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> How can crypto "restore trust"? Finance is incredibly opaque with a lot of rent-seekers taking a cut of transactions, and firms doing semi-illegal things but

> How can crypto "restore trust"? Finance is incredibly opaque with a lot of rent-seekers taking a cut of transactions, and firms doing semi-illegal things but realizing that the chance of them getting caught is slim and the fine is generally less than the profits they'll make. Decentralized Finance (DeFi) is almost completely transparent - all major smart contracts are open source and all transactions are made in public. Which gives people a lot more trust in the system as they can see what is going on. > How can it enable "new kinds of governance" - unless "new" means Plutocracy? Have a look at Decentralized Autonomous Organizations (DAO's). People hold tokens in the protocol, and then anyone can suggest changes as a Git Diff. The token holders vote on the change and if it's approved it gets merged into the protocol. Pretty cool democratic way to make changes to decentralized software without anyone getting special privileges. > How can any economic benefits be distributed when by definition cryptocurrency holders are accountable to no one? I assume they're talking about DeFi not caring about your nationality / sex / skin color / power. Everyone is on an equal participation playing field, and nobody is locked out from participating.

endisneigh 5y ago
> Finance is incredibly opaque with a lot of rent-seekers taking a cut of transactions, and firms doing semi-illegal things but realizing that the chance of them getting caught is slim and the fine is generally less than the profits they'll make. > Decentralized Finance (DeFi) is almost completely transparent - all major smart contracts are open source and all transactions are made in public. Which gives people a lot more trust in the system as they can see what is going on. You have yet to explain how crypto will prevent these semi-illegal things from occurring. Like you said "the fine is generally less than the profits they'll make." Also, cryptocurrencies are not inherently transparent, and said transparency can also be used for oppression. In any case, code is not perfect and smart contracts cannot override reality. I see little to be gained. Ultimately you either need existing government to uphold the true intent of a smart contract or subject laypeople to understand highly complicated smart contract code to know whether what they're getting into is legit. > Have a look at Decentralized Autonomous Organizations (DAO's). People hold tokens in the protocol, and then anyone can suggest changes as a Git Diff. The token holders vote on the change and if it's approved it gets merged into the protocol. Pretty cool democratic way to make changes to decentralized software without anyone getting special privileges. This is not democratic - you're describing a plutocracy. Is that what you want? > I assume they're talking about DeFi not caring about your nationality / sex / skin color / power. Everyone is on an equal participation playing field, and nobody is locked out from participating. This is not true, those who held crypto earlier will have more weight.
- clpm4j 5y ago
  "This is not true, those who held crypto earlier will have more weight." I think this is a really important and interesting point. The late majority and the laggards and the uneducated poor will be essentially shut out. They will likely never understand crypto on any meaningful level, and that might actually be a reason for them to cling to what they know for dear life.
- dangerface 5y ago
  > This is not democratic - you're describing a plutocracy. You don't know what a plutocracy is. Anyone who holds a token can vote they don't need to be wealthy. Poor voters can pool their votes to get a majority bigger than wealthy voters if wanted, this type of governance is called a democracy. > Ultimately you either need existing government to uphold the true intent of a smart contract or subject laypeople to understand highly complicated smart contract code to know whether what they're getting into is legit. By this logic paper contracts are also worthless because they also require a government to uphold and a lawyer to know whether what you are getting into is legit. Obviously having these paper contracts in a standardised way thats public is a gain to society, when we do that we call them smart contracts. > This is not true, those who held crypto earlier will have more weight. This is not true, early investors will have more crypto, this is the reward for investing early, the risk is that your millions of doge are worthless. This is just standard economics and investing. I am sorry if you thought crypto currency was going to bring about the communist utopia but its just a better form of capitalism, which is a good thing if you live in a capitalist country.
  - endisneigh 5y ago
    > You don't know what a plutocracy is. Anyone who holds a token can vote they don't need to be wealthy. Poor voters can pool their votes to get a majority bigger than wealthy voters if wanted, this type of governance is called a democracy. How do you receive tokens? One person, one token? No? Then it's not a democracy. Give me a break. > By this logic paper contracts are also worthless because they also require a government to uphold and a lawyer to know whether what you are getting into is legit. > Obviously having these paper contracts in a standardised way thats public is a gain to society, when we do that we call them smart contracts. Oh god - smart contracts are not the same thing as "standardised paper contracts." Existing contracts are not worthless because it's the intent that matters, not what the actual contract says, unlike a smart contract. > This is not true, early investors will have more crypto, this is the reward for investing early, the risk is that your millions of doge are worthless. This is just standard economics and investing. There's no risk because you can simply mint more coins for free. The people who created the currency took no risk in holding. > I am sorry if you thought crypto currency was going to bring about the communist utopia but its just a better form of capitalism, which is a good thing if you live in a capitalist country. lol, ok.
leifg 5y ago
> Decentralized Finance (DeFi) is almost completely transparent - all major smart contracts are open source and all transactions are made in public. Which gives people a lot more trust in the system as they can see what is going on. Yet we have an almost endless list of people being cheated out of their money (countless stories of people/exchanges losing their private keys, pump and dump schemes left and right, not to mention the lawsuits against Tether)
epistasis 5y ago
> Decentralized Finance (DeFi) is almost completely transparent - all major smart contracts are open source and all transactions are made in public. I think this is a very important point, but it's also missing some of the picture. DeFi could potentially make instituting things like a wealth tax much easier. If the crypto network is set up for it, all transactions are seen by everyone. However I think any individual coin with widespread adoption will soon move away from this sort of complete transparency. Lightning networks will decrease the visibility into the transaction stream. And these sorts of networks end up acting like banks on their own, as more centralized points of power and knowledge. And though it seems like there's no shadowy governing board like the Fed in the crypto world, these governance structures are still there, just even less visible than the Fed. Who decides the conflicts between the miners and the holders of the Bitcoin software network? It was not long ago that there were big fights about this, and because the governance is not public, the entire debate was extremely paranoid and conspiratorial. Strcturelessness of governance does not mean that there is no governance, that there is no hierarchy in who decides the basic rules of the crypto network, it's just means that fewer people understand how power flows when making decisions and changes to the networks.

endisneigh 5y ago

> Finance is incredibly opaque with a lot of rent-seekers taking a cut of transactions, and firms doing semi-illegal things but realizing that the chance of them getting caught is slim and the fine is generally less than the profits they'll make. > Decentralized Finance (DeFi) is almost completely transparent - all major smart contracts are open source and all transactions are made in public. Which gives people a lot more trust in the system as they can see what is going on. You have yet to explain how crypto will prevent these semi-illegal things from occurring. Like you said "the fine is generally less than the profits they'll make." Also, cryptocurrencies are not inherently transparent, and said transparency can also be used for oppression. In any case, code is not perfect and smart contracts cannot override reality. I see little to be gained. Ultimately you either need existing government to uphold the true intent of a smart contract or subject laypeople to understand highly complicated smart contract code to know whether what they're getting into is legit. > Have a look at Decentralized Autonomous Organizations (DAO's). People hold tokens in the protocol, and then anyone can suggest changes as a Git Diff. The token holders vote on the change and if it's approved it gets merged into the protocol. Pretty cool democratic way to make changes to decentralized software without anyone getting special privileges. This is not democratic - you're describing a plutocracy. Is that what you want? > I assume they're talking about DeFi not caring about your nationality / sex / skin color / power. Everyone is on an equal participation playing field, and nobody is locked out from participating. This is not true, those who held crypto earlier will have more weight.

clpm4j 5y ago
"This is not true, those who held crypto earlier will have more weight." I think this is a really important and interesting point. The late majority and the laggards and the uneducated poor will be essentially shut out. They will likely never understand crypto on any meaningful level, and that might actually be a reason for them to cling to what they know for dear life.
dangerface 5y ago
> This is not democratic - you're describing a plutocracy. You don't know what a plutocracy is. Anyone who holds a token can vote they don't need to be wealthy. Poor voters can pool their votes to get a majority bigger than wealthy voters if wanted, this type of governance is called a democracy. > Ultimately you either need existing government to uphold the true intent of a smart contract or subject laypeople to understand highly complicated smart contract code to know whether what they're getting into is legit. By this logic paper contracts are also worthless because they also require a government to uphold and a lawyer to know whether what you are getting into is legit. Obviously having these paper contracts in a standardised way thats public is a gain to society, when we do that we call them smart contracts. > This is not true, those who held crypto earlier will have more weight. This is not true, early investors will have more crypto, this is the reward for investing early, the risk is that your millions of doge are worthless. This is just standard economics and investing. I am sorry if you thought crypto currency was going to bring about the communist utopia but its just a better form of capitalism, which is a good thing if you live in a capitalist country.
- endisneigh 5y ago
  > You don't know what a plutocracy is. Anyone who holds a token can vote they don't need to be wealthy. Poor voters can pool their votes to get a majority bigger than wealthy voters if wanted, this type of governance is called a democracy. How do you receive tokens? One person, one token? No? Then it's not a democracy. Give me a break. > By this logic paper contracts are also worthless because they also require a government to uphold and a lawyer to know whether what you are getting into is legit. > Obviously having these paper contracts in a standardised way thats public is a gain to society, when we do that we call them smart contracts. Oh god - smart contracts are not the same thing as "standardised paper contracts." Existing contracts are not worthless because it's the intent that matters, not what the actual contract says, unlike a smart contract. > This is not true, early investors will have more crypto, this is the reward for investing early, the risk is that your millions of doge are worthless. This is just standard economics and investing. There's no risk because you can simply mint more coins for free. The people who created the currency took no risk in holding. > I am sorry if you thought crypto currency was going to bring about the communist utopia but its just a better form of capitalism, which is a good thing if you live in a capitalist country. lol, ok.

leifg 5y ago

> Decentralized Finance (DeFi) is almost completely transparent - all major smart contracts are open source and all transactions are made in public. Which gives people a lot more trust in the system as they can see what is going on. Yet we have an almost endless list of people being cheated out of their money (countless stories of people/exchanges losing their private keys, pump and dump schemes left and right, not to mention the lawsuits against Tether)

epistasis 5y ago

> Decentralized Finance (DeFi) is almost completely transparent - all major smart contracts are open source and all transactions are made in public. I think this is a very important point, but it's also missing some of the picture. DeFi could potentially make instituting things like a wealth tax much easier. If the crypto network is set up for it, all transactions are seen by everyone. However I think any individual coin with widespread adoption will soon move away from this sort of complete transparency. Lightning networks will decrease the visibility into the transaction stream. And these sorts of networks end up acting like banks on their own, as more centralized points of power and knowledge. And though it seems like there's no shadowy governing board like the Fed in the crypto world, these governance structures are still there, just even less visible than the Fed. Who decides the conflicts between the miners and the holders of the Bitcoin software network? It was not long ago that there were big fights about this, and because the governance is not public, the entire debate was extremely paranoid and conspiratorial. Strcturelessness of governance does not mean that there is no governance, that there is no hierarchy in who decides the basic rules of the crypto network, it's just means that fewer people understand how power flows when making decisions and changes to the networks.