[mudrockbestgirl]

It's an alternative financial system with many of the same (and some different) primitives than the existing ones: Liquidity via AMMs (instead of human or HFT MMs), derivatives, loans, yields, fixed-rate instruments, etc. These are used in the same way the equivalents in TradFi are used, just implemented differently, permissionless and with an API.

I believe that many people don't understand the traditional financial world or how any of the above are useful. They want to see something like Twitter on the Blockchain because that's what they can wrap their head around. That's why so many people in the crypto space come from a more traditional finance background. They understand how the above instruments are crucial for an economy even though they are not end-user products like Twitter is. They are one layer below that.

Also, the decade argument is misleading in the case of Ethereum. It's true that ETH itself has been around for a while, but DeFi with sufficient liquidity has really only been a thing for 2-3 years and has made quite rapid progress since then.

[mmcnl]

I understand it's an alternative, but if you can't explain why it's a better alternative, than it's just making simple things complex. You argue that people who ask for practical use cases don't understand because "they can't wrap their heads around it". I'd argue exactly the opposite: you're in too deep to understand that the burden of proof is on you (or anyone else in crypto), not on everyone else, and you can't wrap your around the fact that everything related to finance is lubricant for life. How is crypto better lubricant than the current financial system? That's a very valid question, and if takes your more than two sentences and all kinds of words that no one outside of crypto understands, I'm afraid you don't have an answer at all.

[mudrockbestgirl]

> How is crypto better lubricant than the current financial system?

That's easier to answer, but it's not what's usually asked. The OP asked "what's the use case of crypto" which is kind of like asking "what is the use case of financial instruments" and that's pretty difficult to explain to someone who has zero background in finance.

So why is a financial ecosystem based on crypto better? It's permissionless and makes the same services globally accessible to anyone in the world. It can to move and evolve faster because everything comes with open composable APIs allowing developers to implement new ideas quickly. It can be significantly cheaper due to eliminating middleman, which is already happening with AMMs that have liquidity and volume comparable to centralized counterparts. It's transparent in that you can see the current state of the market (e.g. collateralization ratios) and protect yourself accordingly. And it can protect you from bad centralized actors that manipulate monetary policy for their own benefit.

These are pretty convincing pros for me. Of course they also come with cons. If anyone can create financial instruments by copying & pasting a token template you'll end up with tons of scams. If you need distributed consensus to make decisions things move more slowly. For some people the cons will outweigh the pros. But there aren't many "consumer use cases" like Twitter on a blockchain that are easy to explain because it's fundamentally a financial infrastructure layer.

[pyinstallwoes]

All of those things are contingent on perfect scenarios. As in, bug free contracts; which not to even mention the human willful engineering part of manipulating trust. Many people confuse permission and trust.

The things you outline are optimistic visions for what cryptocurrencies can offer as an alternative to the "root" financial system; however it is certainly not better in every case, and only maybe better in some very specific cases. Perhaps this will change overtime, but one thing I know for sure.... every piece of software ever written and every piece of hardware ever built has bugs and has been hacked. The human is even weaker to exploitation, so... without middle-men to act as a safety net, lawlessness and ill incentive can run rampant. Unfortunately the human condition optimizes for this opportunity if it shows itself.

You do admit there are cons, and I appreciate that. I think anyone who has some technical know-how should do what they can to at least point out any dogma. Dogma has clearly ruined a lot of the cool things about the technology.

[lilsoso]

You've essentially responded with the statement that all software has bugs: "every piece of software ever written and every piece of hardware ever built has bugs and has been hacked".

The person you're responding to provided a number of cogent points. To take the bad faith interpretation of your argument we'd never use computers or online banking.

[pyinstallwoes]

They break. Humans fix it. Nobody can fix broken hacked contracts and act as intermediaries to solve issue. 3 party responsibility is key for stability.

[eulenteufel]

>They understand how the above instruments are crucial for an economy even though they are not end-user products like Twitter is.

Do they actually know these instruments are crucial for the economy or do they just know how to make money with it? I'd think the latter would be enough.

Can you recommmend any resources to understand the importance of financial instruments to the economy?

[jakupovic]

>Do they actually know these instruments are crucial for the economy or do they just know how to make money with it? I'd think the latter would be enough.

There is no difference in capitalism between something being "crucial" for economy or just a way "to make money." They are equivalent.

[eulenteufel]

That's hard for me to understand. I'd take 'crucial to the enconomy' to mean 'positively coupled to the rest of the economy' or 'the rest of the economy would be worse off/less efficient if this financial instrument were to be outlawed.

Why does this follow from 'makes a lot of money'? That seems like a very complicated question to me.

[jakupovic]

I was trying to say that these are equivalent, crucial to economy and way to make money. To me they are equivalent because capitalism will find the shortest and most efficient path, if it doesn't make money it will not exist. Hence, crucial means survives by making money.

[rrrrrrrrrrrryan]

Most relationships in capitalism are symbiotic, yes, but just like the natural world, predatory and even parasitic relationships abound as well.

[lupire]

The fiat financial system works because all the financial engineering is underlying the real capital economy.

Ethereum has the financialization but not a real capital economy -- no one starts a non-cryptoc biz with Ethereum.

So, all the defi stuff only works when its bridged to the fiat money world, but that bridge is so full of scams and speculative bubbles that it's useless for legit work.

IPFS and Internet Computer are the bests idea for a real economy on the blockchain money. But anything non-computational, like physical manufacturing and offline services, are much harder to connect to cryptoc.