So they must have solved the problem of writing completely bug-free software then? Otherwise leaving your money with an unpatchable service seems like a really bad idea.
I can see you didn't click the link otherwise you will have read the section about that.
"They" didn't solve that problem, it is not the solution to all problems in finances. So, whats your point? Vaccines does not prevent 100% of infections, does that means that they are worthless?
Which section are you referring to? The one that says "Coding errors and hacks are common in DeFi"?
You said that the contract, i.e. the software, is immutable. This means that it can't be patched. If it can be patched it's not immutable, excepting semantic trickery like each version of the contract being immutable while what "the contract" points to can be changed in order to patch it.
Fair point, I shouldn't have mention that you can put your stable coins into a DeFi protocol because even if that's interesting is not the point of the answer.
I wanted to address that in the world of crypto there are stable assets pegged to some other FIAT if you want that.
Sorry if this becomes long but I need to explain my point of view. I live in a country that is not as authoritarian as Russia but is not a free economy like the US, people don't trust on FIAT and on banks because it had happened before that they took all our savings [1]. Even if this might seem like an isolated event, it happens every day. For example, if you work remote for a company abroad, the gov will exchange your USD on a wire transfer for the local currency and then not allow you to buy back USD. Our currency had a 60% of inflation last year.
I don't like the speculative aspect of crypto currencies, its volatility creeps me out. I wouldn't want to put my life saving on this. But I can see its value to circumvent corrupt governments and to make a free world. I do believe in humanity, the Putins are an exception and when you give people the opportunity to collaborate, most of them will choose to have a peaceful living.
Now, going back to your Turkish bonds vs DeFi. The difference is you can't buy those anonymously and at any point the gov. or exchange. They actually pay that much because no one wants to buy them, primarly because they don't trust they are going to pay that much. In a way, you can think of DeFi protocols are immutable math functions [2].
It's true. Crypto-currencies operate in a black market and therefore enable people to circumvent financial regulations. But circumventing regulations put up by incompetent governments doesn't address the root of the problem which is the fact that you have an incompetent government, and this has a whole range of consequences that go beyond mere currency issues, and that you won't be able to "circumvent" with or without crypto-currencies. So, in my opinion, you really need to address the problem and abandon the illusion that crypto-currencies will fix anything.
it is interesting that you referred to “black market”. If you come from a working democracy where what is “just” is close to what is “fair”, then “black market” can make you think of drugs, weapons, or these sort of ilegal things. But I want to let you know that in some countries we have to go to the black market to buy another FIAT with less inflation because it is illegal to exchange our currency even to protect our savings.
So, yeah we can call it black market but I like the term “free market”.
Say the central bank of XYZ set a fixed rate of 100 $xyz per USD but it becomes illegal to buy USD and no any bank is willing to sell you USD. In a country like the United States you might hedge against inflation by buying some treasuries.. but in other places they just make it illegal to do anything else.
This automatically creates a “black market” of USD where the price is whatever the people are willing to pay, in the end the free market finds its way.
My point is exactly the opposite, incompetent gov are a byproduct of having too much power to control the money supply. Do you think Putin will still be in power if he couldn’t control the economy, ie if he had no money? In that case, what’s the point of the sanctions?
The cicle which I am most familiar with, goes by like this: gov destroys private enterprise and free economy thru regulations and expropriations, unemployment goes up and people gets dependent on hand outs, the remaining jobs bears all the costs. Unemployed sees gov are they gods, they will kept voting for them forever, even if they live in complete missery, it is all they have.
Well, this theory is easily refuted by the fact that there are governments that have the same degree of power and control over the economy and don't wreck the economy. Some governments cause hyperinflation, but most don't, even though all are in control of the money supply. The fact that a government can mismanage the economy doesn't mean that it will mismanage the economy. In fact incompetent governments such as the Argentinian government are not that common. In many parts of the world the rule is for governments to be competent, or at least to be competent enough to not cause an economic catastrophe.
Unfortunately data is not in your side. Most countries do not have economic freedom, moreover the less the economic freedom the worse the living conditions [1].
You might think that any country controls their money supply, that’s a fact. But can Biden for example, double the monetary base with his sole signature?
People in those countries could have great aspirations, to have a fair system, a working democracy, a better government and all that… but don’t forget they also need to live in the meanwhile, while fixing all those problems.
I’m not a user of crypto currently, but I see it as a way of shifting power. Similar to what the internet did for information.