[iskander]

It's a loan with a guaranteed atomicity in repaying.

A single atomic transaction does:

1) Borrow $80M 2) Use $80M however you want 3) Return $80M + loan fees (e.g. on Aave this would be 0.09%)

The lender is algorithmically guaranteed to get the money back and the borrower can potentially take advantage of large scale transient opportunities, or...just wreak havoc on a poorly secured system.

More info here: https://docs.aave.com/developers/guides/flash-loans

[BaseballPhysics]

And if you're wondering "but why??", if I'm not mistaken, one of the initial use cases for flash loans was in exploiting arbitrage opportunities, which tend to be transient with fairly low returns, which means you need access to large amounts of funds fairly quickly in order to take advantage of them.

[grumpymouse]

They’re used a lot to maintain uniform exchange rates across Defi projects etc. In theory allowing anybody to borrow a lot of tokens to exploit arbitrage opportunities means that the rates will converge simply due to market forces (because if one project offers a better rate than another it will quickly be arbitraged away).

[uoaei]

So it is purely a tool for speculative trading? There is no connection to the "currency" part of "cryptocurrency"?

[iskander]

It's a tool for...atomically loaning and repaying large amounts of money. You can use that however you want, most typically for arbitrage to bring markets into equilibrium while earning a profit. The arbitrage isn't fundamentally different from what happens in traditional markets and flash-loan-like primitives are being developed outside of crypto.

(I don't know what the second question means or what your mental model of a "real" currency is)