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Decentralised finance is booming, but it has yet to find its purpose
- Havoc 5y agoThe fact that UK banks are aggressively blocking anyone interacting with crypto has in a way pursuaded me that defi is necessary. Banks telling us what we may or may not do with OUR hard earned cash is not OK.
- idlewords 5y agoWait until you discover taxes (or they discover you)!
- rajnathani 5y agoIt's not a necessary reason for DeFi as you can always choose a different bank not blocking crypto purchase.
- Tenoke 5y agoExcept multiple people in the UK switched banks for that reason only for their new bank to do the same later.
- Havoc 5y ago>you can always choose a different bank not blocking crypto purchase. Until there are none left. Reports on reddit suggest most are affected. Remember UK doesn't have a bunch of small regional banks like the US
- shafyy 5y agoBanks have been discriminating against certain behavior for a long long time. For example, I had to close my Swiss bank account (I'm Swiss) when I spent a lot of time in the US (no green card or residency there). I'm not out to defend traditional banks here, just saying that this is not something specific to crypto.
- hiq 5y ago> For example, I had to close my Swiss bank account (I'm Swiss) when I spent a lot of time in the US (no green card or residency there). For what reason? How did they know you were there?
- jcfrei 5y agoNot a very good example: The reason for this is most likely because of regulators (US and CH) which create such a huge compliance headache for US-associated customers that in most cases it isn't worth keeping the customer.
- shafyy 5y agoWell, they can make the same argument for crypto. They don't want customers who are trading a lot of crypto, because it might lead to regulatory headaches for them down the road.
- GDC7 5y agoBanks don't give a damn about you, if it was up to them they would let you do whatever , even paying for the stuff you could buy on the darknet. The huge problem is that they are subject to these things called laws and fines and government pressure.
- Havoc 5y agoRubbish. If it were a matter of laws all banks would be blocking it, not some sporadically.
- GDC7 5y agoDoes every motorist behave the same way on the road?
- bonestamp2 5y agoBanks are typically a little more disciplined about being compliant with the law than motorists.
- AmericanBlarney 5y agoAre you sure it's not regulatory? Banks don't typically cut off an industry unless they're either told to, or they're seeing extremely high fraud rates for a particular type of transaction (e.g. calling their credit card company claiming they didn't authorize that payment to Only fans)
- joelbondurant 5y agoWow, it's impressive to see 80% of HN doesn't understand the difference between Bitcoin and MySQL.
- 1cvmask 5y agohttps://archive.md/thlho https://archive.md/thlho
- tootahe45 5y agoThe purpose has been obvious for a while.. something to do with parting low income, technically illiterate men with their money while confusing them with technobabble.
- outside1234 5y agoAla Tether - https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether https://www.bloomberg.com/news/features/2021-10-07/crypto-my...
- hanniabu 5y agoMadoff - https://en.m.wikipedia.org/wiki/Madoff_investment_scandal https://en.m.wikipedia.org/wiki/Madoff_investment_scandal
- latchkey 5y agoThe concept of programmable open source money should be enticing for what has historically been a crowd of people who are into open source, development and technology. I guess we draw the line at money. I'm sad that we lost that crowd over the years and gained what seems to be angry old man yelling at tv screen.
- hanniabu 5y agoSame, it's quite sad reading these threads now. Even worse, they call it nothing but scams and speculation and give reasons that apply equally to traditional finance. I guess they aren't aware where the term ponzi scheme came from.
- playcache 5y agoIn tech circles there are a lot of folks who knew of the technology years ago when it was worth just a few dollars and now see it selling for 60k and are no doubt kicking themselves now. If I am honest, I know I am. I don't lose sleep over it, but I could be sitting on a lot of money right now if I had of acted back then.
- Aqueous 5y agoCan someone remind me what the purpose of conventional finance is again?
- coolspot 5y agoProvide resources (in form of capital) where they are needed and most efficient (generate RoI).
- latchkey 5y agoTo buy big houses, fancy cars and big yachts for people who are paid to make you fear money by telling you everything is risky and you should only keep your money with them. We've been believing that story for years.
- rib3ye 5y agoTo pay for debt by creating new debt and forcing spending before the currency loses purchasing power.
- throwaway2331 5y agoTo legitimize a pyramid scheme of an economy.
- kgin 5y agoA market-based way of allocating resources to new productive ventures and rewarding those who allocate the best.
- AussieWog93 5y agoA chain of responsibility. If someone tries to scam me, I can call the bank and get the transfer reversed. If someone robs me and steals my wallet, they can't empty my bank account. Convenience and simplicity (from the user's perspective) is a big factor too. Crypto exchanges solve this problem, but then we're back to square one in terms of trusting an institution, rent seeking etc.
- knaik94 5y agoI think a lasting application for blockchain tech has already come. Land registration on blockchain is not exciting enough to keep making the news but it's being slowly implemented around the world since before the pandemic cryptocurrency bubble. Rollout is slow so I personally don't know if it will reach the same kind of fame NFT has. But I imagine a government's point of view on a cryptographically verifiable way to associate a property with an individual owner and a transparent history of ownership and built in fraud protection is very positive.
- heyitsguay 5y agoCool, i just registered your address. Feel free to leave any furniture you don't want to keep.
- hanniabu 5y agoNot sure if this was just a joke or if you seriously think this is how it works
- heyitsguay 5y agoLess glibly, can you explain or point to references explaining how to solve this problem without relying on external identity verification services to confirm that a registrant is in fact that property owner? It seems like, if you have to do that, your records are more efficiently stored as a database with whatever authority is doing that verification.
- kgin 5y agoI think the joke is that a decentralized database doesn’t really solve any of the hard parts of knowing who owns what more that a sql database at the county records office. Establishing the real world legal realities of what those db records represent, centralized or decentralized, is still just as messy and difficult.
- knaik94 5y agoRegistered with who? This joke makes me think of the weird world of registering star names, from an organization that's not the International Astronomical Union. You might have potentially gotten scammed. Humans are the weakest link in any realistic security model.
- 1ark 5y agoOne purpose is to self govern and share the profits from trading, instead of giving banks and brokers those profits. That's already good enough.
- hanniabu 5y agoThat's still only one of many, but those that want to remain ignorant will continue to handwave, find some excuse to dismiss it, and go on reading articles from other ignorant people about how there's no purpose so they feel good about themselves.
- latchkey 5y agoDon't be so bitter. The more people in the pool, the more diluted all that fat interest gets. While it needs to grow, it is also a bit of fight club. Let it grow organically. The more that people throw shit against it, the stronger it gets. I wouldn't expect bitcoin to replace something as large as gold, without a huge fight. It has to win on its own merits. Really, it is the story of bitcoin from day one. Those who got in early got all the rewards. Those who didn't... well... will pay nearly any price for it.
- skybrian 5y agoConsidering that trades are now free at major brokerages, this doesn’t seem very interesting? (Meanwhile, trades on blockchains are often expensive.)
- 1ark 5y agoYes, trades on Ethereum and Bitcoin can be expensive, but there are other chains with subsecond finality and fees in cents. On a TradFi brokerage it is not possible to take part of in their market making. As your collateral is used for investing and not liquidity in the market making. Free? I only know of Robinhood and that's only for US, and you get frontrun anyway. If you are interested in holding equities only for value appreciation then I can understand DeFi not sounding that interesting. But if you are into saving, lending, leverage or market making then it should at least tickle curiosity.
- ramesh31 5y agoIt has plenty of purpose in facilitating organized crime. Regardless of what the technology is capable of at some point in the future, this is overwhelmingly the use case today.
- verdverm 5y agoI think that has changed to speculation in unregulated securities on unregulated exchanges.
- Tangokat 5y agoCitation needed? Cryptocurrency-related crime fell sharply in 2020 to just under $10 billion worth of total transaction volume. With non-illicit transactions also rising, just 0.34% of all cryptocurrency activity in 2020 was related to crime. [1] [1]https://go.chainalysis.com/2021-crypto-crime-part-1.html https://go.chainalysis.com/2021-crypto-crime-part-1.html
- w_TF 5y agoDefi protocols are incredibly powerful tools; the only thing preventing me from never using a bank again is not being able to pay for goods directly with stable coins. It's obvious the vast majority of people maligning them have never used them.
- jsemrau 5y agoThe on- and off-ramps into the cryptoverse are still really clunky. But I think we left the point of no return so it will only be a question of time until that is solved as well.
- latchkey 5y agoConsider this; other countries are more advanced than yours. While China offered a centralized solution to p2p payments, the concept of paying for everything digitally is already ingrained into their culture. Stable coins are not far off from that. Instead of getting a "cash rebate" by giving up all of our information to credit card companies (they are making a whole lot more than they are giving back), we should be collecting interest on our holdings and spending it more anonymously. Most people won't need credit when they have collateral. That seems like a more entertaining future.
- hanniabu 5y agoIt has nothing to do with digital. We could pay with credit cards and that's digital enough. The issue is the government seizing your assets, banks deciding to freeze your bank accounts, all the gatekeeping, all the rent seeking fees, all the institutional red tape, etc. For example if I wanted to take out a loan, it'd take me days to weeks, high interest rates, and may not even get approved. With defi I can take out a loan in just a few minutes, no permission needed. Also put aside your privilege and realize not everyone is in a first world country privy to the banking many take for granted.
- hermes8329 5y agoSo you get a loan and what if you just walk off with the cash? What piece am I misunderstanding that has enforcement for repayment?
- Vaderv 5y agoEven better the true decentralization of the internet is paramount, welcome to SIA / SC
- wyxuan 5y agoReal World Asset Financing as being explored by Centrifuge and MakerDAO is pretty interesting. Tapping into the yields and capital availability of DeFi to provide rates for trade financing (Harbor Trade), Revenue Based Financing (Fortunafi), etc. SocGen, the 3rd oldest French bank recently put up a loan request on the Maker forums for 20 mil backed by bonds iirc. exciting times!
- johnnyApplePRNG 5y agoSomewhat unrelated: Is curve.fi a ycombinator company? Or can anyone post job posts? [0] [0] https://news.ycombinator.com/from?site=curve.fi https://news.ycombinator.com/from?site=curve.fi
- deleted 5y ago[deleted]
- tacosbane 5y agoi believe that's called a "bubble"
- hammyhavoc 5y agoPop!
- kranke155 5y agoSaying DeFi is a bubble at this point is like calling Amazon a bubble in 2001. Yes the space is in a bubble but wake up - this has real users spending real money.
- Ekaros 5y agoOn what? What are they spending money on? How much physical goods or even equity in profit producing entities(outside crypto) there is?
- kranke155 5y agoYou’re just moving the goal posts around. “Show me real decentralised apps with users?” A. DeFi Q.”that’s just moving crypto around, what else?” A. NFTs Q. “That doesn’t count” You’ll keep doing this until X is on crypto making money. What’s the data point that would convince you ? Tell me honestly ? What is X where this sort of question stops making sense?
- echopurity 5y agoIs this cult magazine serious? The purpose of all finance is getting rich(er).
- IAmGraydon 5y agoAs wealth disparity rises, people increasingly seem to demonize “the man”…the embodiment of what they feel is holding them down. As such, companies, technologies and products that “stick it to the man” or reduce the influence of the institution are in a position to thrive. The surge in popularity of crypto is because it’s an outlet for this psychological phenomenon.
- GDC7 5y agoAnd there are 2 strains for it as well! Bitcoin is for those who blame and antagonize the government and the Fed, as well as the IRS. Ethereum is for those who blame and antagonize big platforms such as Facebook, Google, Youtube, but also JPMorgan, RobinHood, Bank of America.
- ZeroMinx 5y agoCould you explain (or source) this difference please? I don't recall seeing this type of grouping before.
- GDC7 5y agoIt's a social one. People who gravitate towards bitcoin are the Liberatian types, they are extremely scared of inflation, money printing, government overreach, they hate taxes, IRS, Customer due diligence laws, KYC etc. They think Bitcoin is the way towards techno-utopia and that the single, most impactful thing you can do to reach techno-utopia is to base the entire global financial system of on Bitcoin, so that its inherent scarcity, deflation, no-taxation and freedom would enable countless of positive externalities and effects downhill. People who gravitate towards Ethereum on the other hand are the Silicon Valley types: they don't have strong belief with regards to government , they don't spend too much time worrying about government at all. They spend time worrying about themselves and their surroundings. They are concerned with 2 things: 1) Escaping personal irrelevancy by creating products/services that people will use , but always within the framework of the government 2) Productively channel their inner hatred towards existing products/services, and I'd also add their personal hatred towards the successful creators/administrators (eg. Zuckerberg, Jamie Dimon, Vlad, Ken Griffin..). All that in order to convince themselves, their co-workers and most importantly the public that such old institutions not only can be disrupted, but need to be disrupted ASAP because they are evil, and their creators/administrators are evil, and if they are not disrupted they'd cause harm and spread evil.
- Salgat 5y agoThe biggest issue is that people underestimate how incredibly niche cryptocurrencies actually are. They solve one single issue, the double spending problem on truly anonymous transactions. For the vast majority of people, this isn't a problem they have. Smart contracts extend this functionality in novel ways, but the problem is still that the applications are incredibly niche. It's why people still use VISA or AliPay, it's why no Fortune 500 company relies on blockchains for its critical infrastructure, and why all major smart contract usage is related to either crypto exchanges, gambling, or more cryptocurrencies (such as ERC-20 based ones on the Ethereum blockchain).
- flarex 5y agoBlockchains solve the trusted intermediary problem which is far more general concept than double spending. It's also a common misconception that blockchains are anonymous; they are pseudoanonymous and there are companies devoted to de-anonymising and tying real world users to transactions. They do this quite successfully. There are ongoing efforts to completely anonymise computation and transactions on the blockchain using ZK snarks but most today are not using this. Also those use-cases you mention are the low hanging fruit, but as more time passes and the technology matures I expect to see a much broader range of uses for trust-less computation.
- c21h30o2 5y ago> crypto exchanges, gambling, or more cryptocurrencies (such as ERC-20 based ones on the Ethereum blockchain). These are the building blocks of more interesting stuff that will come later.
- babyshake 5y agoIt's just like the Protestant Reformation. DeFi is less about what it adds and more about what unnecessary intermediaries it removes.
- dehrmann 5y agoThat graphic with the ones and zeros as links in the chain is pretty clever.