’s actually a better money in the sense that it is designed to lack volatility and offers users full financial control. Decentralized, Dai is a borderless, global money that is not tied to any government or central entity. Users control their assets at all times.

Fast, convenient, and inexpensive fund transfers. Local and international cryptocurrency transfers are faster and less expensive than moving cash through banks or wire services. Sending money next door or across a border using traditional 9-to-5 services requires fund settlement with associated banks, which can take days in some cases. With blockchain technology, users download a digital wallet for Dai, and send any amount at any time of the day or night within minutes. Dai transactions usually settle immediately and at rates that are traditionally much lower than traditional services. 

A simple way to save. Dai holders can earn passive income through the Dai Savings Rate (DSR). Once users lock their Dai into DSR mode, they earn a percentage of their holdings, while still maintaining full control of their funds. Plus, with the DSR, there are no deposit or withdrawal limits.

Self-sovereign money generation. Anyone can buy Dai on various trading venues, including Oasis.app, but some people choose to generate Dai by locking Maker governance-approved collateral into a Maker Vault. To reclaim collateral, a user simply pays back the Dai generated, as well as a stability fee. 

The foundation of an ecosystem

The high utility of Dai is a direct result of the increased rate of Dai adoption around the world.  As the most used currency in the decentralized finance (DeFi) space, Dai is a building block on which developers build new financial products and services. Its open-source, composable infrastructure means that Dai-integrated dapps can be built on top of existing dapps, helping to grow a strong community and provide greater liquidity. Currently, there are over 600  Dai-integrated projects in the DeFi ecosystem.

Cryptocurrency Fear May Be Unfounded

As more people around the globe explore the many types of digital currencies and become aware of the benefits, fear of crypto will subside. Interest in Dai in particular will likely continue to increase, thanks to its stability, global appeal, and its crucial role in the DeFi and Maker ecosystems.

To learn more about Dai and MakerDAO, read the whitepaper and join discussions in the Maker Forum.