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You're still missing the forest for the trees. All of this was created in the last 2-3 years and already it's replicated most of what's in traditional finance.

You're still missing the forest for the trees. All of this was created in the last 2-3 years and already it's replicated most of what's in traditional finance. It's the rate of innovation that is important, not the current y-intercept. Furthermore this is a global system that anyone can contribute to. How hard do you think it is for I as an Australian to build a financial firm that interfaces with Bank of America or the NYSE? It's almost impossible. In DeFi I can spin up my own app in days. Aave is used for being able to borrow against your crypto assets, so if you need a loan you don't have to sell, this isn't a service any bank offers. You can also just deposit your assets and earn interest on them. In 2009 most of my colleagues similarly dismissed AWS "Oh it's just some easy storage with a way to spin up servers, big deal. Bare metal is cheaper and easier". It wasn't until most business components were automated that it became an obvious choice. Now imagine you're starting a new financial firm and want to offer an exchange, options, perpetuals, savings accounts, loans etc. You could build all these pieces yourself for a few million dollars and a few years work. Or you could use DeFi protocols, build a nice easy to use front-end and be up and running in a few months.

RandomLensman 4y ago
How do you see current regulations change to make this all fit, i.e., what's your roadmap there?
- TimJRobinson 4y ago
  That's unclear. From a game theory perspective you don't want to be the government that stifles your country by restricting access to a financial system everyone else adopts, so I think many are waiting to see how that plays out.
  - RandomLensman 4y ago
    I fear, if the DeFi community doesn't engage with policy makers and regulators it will not magically fall into place.
  - Nursie 4y ago
    This sort of nonsense thinking is exactly why governments have been such a soft touch and allowed scam after fraud after Ponzi after rug-pull to bloom. Fingers crossed that sort of time is over and the cryptocurrency space can be made to comply with regulations or be cut off from on-ramps.
  - deleted 4y ago
    [deleted]
noelsusman 4y ago
This just reinforces my view that the only value crypto provides is evading government financial regulations. Is it actually good that anybody can spin up a new financial firm in a few months with little oversight or regulation? >Aave is used for being able to borrow against your crypto assets, so if you need a loan you don't have to sell, this isn't a service any bank offers. Every bank offers this service, unless you're just talking about getting a loan with crypto as collateral.
- halpmeh 4y ago
  Have you ever implemented a smart contract? If not, I highly recommend you do so before holding an opinion on blockchains. I've never owned crypto, and I've recommended others to stay away from investing in crypto. Yet, I think the computing platform has a lot of promise. Implementing a smart contract for fun helped me see why. The block-chain can be thought of as cryptographically secure state. That is, everyone agrees on the state of the blockchain and no one can modify it save for modifications in accordance with the "rules". A smart contract can be thought of as a cryptographically secure program, i.e. it cannot be modified. So you have cryptographically secure inputs (the blockchain), and a cryptographically secure program (the smart contract), which means the output is also guaranteed to be cryptographically secure. That is quite a strong premise. You can give your program to anyone and they can execute it for you without you needing to worry about nefarious modifications. This level of trust allows for the creation of a global computing platform. Software authors need only to bring their program and can have it executed on-demand without needing to maintain their own infrastructure. That is quite an innovation. Of course, in its current form, this "global computing platform" is actually pretty shitty. It is prohibitively expensive to store / operate on a lot of data. However, crypto-currencies are there first viable "apps" built on this platform. If you think about it a crypto-currency is basically a very primitive program that stores a series of transactions as two addresses and an amount. The total amount of data per transaction is tiny. And yet, just by operating on this tiny amount of data you can basically implement the entire financial system: currency, stocks, bonds, options, etc. We're basically in the dot-com bubble for crypto. People are starting to realize that this new computing platform is cool and has a lot of potential, just as many realized the computers and the internet were cool in the late 90s. Yet, just like in the 90s, the tech sucks and isn't good enough to bring much of anything valuable to the market.
likeabbas 4y ago
> How hard do you think it is for I as an Australian to build a financial firm that interfaces with Bank of America or the NYSE? It's almost impossible. In DeFi I can spin up my own app in days This sounds nice in theory, but aren't most of the guard rails of the financial institutions for complying with government regulation? If anyone could interface with these companies then it would be too easy for abuse. USG is not going to let that happen, which is why these DeFi applications will be limited to unregulated cryptocurrencies where the user will have to trust the "bank" that has no Federal Reserve backing. > Aave is used for being able to borrow against your crypto assets... You can also just deposit your assets and earn interest on them. Why would any crypto supporter want to hold their decentralized currency in a centralized exchange after the FTX fiasco
- miracle2k 4y ago
  Aave is decentralised.
msworddebugger 4y ago
Permissionless means hizbulla or the Syrian regime can make revenue generating financial products just as easily as an Australian. As long as there is conflict (forever), permissionless systems will not be embraced by the global powers. There is potential for lower permissions within some sort of financial sandbox where there’s strong controls at the entrance to the system and strong auditing and logging within the system, but there’s no potential for a global permissionless system.
la64710 4y ago
I think there are still legalities to follow when you are offering anything to public with financial implications.
markdestouches 4y ago
>> You're still missing the forest for the trees. All of this was created in the last 2-3 years and already it's replicated most of what's in traditional finance. Making a copy of an existing technology while repeating every historical mistake on the way is not innovation but rather poor learning ability. It's been 13 years since the advent of blockchain and we are yet to see anything actually useful. Yet all we see is smuggling, money laundering and fraud. With stories like FTX we also see incredible ineptitude, incompetence and ignorance. I am so tired of seeing these same groundless arguments over and over again, especially now, once money got dear and all of the crypto started crashing down.
- timmytokyo 4y ago
  It's almost as if the "anyone can do it without permission" argument is one of the reasons traditional finance evolved into the regulated system it is today.
  - pjkundert 4y ago
    TradFi - Anyone can do it without permissions and lie, except regulations force accounting practices, revealing malfeasance. DeFi - Anyone can do it without permissions, and everyone can see they didn't lie. Crap-coin FTX Crypto Bros - Let's lie, do "TradFi" and call it "DeFi", comply with no regulations or accounting practices, and steal the Crypto. What could go wrong? HN low-research "Eternal September" Bros: Told ya Crypto was all a scam, yer dumb!
    - sangnoir 4y ago
      You're No-true-Scottsman'ing DeFi by excluding FTX after the fact. I posit there is no way to tell apart the "real" DeFi from the Crap-coins. If you can tell them apart, which tokens and/or exchanges will fail next, and when? There's a pervasive aura of "secret knowledge" in crypto, where the in-group think of themselves as superior operators who scoff as the noobs get fleeced[1]; yet these suave traders continually fail to recognize peaks and troughs and trade accordingly. 1. Sometimes while trying to scam the noobs themselves. The whole "to the moon"/HODL/meme-stock episode was naked preying on unsophisticated traders/bag-holders
JumpCrisscross 4y ago
> if you need a loan you don't have to sell, this isn't a service any bank offers I mean, the bank will make sure you aren’t North Korea first. Which crypto will not. So that’s a plus, if you’re North Korea. (Collateralised lending is incredibly commonplace in finance, including against crypto.)

RandomLensman 4y ago

How do you see current regulations change to make this all fit, i.e., what's your roadmap there?

TimJRobinson 4y ago
That's unclear. From a game theory perspective you don't want to be the government that stifles your country by restricting access to a financial system everyone else adopts, so I think many are waiting to see how that plays out.
- RandomLensman 4y ago
  I fear, if the DeFi community doesn't engage with policy makers and regulators it will not magically fall into place.
- Nursie 4y ago
  This sort of nonsense thinking is exactly why governments have been such a soft touch and allowed scam after fraud after Ponzi after rug-pull to bloom. Fingers crossed that sort of time is over and the cryptocurrency space can be made to comply with regulations or be cut off from on-ramps.
- deleted 4y ago
  [deleted]

noelsusman 4y ago

This just reinforces my view that the only value crypto provides is evading government financial regulations. Is it actually good that anybody can spin up a new financial firm in a few months with little oversight or regulation? >Aave is used for being able to borrow against your crypto assets, so if you need a loan you don't have to sell, this isn't a service any bank offers. Every bank offers this service, unless you're just talking about getting a loan with crypto as collateral.

halpmeh 4y ago
Have you ever implemented a smart contract? If not, I highly recommend you do so before holding an opinion on blockchains. I've never owned crypto, and I've recommended others to stay away from investing in crypto. Yet, I think the computing platform has a lot of promise. Implementing a smart contract for fun helped me see why. The block-chain can be thought of as cryptographically secure state. That is, everyone agrees on the state of the blockchain and no one can modify it save for modifications in accordance with the "rules". A smart contract can be thought of as a cryptographically secure program, i.e. it cannot be modified. So you have cryptographically secure inputs (the blockchain), and a cryptographically secure program (the smart contract), which means the output is also guaranteed to be cryptographically secure. That is quite a strong premise. You can give your program to anyone and they can execute it for you without you needing to worry about nefarious modifications. This level of trust allows for the creation of a global computing platform. Software authors need only to bring their program and can have it executed on-demand without needing to maintain their own infrastructure. That is quite an innovation. Of course, in its current form, this "global computing platform" is actually pretty shitty. It is prohibitively expensive to store / operate on a lot of data. However, crypto-currencies are there first viable "apps" built on this platform. If you think about it a crypto-currency is basically a very primitive program that stores a series of transactions as two addresses and an amount. The total amount of data per transaction is tiny. And yet, just by operating on this tiny amount of data you can basically implement the entire financial system: currency, stocks, bonds, options, etc. We're basically in the dot-com bubble for crypto. People are starting to realize that this new computing platform is cool and has a lot of potential, just as many realized the computers and the internet were cool in the late 90s. Yet, just like in the 90s, the tech sucks and isn't good enough to bring much of anything valuable to the market.

likeabbas 4y ago

> How hard do you think it is for I as an Australian to build a financial firm that interfaces with Bank of America or the NYSE? It's almost impossible. In DeFi I can spin up my own app in days This sounds nice in theory, but aren't most of the guard rails of the financial institutions for complying with government regulation? If anyone could interface with these companies then it would be too easy for abuse. USG is not going to let that happen, which is why these DeFi applications will be limited to unregulated cryptocurrencies where the user will have to trust the "bank" that has no Federal Reserve backing. > Aave is used for being able to borrow against your crypto assets... You can also just deposit your assets and earn interest on them. Why would any crypto supporter want to hold their decentralized currency in a centralized exchange after the FTX fiasco

miracle2k 4y ago
Aave is decentralised.

msworddebugger 4y ago

Permissionless means hizbulla or the Syrian regime can make revenue generating financial products just as easily as an Australian. As long as there is conflict (forever), permissionless systems will not be embraced by the global powers. There is potential for lower permissions within some sort of financial sandbox where there’s strong controls at the entrance to the system and strong auditing and logging within the system, but there’s no potential for a global permissionless system.

la64710 4y ago

I think there are still legalities to follow when you are offering anything to public with financial implications.

markdestouches 4y ago

>> You're still missing the forest for the trees. All of this was created in the last 2-3 years and already it's replicated most of what's in traditional finance. Making a copy of an existing technology while repeating every historical mistake on the way is not innovation but rather poor learning ability. It's been 13 years since the advent of blockchain and we are yet to see anything actually useful. Yet all we see is smuggling, money laundering and fraud. With stories like FTX we also see incredible ineptitude, incompetence and ignorance. I am so tired of seeing these same groundless arguments over and over again, especially now, once money got dear and all of the crypto started crashing down.

timmytokyo 4y ago
It's almost as if the "anyone can do it without permission" argument is one of the reasons traditional finance evolved into the regulated system it is today.
- pjkundert 4y ago
  TradFi - Anyone can do it without permissions and lie, except regulations force accounting practices, revealing malfeasance. DeFi - Anyone can do it without permissions, and everyone can see they didn't lie. Crap-coin FTX Crypto Bros - Let's lie, do "TradFi" and call it "DeFi", comply with no regulations or accounting practices, and steal the Crypto. What could go wrong? HN low-research "Eternal September" Bros: Told ya Crypto was all a scam, yer dumb!
  - sangnoir 4y ago
    You're No-true-Scottsman'ing DeFi by excluding FTX after the fact. I posit there is no way to tell apart the "real" DeFi from the Crap-coins. If you can tell them apart, which tokens and/or exchanges will fail next, and when? There's a pervasive aura of "secret knowledge" in crypto, where the in-group think of themselves as superior operators who scoff as the noobs get fleeced[1]; yet these suave traders continually fail to recognize peaks and troughs and trade accordingly. 1. Sometimes while trying to scam the noobs themselves. The whole "to the moon"/HODL/meme-stock episode was naked preying on unsophisticated traders/bag-holders

JumpCrisscross 4y ago

> if you need a loan you don't have to sell, this isn't a service any bank offers I mean, the bank will make sure you aren’t North Korea first. Which crypto will not. So that’s a plus, if you’re North Korea. (Collateralised lending is incredibly commonplace in finance, including against crypto.)