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I think you are confusing crypto with the layers on top of it. Lending via crypto is a dubious practice as it needs to tie into the physical world. Interest b
by psychlops 4y ago
I think you are confusing crypto with the layers on top of it. Lending via crypto is a dubious practice as it needs to tie into the physical world. Interest being paid on loans is an aspect of finance that some areas of crypto are recreating and failing at miserably, as they should, for obvious reasons.
- JohnFen 4y ago> Lending via crypto is a dubious practice as it needs to tie into the physical world. But if cryptocurrency is to be anything of actual value, it must tie into the physical world at some point, even if loans don't exist.
- psychlops 4y agoOkay, eventually it must...depending on the form. In it's current implementation being sold, it won't work. Lending to generate income relies on a mature legal system to back up contractual demands. Crypto itself (an algorithm) cannot guarantee repayment of loans. "Exchanges" try to bridge this gap and counterparty risk isn't properly priced in. If anything, the high interest payments aren't high enough to represent risk.
- kayamon 4y agoAlgorithms that can control their own energy usage and energy price can leak out into the real world.