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With projects like blockfi, users get all the disadvantages of the centralized traditional financial system without any of the regulatory protections that have

With projects like blockfi, users get all the disadvantages of the centralized traditional financial system without any of the regulatory protections that have built up over centuries. Terrible for the people with assets in blockfi but extremely predictable. The point of defi is that you can use financial services without a centralized counterparty. People who can’t handle their own keys should be using traditional banks, at least until the technology is improved. Compare to Aave and other actually decentralized lending protocols which are not at risk of bankruptcy.

sdiacom 4y ago
Sure, but you can't use DeFi to trade fiat for crypto. You can use DeFi to trade crypto for crypto, or for crypto that pretends to be fiat. Saying "centralised exchanges bad, DeFi good" misses the point that the main use case of centralised exchanges is not covered by DeFi.
- rahen 4y ago
  > Sure, but you can't use DeFi to trade fiat for crypto. Of course you can, both ways. - https://bisq.network https://bisq.network - https://learn.robosats.com https://learn.robosats.com
  - f00zz 4y ago
    > - https://bisq.network https://bisq.network The last time I looked into this it required a security deposit in BTC.
  - ceejayoz 4y ago
    https://learn.robosats.com/docs/trade-pipeline/ https://learn.robosats.com/docs/trade-pipeline/ > On a private chat, Bob tells Alice how to send him fiat. https://learn.robosats.com/docs/payment-methods/ https://learn.robosats.com/docs/payment-methods/ > You can pay with any method that both you and your peer agree on. This includes the higher risk method such as PayPal, Venmo, and Cash apps. C'mon, that's not trading fiat for crypto. That's "PayPal me some money".
    - xnorswap 4y ago
      I love crypto! It's Decentralised! It's Trustless! De-fi is the future! Then it turns out that the promised future involves trusting someone to honour a paypal and pray you're not being scammed.
      - irusensei 4y ago
        Neither Robotsat or Bisq is that. The core functionality of these systems is to handle automated escrows.
    - bnralt 4y ago
      What's interesting is it seems they're only putting up a a 3% bond from what I can see [1]. So it looks like people could just take 97% of your money and run. Whenever a big exchange fails, we see a lot of people say "of course, this is why decentralization is better." But I'm not convinced people are less likely to lose money in decentralized exchanges. It seems like it would actually be easier, it's just that a bunch of small scale scams aren't going to get the same attention as a huge exchange collapsing. [1] https://bitcoinmagazine.com/business/robosats-private-bitcoin-exchange https://bitcoinmagazine.com/business/robosats-private-bitcoi...
  - fear-anger-hate 4y ago
    Bisq is a really impressive project. Upon first hearing about it I was a bit skeptical at how a decentralized peer to peer exchange would work in practice, but now that I've used it a few times with no issues, it really does seem like the best way to do fiat <--> crypto exchanges. Really hope that bisq and other similar services get the recognition they deserve now that the trust in cex's has taken a fall.
    - rahen 4y ago
      Bisq v2 is going to be an interesting release: https://github.com/bisq-network/bisq2/blob/main/docs/aims.md https://github.com/bisq-network/bisq2/blob/main/docs/aims.md They're currently a little short on manpower. If you're a Java dev, you might consider giving a hand.
- simple-thoughts 4y ago
  Blockfi isn’t primarily an exchange, it is a crypto lending platform. Centralized exchanges are a viable target for regulation as the state has the capacity to do so if it chooses to. But these regulated exchanges should never be holding your crypto on your behalf. It should be purely fiat for crypto with minimal custody. However it will be difficult for that regulation to occur as dark hybrid exchange-banks are benefitting key political actors.
- woah 4y ago
  You can, using stablecoins like USDC. These also involve counterparty risk, but they are extremely simple to audit and regulate.
  - ceejayoz 4y ago
    > they are extremely simple to audit Tether's audit has been promised since 2016. Still hasn't happened yet.
  - tootie 4y ago
    Stablecoins are cryptofiat. There's no compelling reason to use a stablecoin over using USD.
    - mrep 4y ago
      But transferring to stablecoins means you don't have a taxable event and thus don't have to pay cap gains /s
postalrat 4y ago
What's the cryptocurrency endgame? Everyone has keys in cold storage waiting for the day we have the mathematics that destroys them?
- simple-thoughts 4y ago
  Currently in development is decentralized social recovery systems. A lite version of this already exists with gnosis safes where one wallet has multiple key holders and n/m voting.
  - danuker 4y ago
    There are already multisig wallets, both Bitcoin and Ethereum. You do not need Gnosis for that.
- orangepurple 4y ago
  There is no end game. You use it in your daily life to obtain or achieve things then you die.
  - boringg 4y ago
    Don't you keep it in cold storage so three generations from now you offspring can bring it back out for significant wealth gains or alternatively a reminder of funny things humans do?
  - postalrat 4y ago
    Then the end game would be to be something useful that people use in their daily lives. I think that's what was meant when calling it digital currency. But now it's heading down a different path.
    - HashBasher 4y ago
      Having a savings account is not useful in daily life?
napolux 4y ago
it's fascinating how nobody learned from history. Banks and bankers have been heavily regulated as you said, "over centuries". Still today, we get lured by the same businesses (because all these lenders were just banks/financial operators) but without any of the safety nets we have in place when we work with "old school" banks.
- clintonb 4y ago
  Learning from history typically requires opening a book…
  - selectodude 4y ago
    Ah, but reading a book requires taking time away from “changing the world”.
- mattwilsonn888 4y ago
  It's really worse than you say the amount of ignorance it takes to store crypto in one of these institutions, when one of its motivating and zeitgeist driving features is that third parties are no longer the most secure method of storage.
- antod 4y ago
  The cynic in me thinks they did learn from history, and spotted a way to adapt the old scams to a new playing field. Much easier than coming up with brand new scams.

sdiacom 4y ago

Sure, but you can't use DeFi to trade fiat for crypto. You can use DeFi to trade crypto for crypto, or for crypto that pretends to be fiat. Saying "centralised exchanges bad, DeFi good" misses the point that the main use case of centralised exchanges is not covered by DeFi.

rahen 4y ago
> Sure, but you can't use DeFi to trade fiat for crypto. Of course you can, both ways. - https://bisq.network https://bisq.network - https://learn.robosats.com https://learn.robosats.com
- f00zz 4y ago
  > - https://bisq.network https://bisq.network The last time I looked into this it required a security deposit in BTC.
- ceejayoz 4y ago
  https://learn.robosats.com/docs/trade-pipeline/ https://learn.robosats.com/docs/trade-pipeline/ > On a private chat, Bob tells Alice how to send him fiat. https://learn.robosats.com/docs/payment-methods/ https://learn.robosats.com/docs/payment-methods/ > You can pay with any method that both you and your peer agree on. This includes the higher risk method such as PayPal, Venmo, and Cash apps. C'mon, that's not trading fiat for crypto. That's "PayPal me some money".
  - xnorswap 4y ago
    I love crypto! It's Decentralised! It's Trustless! De-fi is the future! Then it turns out that the promised future involves trusting someone to honour a paypal and pray you're not being scammed.
    - irusensei 4y ago
      Neither Robotsat or Bisq is that. The core functionality of these systems is to handle automated escrows.
  - bnralt 4y ago
    What's interesting is it seems they're only putting up a a 3% bond from what I can see [1]. So it looks like people could just take 97% of your money and run. Whenever a big exchange fails, we see a lot of people say "of course, this is why decentralization is better." But I'm not convinced people are less likely to lose money in decentralized exchanges. It seems like it would actually be easier, it's just that a bunch of small scale scams aren't going to get the same attention as a huge exchange collapsing. [1] https://bitcoinmagazine.com/business/robosats-private-bitcoin-exchange https://bitcoinmagazine.com/business/robosats-private-bitcoi...
- fear-anger-hate 4y ago
  Bisq is a really impressive project. Upon first hearing about it I was a bit skeptical at how a decentralized peer to peer exchange would work in practice, but now that I've used it a few times with no issues, it really does seem like the best way to do fiat <--> crypto exchanges. Really hope that bisq and other similar services get the recognition they deserve now that the trust in cex's has taken a fall.
  - rahen 4y ago
    Bisq v2 is going to be an interesting release: https://github.com/bisq-network/bisq2/blob/main/docs/aims.md https://github.com/bisq-network/bisq2/blob/main/docs/aims.md They're currently a little short on manpower. If you're a Java dev, you might consider giving a hand.
simple-thoughts 4y ago
Blockfi isn’t primarily an exchange, it is a crypto lending platform. Centralized exchanges are a viable target for regulation as the state has the capacity to do so if it chooses to. But these regulated exchanges should never be holding your crypto on your behalf. It should be purely fiat for crypto with minimal custody. However it will be difficult for that regulation to occur as dark hybrid exchange-banks are benefitting key political actors.
woah 4y ago
You can, using stablecoins like USDC. These also involve counterparty risk, but they are extremely simple to audit and regulate.
- ceejayoz 4y ago
  > they are extremely simple to audit Tether's audit has been promised since 2016. Still hasn't happened yet.
- tootie 4y ago
  Stablecoins are cryptofiat. There's no compelling reason to use a stablecoin over using USD.
  - mrep 4y ago
    But transferring to stablecoins means you don't have a taxable event and thus don't have to pay cap gains /s

postalrat 4y ago

What's the cryptocurrency endgame? Everyone has keys in cold storage waiting for the day we have the mathematics that destroys them?

simple-thoughts 4y ago
Currently in development is decentralized social recovery systems. A lite version of this already exists with gnosis safes where one wallet has multiple key holders and n/m voting.
- danuker 4y ago
  There are already multisig wallets, both Bitcoin and Ethereum. You do not need Gnosis for that.
orangepurple 4y ago
There is no end game. You use it in your daily life to obtain or achieve things then you die.
- boringg 4y ago
  Don't you keep it in cold storage so three generations from now you offspring can bring it back out for significant wealth gains or alternatively a reminder of funny things humans do?
- postalrat 4y ago
  Then the end game would be to be something useful that people use in their daily lives. I think that's what was meant when calling it digital currency. But now it's heading down a different path.
  - HashBasher 4y ago
    Having a savings account is not useful in daily life?

napolux 4y ago

it's fascinating how nobody learned from history. Banks and bankers have been heavily regulated as you said, "over centuries". Still today, we get lured by the same businesses (because all these lenders were just banks/financial operators) but without any of the safety nets we have in place when we work with "old school" banks.

clintonb 4y ago
Learning from history typically requires opening a book…
- selectodude 4y ago
  Ah, but reading a book requires taking time away from “changing the world”.
mattwilsonn888 4y ago
It's really worse than you say the amount of ignorance it takes to store crypto in one of these institutions, when one of its motivating and zeitgeist driving features is that third parties are no longer the most secure method of storage.
antod 4y ago
The cynic in me thinks they did learn from history, and spotted a way to adapt the old scams to a new playing field. Much easier than coming up with brand new scams.