Decentralized Finance Is The Future

In spite of all the attacks, the latest by Elizabeth "Pocahontas" Warren, cryptocurrency is forging ahead. This week, we all witnessed the news coming out of El Salvador as the President of that country throws its hat into the crypto ring.

To the critics discontent, the industry keeps expanding a great deal. This is something that is providing the foundation for a completely new way of transacting.

At the core of this is the use case of Decentralized Finance. DeFi, as it is known, is really expanding. Keeping in mind that it really only started to gain traction in 2020, the rate of acceleration is very impressive. Certainly, there are setbacks with rug pulls and an assortment of nefarious activities. However, in the end, it will win out.

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Would you go back to drive to the store to rent videos? In fact, would you want to return to a horse and carriage days?

The answer by almost everyone is no. Of course we would not want to go back to those old ways. The reason for this is the newer innovations are simply better ways of doing things.

Few would argue the importance of the automobile. At the same time, while not on the magnitude, streaming is much better than the old video cassette rental industry. Who wants to spend $7 for a couple videos when, for a few bucks more to an outfit like Netflix, one can watch thousands of hours of content?

Decentralized Finance is simply a better way of doing things. It is a technological advancement that is probably not at the level of the automobile but does rank higher than the innovation we know as streaming. This is going to change billions of lives across the planet.

The key benefit to DeFi is that it allows for financial services without the use of intermediaries. This is crucial. Right now the financial system is stacked with gatekeepers. They are the ones who decide who is involved while excluding those whom they want.

For this service, there is a large amount of money extracted from the system. The return, for society, is not that great. Once established, the companies operate on autopilot, collecting fees for an automated process.

DeFi does away with all of this. Instead, it allows for software to oversee all transactions (something that the intermediaries utilize for the most part anyway), providing open platforms for people to use.

Much of the criticism of DeFi, as well as crypto, is that it allows for people to operate without regulation. Many fear this will only increase the fragility of the system. This is a viable complaint as we saw with some the shenanigans that people are engaging upon.

However, we have to be careful about drawing these types of conclusions too soon. All technologies has a potentially negative side. The Internet was one of the biggest breakthroughs for humanity yet there are a lot of negatives to it. That said, I don't think anyone would say the world would be better off without the Internet.

Crypto in general is a lot of speculation at the moment. This is a phase we simply need to go through. It is similar to the Internet in the dotcom era. The difference there was that the speculation and users were separated. Those engaging in the speculation were in the market while the users were on the different websites.

Here they are one. There is no way to separate the users of this technology from the speculation. Simply by utilizing most of the platforms, one is involved in cryptocurrency. We also see DeFi showing up everywhere, even if it is just a staking mechanism.

Present flaws aside, it is hard to argue that DeFi does not offer the potential for a completely different financial system that is better than what we are utilizing now. Just like streaming and the automobile, this innovation will improve society while making people's lives easier.

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When this was the situation with the automobile, it was hard to see where that technology would eventually lead. Needless to say, the mindset was not on change but rather, how to keep most things the same.

This is exactly what the critics of cryptocurrency and DeFi are doing. They are looking at this new innovation and saying "wait, we need someone in front of it with a flag to warn everyone". As absurd as this seems today with the automobile, it is equally so with DeFi.

We are in the process of seeing infrastructure built out. This is going to be a big step forward. As more financial services are offered in this arena, the use cases will explode. That means the transaction value will climb at an accelerating rate.

Each day this is going to eat into what the present system does. While the elimination of the intermediaries will not happen overnight, just like horses were around for a long time, they will diminish in usefulness. Cryptocurrency is rapidly becoming its own entity with people's holdings expanding on a weekly basis.

The first stage is to pull most of the online transacting world under this umbrella. Cryptocurrency was formed in the digital arena so that is the initial place to dominate.

There will come a time, however, where the entire financial process is linked into DeFi. Activities such as getting a mortgage and car loan will be as accessible as signing up for yield farming. We will likely see many platforms offering those services as people look to lend out their crypto for a return.

Of course, this is all being written with the mindset of what is known. There will be a number of innovations over the next few years that will completely baffle us. People are constantly thinking of different ways to advance this arena. Therefore, it is likely we have platforms down the road which are far advanced as compared to what is offered in DeFi now.

Cryptocurrency is a technology. This is something that is important to remember. Sure it applies to the financial arena but it is still subject to the same advancement curves as other technologies. DeFi could be considered the biggest use case for cryptocurrency. Eventually it will lead from purely a speculative environment to one where we see a plethora of financial services needed that solve problems in people's lives.

More than 100 years ago, there were some saying that the automobile was the future. However, as we know, there were many who were also screaming for "faster horses".

DeFi is akin to the automobile while people like Senator Warren are screaming for ways to keep the system the same. In the end, just like the horse, the likes of Warren will lose out.

Sometimes it is easy to see the future before us and with all the expansion in DeFi, we know generally where this is going.


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Who wants to spend $7 for a couple videos when, for a few bucks more to an outfit like Netflix, one can watch thousands of hours of content?

Who wants to spend any amount of money, when you can download almost everything/anything with torrent for free?

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I had an indian supervisor once, he was using pirate streaming, because if people really want what their content is consumed, there would something which provide all content from any provider/artist.
Good thinking but how apply the Pareto principle in that szenario.

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That is true. The internet certainly pushes the cost of stuff way down. However, many either arent aware of that or do not want to take the chance of being caught.

Of course, the Internet is making IP and copyright laws very difficult. We could see them basically obliterated during the rest of this decade.

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I dont download, its just too much effort when Netflix is this cheap x)

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Bang, I did it again... I just rehived your post!
Week 60 of my contest just started...you can now check the winners of the previous week!
!BEER
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The DeFi cat is out of the bag and there's no going back! fun part is the majority of the planet have no idea what they're in for.

I think one of the most powerful aspects of DeFi that many aren't talking about nearly enough is composability. I know Khal has mentioned this occasionally alongside the development of LEO ecosystem, the guy in on his game.

Composability (service oriented software architecture) is truly revolutionary in that people are now building protocols designed to be used alongside other protocols. Next-generation financial products are being built with the ability to share value and functionality, while eliminated need for 3rd party intermediaries. A thing of beauty.

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That is true. The thing about composability is that it increases the velocity of things. This is from a computer/IT standpoint but it applies to innovations. When you have a pool of resources that are not workload specific, many things can quickly be built on top of it to provide what is needed.

In the financial arena, who knows what this will all develop into. The key is the infrastructure will be available (or quickly can be generated) to meet the needs of any community. Quick spinning out of products as needs are identified will radically change things.

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Interesante la información, cuando tenemos desconocimiento de las cosas decimos y hacemos porque no comprendemos, gracias por compartir.

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The banks last big attack... it looks like they are scared...

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I think the future of DEFI is certain - The trick is figuring out which blockchain(s) are going to survive and thrive.

Personally I wouldn't bet against ETH in the long term, or Rune and some of the other 'smaller' alternatives - I have this feeling BSC's days are numbered, if that's even DEFI, personally I don't think it even counts!

I actually kind of miss Blockbusters you know!

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Well, blockbuster was next to Baskin Robbins, and whoever went with Mom to pick out movies got that or some Nachos from 7 Eleven. But still... even Crackle is more convenient.

Why do you thing BSC day's are numbered?

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Yup that's Blockbuster.

BSC is centralised basically, I think actual DEFI will win out in the end! It's popular now because it's cheap!

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Thank you for this article.

I get inpatient and forget that Defi can mean car loans, and mortgages. It is just a little baby, and we must keep feeding it and nurturing it.

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"Much of the criticism of DeFi, as well as crypto, is that it allows for people to operate without regulation. Many fear this will only increase the fragility of the system. This is a viable complaint as we saw with some the shenanigans that people are engaging upon."

I have all these things happen in my life and examples that i relate to other areas. I guess in this case i can relate one such example to defi. A plumber guy i knew who had been battling drug addiction over the years and went clean many years but got back using told me about how he felt the state and regulatory bodies should be involved with his drug use.

He believed that a person should be able to use drugs if like in his case they knew exactly how much drugs their body needed. So i engaged in the conversation and asked him how is it that he can determine exactly how much drugs he can take. Well like many people who are free spirited and believe they know better he stated he knew his body and felt he was more qualified to make the call in that it was his body.

So a week later not far from my home a person was found overdosed on drugs under a bridge. The first person came to mind was him. Sure enough it was him. He was dead and gone from a drug overdose. Clearly defi is not going to kill everybody but i find it interesting that there exist so many similar trains of thought. For example in areas like cryptocurrency. You hear alot of the people should do whatever they want spend their money however they want without regulation. It's holding people back.. let them do it.

So we let them do it.. They go out and invest in bitconnect and scammy fradulent nfts and pyramid schemes and defi's pump and dump to unsustainable prices. The problem is we don't take the "L" lol. When that happens the first thing everyone wants to do is get the authorities and prosecute everyone to the fullest extent of the law. Nobody goes if given the option to get their money back with authorities.. Let's just let it pass we'll deal with this internally. They don't do that and they aren't going to do that. So then what becomes the solution to that?

So when i was at my investment firm i remember constantly being on the side of the argument of don't allow regulation to stop people from investing in securities although just like in crypto that was happening there as well. People were investing in some high risk projects with very little info provided. Due to regulation the only ones really losing their shirts were the ones who could afford it or said they could.

Anyway i came to the conclusion that not everything has to be an either or situation. The idea of decentralization and consensus.. governance are all very broad ideas. There is no such thing as decentralization in the terms we think of it. I think bitcoin is probably one of the most centralized assets on the planet. The network is centralized in the form of wealth with 87% owned by 1%, by miners.. by development teams.. by exchanges etc., it's just such a misunderstood idea.

I created a distribution system with a special algorithim. So developers want to see what's under the hood. I told them no they can not. Interesting enough pi network created a project that has to date 18 million users a ton more than hive because they understand their market and they understand the end user. They understand what people want and need.

Both projects aren't allowing the space to see their code. My project and the Pi network. Now its a reason i'm saying all this. I say that to say this. To the space this means its not a decentralized project because they can't clone the code or they don't trust the team. However i think thats partly where the problem lies that we feel the idea of decentralization or cutting out the middle man . counterparty risk is our ultimate problem.

I think that can be a hinderance to the space. The thing is everything doesn't have to be A or B.. black or white. You can have hybrid systems that may have to allow for some trade offs but are quite efficient models and models with pretty good security.

Whereas it is true that Pi and Btcmyk can be looked at in some instances as not even being cryptos or being a hybrid. I'd probably call btcmyk a hybrid because the tokens occur on chains that follow the code. Whereas with Pi its their chain you can't see the code etc.,

So my overall point is saying something like defi cuts out the counterparty risk and that solves the problem. I think its so much more complex than that. The problem with defi is there is no way to educate people on its use.. it goes back to the plumber and his drug addiction should he have the right to engage in a dangerous activity for freedom sake and liberty. Maybe so, or maybe we're always going to have need of some process where people have to be looked after. Now as far as regulation and investment here's what i'd look for personally.

So when you're dealing with investments they require certain networth and financial literacy or i know in my business we'd not open the account as we were a more prestigious and reputable firm. however i would have suggested that we allow anyone to invest provided they showed certain levels of literacy. Now i know thats still decided by, whomever and maybe to that degree that could be put on a chain and decided.

In the Btcmyk model as it may be accurate to say it is a hybrid and there is some trust in the onboarding interface. I would move to say that unlike standard cryptos btcmyk platform is a system that you can't buy the tokens on the system and they are only earned through your merit. So there is risk to you but it is not financial risk. This is more similar to EOS voice in that we recognize that as soon as you allow a network to be bought that you can't have decentralization in any shape or form in my opinion. So i think voice had that right and i think btcmyk has that right. I think all this is relevant because we know how people want things both ways. They want freedom from regulation but they also want people to be held accountable for their actions. So a ton of uneducated people jumping into defi projects started by random people and required to buy this token to participate unlike us.. Well we know thats going to create alot of disaster. Now do we come out of the disaster with a defi product that works. Maybe.. or maybe it never works.. maybe we don't even use pow.. or pos in the future.

There are so many ideas for governance and consensus on the chain. Some use lottery systems or systems like you all use where the people with the most money buy the most of the network and people like Vitalik don't like it because he sees it as a security risk. There are so many ideas though about how to address this.. i stilll think the lottery method is one of the best. The lottery method you can't game it and its hard to make it less than equal and create stigmas i believe that will be the death of many chains.

So in conclusion many chains have come up with ideas that i think in the future will not only solve many issues but that the people once they become more educated wiill flock to. For example although electroneum has performed poorly one of their ideas involves the miners are charities. Now sure its reasons why we shouldn't trust every charity out there.. however i'd probably still rather trust charities over the groups in crypto i've seen in control of blockchains.

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Animal lovers shake their heads while reading your analogy with cars and horses :P, I bet you don't pet your car :))

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Defi is certainly yet to stay. Glad to have to gotten a taste of the experience through Cub

I Believe we are still in the earlier phase of what it has to offer. We'll surely see more innovations and what this can do as time goes


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There is no doubt that this is unstoppable, no matter how many obstacles the elites put in the way, the defi will always come out on top.

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There should be a name invented for those who are ignorant enough to buy into these things. I mean how are these people making any sense out of these "investments" other than finding a greater fool to sell the token to?

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