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> The technology will have to develop more to truly compete, but I believe most of finance will transition to crypto rails over the coming 20 years. Why, from

> The technology will have to develop more to truly compete, but I believe most of finance will transition to crypto rails over the coming 20 years. Why, from the perspective of we "just got done" recently making banking + Apple Pay + Stripe + all those sorts of things "really good" Why would we transition away from 'what currently works' for something that will be about the same/equal/maybe slightly worse? In what way would a crypto transition for actual finance be better than what we have today? It depends on who/what you ask. When I think crypto finance I think of: * will every transaction be publicly traceable? Who is this good/bad for? We don't currently have that today. * will governments really be ok sitting by the wayside + not getting involved and letting their currency take a back seat? Aren't there talks of governments getting into crypto themselves in "stablecoins"? Will it just be another extra layer in the soup/sea of finance processing where it's a wrapper around/from fiat?

monero-xmr 3y ago
Major change from tradfi to defi is that the assets are bearer instruments. There are absolutely tradeoffs here. From the perspective of a merchant, settlement upon receipt is an excellent thing, because chargebacks and related fraud are zero. It's not that you don't have to give refunds or give money back, but it isn't automatic. I would argue this is an improvement because businesses are long-lived institutions that build reputation, while customers are flighty and 1st time customers are common. So flipping the risk of fraud from the consumer to the merchant is logical. From the perspective of the consumer, there is higher risk of fraud meaning you won't get your money back, plus the risk of losing your keys, but on the plus the government can't arbitrary freeze your funds (unless using a centralized provider or coin that enables this). As I said previously, I still think this is a net-benefit to commerce even with the reduction in consumer power. For international funds transfers from the developed world to developing countries, the benefits of instant transfer and settlement of funds makes commerce much easier. The costs, risks, and time for this is high. There are legitimate innovations in defi that are improvements to tradfi. Flash loans, where loans can be received and paid back in a single fill-or-kill transaction, is a unique benefit that was not possible pre-crypto. Automatic market makers (AMMs) pioneered by Uniswap, where a market maker is passive and earning fees without needing servers that manage a limit order book, are very useful (especially for retail) and I think would be a nice backport to tradfi (but the SEC would never, ever let this happen). Non-fungible tokens could be used for one-off instruments that have low liquidity but high market participation - like bonds - and then wrapped in fungible tokens in order to make providing bond market liquidity much easier. While Blur is only for trading scammy NFTs (https://blur.io/ https://blur.io/) there is no reason their pioneering tech in the space can't be used for real financial instruments. Governments are like the mafia - they want to be paid a tax on every economic transaction, and in return they provide protection. As long as the government is collecting its share of capital gains and sales tax, they will become addicted to the cash flow and allow it. That's actually what they already do, except with the occasional flare up of chatter to ban crypto entirely, but that happens much more often now in developing countries like India and Nigeria.

monero-xmr 3y ago

Major change from tradfi to defi is that the assets are bearer instruments. There are absolutely tradeoffs here. From the perspective of a merchant, settlement upon receipt is an excellent thing, because chargebacks and related fraud are zero. It's not that you don't have to give refunds or give money back, but it isn't automatic. I would argue this is an improvement because businesses are long-lived institutions that build reputation, while customers are flighty and 1st time customers are common. So flipping the risk of fraud from the consumer to the merchant is logical. From the perspective of the consumer, there is higher risk of fraud meaning you won't get your money back, plus the risk of losing your keys, but on the plus the government can't arbitrary freeze your funds (unless using a centralized provider or coin that enables this). As I said previously, I still think this is a net-benefit to commerce even with the reduction in consumer power. For international funds transfers from the developed world to developing countries, the benefits of instant transfer and settlement of funds makes commerce much easier. The costs, risks, and time for this is high. There are legitimate innovations in defi that are improvements to tradfi. Flash loans, where loans can be received and paid back in a single fill-or-kill transaction, is a unique benefit that was not possible pre-crypto. Automatic market makers (AMMs) pioneered by Uniswap, where a market maker is passive and earning fees without needing servers that manage a limit order book, are very useful (especially for retail) and I think would be a nice backport to tradfi (but the SEC would never, ever let this happen). Non-fungible tokens could be used for one-off instruments that have low liquidity but high market participation - like bonds - and then wrapped in fungible tokens in order to make providing bond market liquidity much easier. While Blur is only for trading scammy NFTs (https://blur.io/ https://blur.io/) there is no reason their pioneering tech in the space can't be used for real financial instruments. Governments are like the mafia - they want to be paid a tax on every economic transaction, and in return they provide protection. As long as the government is collecting its share of capital gains and sales tax, they will become addicted to the cash flow and allow it. That's actually what they already do, except with the occasional flare up of chatter to ban crypto entirely, but that happens much more often now in developing countries like India and Nigeria.