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I think this is where insurance companies generally pop up as a solution. I.e. the same solution as with regular bank accounts. Layering humans on top of algori

I think this is where insurance companies generally pop up as a solution. I.e. the same solution as with regular bank accounts. Layering humans on top of algorithms makes sense. We already have SWIFT and networks layered under humans in the fiat system, so now we're just pushing more complex algorithms. In the case of block chains, I'd say the concept of asymmetric cryptography is an improvement over mutual trust in secure backoffice communication channels. I'm not into crypto (still thinking it's a solution waiting for a problem), but arguing that banks can do reversals isn't fair. Someone moving fiat quickly between banks will make it hard to reverse as well. I can't imagine a bank is going to just say "I guess they stole it from you, transferred it to us, but then withdrew from us. Let me go ahead and reimburse you anyway." That smells like a insurance case, no matter the underlying algorithms.

godot 5y ago
I'll actually try to add and defend crypto a little bit here: > I think this is where insurance companies generally pop up as a solution. Real legitimate DeFi protocols are now often supported by DeFi insurance as well. I know nothing about Axie Infinity and have no idea if this applies for them at all. > (still thinking it's a solution waiting for a problem) IMO, although this has been said many times the past few years, I think we're starting to get past this. In a very simplified view, DeFi protocols that do lending (e.g. loans based on collaterals), can do this fully automated, and it's because "the money is programmable" thanks to smart contracts and value stored. This type of lending took human work to do in TradFi and has overhead, in both costs and speed. I feel like this is the start of what real solutions/applications look like; it's something that wasn't possible before.

godot 5y ago

I'll actually try to add and defend crypto a little bit here: > I think this is where insurance companies generally pop up as a solution. Real legitimate DeFi protocols are now often supported by DeFi insurance as well. I know nothing about Axie Infinity and have no idea if this applies for them at all. > (still thinking it's a solution waiting for a problem) IMO, although this has been said many times the past few years, I think we're starting to get past this. In a very simplified view, DeFi protocols that do lending (e.g. loans based on collaterals), can do this fully automated, and it's because "the money is programmable" thanks to smart contracts and value stored. This type of lending took human work to do in TradFi and has overhead, in both costs and speed. I feel like this is the start of what real solutions/applications look like; it's something that wasn't possible before.