3 ms·

Your last paragraph exists in the form of margin loans and is already well utilized by savvy people.

latchkey 4y ago
Yes, however today, this is done in a centralized way. You have to ask for permission to get that loan. DeFi does this in a collateralized decentralized way. If I have bitcoin, I can borrow against that bitcoin without having to walk into a bank and fill out reams of paperwork.
- joneholland 4y ago
  Tell me you’ve never taken out a margin loan without telling me you’ve never taken out a margin loan. There is no paperwork. I can withdraw enough cash from my brokerage to buy a house through my phone and in only the time for an ach to post. Entirely collateralized by my assets. I regularly float 250k intraday for free through margin to support trading. You don’t need defi for this. The defi kids are reinventing traditional finance poorly one step at a time.
  - latchkey 4y ago
    Recently, as a long time customer, I got in on the Backblaze IPO. I had to open up a Fidelity account. In order to do so, I had to drive into a local office and fill out stacks of paperwork while a twenty-something kid watched me. There was no option to even gasp, fax it in. It sounds like you setup your brokerage account a long time ago and forgot about the paperwork. You see it as a bad thing, but I'm fine with "defi kids" re-inventing trad fi. Just like Uber did to the taxi industry... despite Uber being a shit company. The fact that I can already take out a loan against my bitcoin for a fraction of a cent in the span of a single transaction (seconds), without calling anyone, seems like it isn't so poorly done after all. That seems like some real progress.
  - landemva 4y ago
    That works for those living somewhere with good rule of law. I live in USA, so a letter crafted by IRS or child support enforcement to a financial institution is all that is needed to wrongly steal my funds. After my funds are stolen, it is difficult to fight back. Lack of rule of law.

Yes, however today, this is done in a centralized way. You have to ask for permission to get that loan. DeFi does this in a collateralized decentralized way. If I have bitcoin, I can borrow against that bitcoin without having to walk into a bank and fill out reams of paperwork.

joneholland 4y ago
Tell me you’ve never taken out a margin loan without telling me you’ve never taken out a margin loan. There is no paperwork. I can withdraw enough cash from my brokerage to buy a house through my phone and in only the time for an ach to post. Entirely collateralized by my assets. I regularly float 250k intraday for free through margin to support trading. You don’t need defi for this. The defi kids are reinventing traditional finance poorly one step at a time.
- latchkey 4y ago
  Recently, as a long time customer, I got in on the Backblaze IPO. I had to open up a Fidelity account. In order to do so, I had to drive into a local office and fill out stacks of paperwork while a twenty-something kid watched me. There was no option to even gasp, fax it in. It sounds like you setup your brokerage account a long time ago and forgot about the paperwork. You see it as a bad thing, but I'm fine with "defi kids" re-inventing trad fi. Just like Uber did to the taxi industry... despite Uber being a shit company. The fact that I can already take out a loan against my bitcoin for a fraction of a cent in the span of a single transaction (seconds), without calling anyone, seems like it isn't so poorly done after all. That seems like some real progress.
- landemva 4y ago
  That works for those living somewhere with good rule of law. I live in USA, so a letter crafted by IRS or child support enforcement to a financial institution is all that is needed to wrongly steal my funds. After my funds are stolen, it is difficult to fight back. Lack of rule of law.