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by mudrockbestgirl
1464 days ago
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> 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. |
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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.