Topic: Is DeFi really a threat to centralized finance? - page 5. (Read 1250 times)
The concept on the mind of people do always makes comparison and competency between Decentralized Finance (DeFi) and centralized finance making a rise for an issue if the existence of DeFi becomes a threat to the centralized body. Yes, there are certain advantage that DeFi can do provide so as the centralized finance as well. Both are two different bodies so no sense that we always bumping those two different finances for they work on different aims and purposes and people have their free will if they wanted to get into DeFi or just stick into the centralized finance. DeFi is not being existent to become a threat to the centralized finance. Such concept is just running freely on people's mindset.
I support the second comment that says DeFi is a supplement to centralized finance. There are no threats, they are there as a support. I don't know how some people expect this to be, but I think it needs to be a balance between the two. I see crypto as other assets, but it's quite different because unlike the others, you can easily transact/send it to anyone because it's digital.
All these assets, crypto, silver, gold, they are all the same, anyone you prefer to hold is your choice. Fiat is the main currency and these ones can either have more value or less than it. That's why we are using fiat to judge the value of all other assets.
All these assets, crypto, silver, gold, they are all the same, anyone you prefer to hold is your choice. Fiat is the main currency and these ones can either have more value or less than it. That's why we are using fiat to judge the value of all other assets.
I work in finance so I've paid especially close attention to the "Smart Contract Finance" bullshit. I looked in to DeFI and other types of coins/tokens in this "Smart Contract Finance" world. I did a write up under scams where I go in depth about his this is an unsustainable bunch of nonsense and it isn't real.
It is a spot on analysis, it is really unsustainable and i knew people could make a ton of money in the beginning but then everything comes crumbling down, the hype will burn out eventually and it is funny to see that people are making a lot of money in a short period of time doing substantially nothing 
. I am expecting the hype to burn out once the bitcoin rally starts to push for the old all time high valuation. This threat to the banking sector will only become noticeable when the majority of people will be able to use cryptocurrency and will have an understanding of how decentralized Finance works. And currently, it is much easier for an ordinary person who is not connected with the cryptocurrency market to contact a traditional Bank.
Bitcoin is being supported by banks in the US. Regulations related to Bitcoin are being finalized. Bitcoin is being accepted at multiple locations across the United States and globally. The number of people using Bitcoin is increasing over time, and big companies are putting bitcoin in their reserves.https://www.forbes.com/sites/billybambrough/2020/05/30/jp-morgan-bitcoins-biggest-enemy-suddenly-appears-to-be-going-all-in-on-crypto/#7a4c3a3523a6
JPMorgan—Bitcoin’s ‘Biggest Enemy’—Suddenly Appears To Be Going All In On Crypto
Banks have already realized that if it is impossible to fight against such an enemy, then bitcoin can be bought and managed.
There will be services like PayPal, where you can buy bitcoin or other cryptocurrencies, but you can no longer transfer funds to your decentralized wallet.
JPMorgan—Bitcoin’s ‘Biggest Enemy’—Suddenly Appears To Be Going All In On Crypto
Banks have already realized that if it is impossible to fight against such an enemy, then bitcoin can be bought and managed.
There will be services like PayPal, where you can buy bitcoin or other cryptocurrencies, but you can no longer transfer funds to your decentralized wallet.
Bitcoin is becoming a global currency with the growth of the internet. Bitcoin is the harmony of economy and technology, which is the product of human economic development. Many economists and financial experts have criticized Bitcoin, but its value continues to rise. This is a reflection of the world's demand for Bitcoin.
Paypal sees the potential of Bitcoin and is trying to make a profit from Bitcoin transactions by including it in their payment system. It is a concession because they understand how big Bitcoin will be. They cannot go against the trend of money, they rotate to survive.
On a level playing field, yes. If developers build truely decentralized applications on Defi and regulators do their job well/legally/morally, CeFi or centralized finance will cease to exist and true DeFi will flourish.
It won't cease as long as there are people who is not comfortable using Defi, or even trust it as much as they do with centralized finance. And to be honest, having decentralized finance is hard it's like letting people do whatever they want with their money they can even evade taxation with it. Defi will only be a threat if wealthy people starts to quit using centralized financing which I highly doubt. I think this will likely happen in a Just Society with people strongly following Just Law.
I don't think so, I guess it's too early to think of this way. Let's see. The you think defi a a threat to the future of centralized finance? What's your opinion?
No its not because there’s no big changes in the market right now despite of having the presence of DeFi and still CEX are being used by many traders and investors. If DeFi keeps on working as a hype project and very few are delivering good service then I think its hard for a DeFi to be on top and still people’s choice is CEX. 
I work in finance so I've paid especially close attention to the "Smart Contract Finance" bullshit. I looked in to DeFI and other types of coins/tokens in this "Smart Contract Finance" world. I did a write up under scams where I go in depth about his this is an unsustainable bunch of nonsense and it isn't real. Smart Contracts are highly limited and offer to upside to what computer programming can already do and has been able to do for some time. I would LOVE for someone to prove me wrong, but that's yet to of happened.
https://bitcointalksearch.org/topic/--5282731
https://bitcointalksearch.org/topic/--5282731
DEFI has a small capitalization compared to traditional finance. They are relatively new and do not have the same legal basis as traditional centralized finance.
When everyone is ethical, qualified enough to develop DEFI projects well enough, that is a current financial threat. It will take a while for this to happen, perhaps we will start with the CBDC digital currency issuers.
When everyone is ethical, qualified enough to develop DEFI projects well enough, that is a current financial threat. It will take a while for this to happen, perhaps we will start with the CBDC digital currency issuers.
This threat to the banking sector will only become noticeable when the majority of people will be able to use cryptocurrency and will have an understanding of how decentralized Finance works. And currently, it is much easier for an ordinary person who is not connected with the cryptocurrency market to contact a traditional Bank.
https://www.forbes.com/sites/billybambrough/2020/05/30/jp-morgan-bitcoins-biggest-enemy-suddenly-appears-to-be-going-all-in-on-crypto/#7a4c3a3523a6
JPMorgan—Bitcoin’s ‘Biggest Enemy’—Suddenly Appears To Be Going All In On Crypto
Banks have already realized that if it is impossible to fight against such an enemy, then bitcoin can be bought and managed.
There will be services like PayPal, where you can buy bitcoin or other cryptocurrencies, but you can no longer transfer funds to your decentralized wallet.
DEFI has a small capitalization compared to traditional finance. They are relatively new and do not have the same legal basis as traditional centralized finance.
When everyone is ethical, qualified enough to develop DEFI projects well enough, that is a current financial threat. It will take a while for this to happen, perhaps we will start with the CBDC digital currency issuers.
When everyone is ethical, qualified enough to develop DEFI projects well enough, that is a current financial threat. It will take a while for this to happen, perhaps we will start with the CBDC digital currency issuers.
This threat to the banking sector will only become noticeable when the majority of people will be able to use cryptocurrency and will have an understanding of how decentralized Finance works. And currently, it is much easier for an ordinary person who is not connected with the cryptocurrency market to contact a traditional Bank.
DEFI has a small capitalization compared to traditional finance. They are relatively new and do not have the same legal basis as traditional centralized finance.
When everyone is ethical, qualified enough to develop DEFI projects well enough, that is a current financial threat. It will take a while for this to happen, perhaps we will start with the CBDC digital currency issuers.
When everyone is ethical, qualified enough to develop DEFI projects well enough, that is a current financial threat. It will take a while for this to happen, perhaps we will start with the CBDC digital currency issuers.
DeFi was supposed to be a threat to traditional finance but it has become a kind of conduit for centralized finance to find a way to transform the crypto scene. The crypto crowd is slowly getting involved with the financial. engineering that defines traditional finance. Derivatives, Risk-weighted imvestments and what not. Traditional finance is finding a way to scale its speculative products to the smallest of the investors.
The you think defi a a threat to the future of centralized finance? What's your opinion?
Not at all. Atleast not at the type of pace it's currently at. Once again just like 2017 this is also becoming a scam movement and nothing else. Yes it is a great feature but real life lending isn't merely done for digital assets. This model would terribly fail when it comes to digital assets because there can be no enforcement. Moreover I hope defi also don't end up with a bad image like ICOs ended. Because once everyone thought that IPOs are over and future is ICOs and no good company does direct coin offerings now.I don't think it's the pace that's the problem, but the direction. The focus is on all the wrong places. People care more about the speculation than they do about the technology. Everyone needs to stop treating it like it's a new way to make money. Just sit back and watch while the legitimate coders make the basic concept work as intended. Avoid all the projects that are churning out worthless tokens for no real purpose. Those are just a waste of everyone's time and effort.
DeFi isn't going to become a success by people buying and selling useless tokens. It's going to happen by finding a viable use-case and providing benefits that centralised finance is unable to offer. So just keep your distance for now and wait until it functions properly and there's an actual point in using it.
The you think defi a a threat to the future of centralized finance? What's your opinion?
Not at all. Atleast not at the type of pace it's currently at. Once again just like 2017 this is also becoming a scam movement and nothing else. Yes it is a great feature but real life lending isn't merely done for digital assets. This model would terribly fail when it comes to digital assets because there can be no enforcement. Moreover I hope defi also don't end up with a bad image like ICOs ended. Because once everyone thought that IPOs are over and future is ICOs and no good company does direct coin offerings now. 
Bank offers non collateral loans like credit card, persona loan, automobile loans,etc which is never possible with decentralized finance so I don't think people are going to choose decentralized finance over banking on these kind of loans.Which means defi can co-exists along with centralized banking system which may give healthy contribution to the consumer over the profits on one side.
Decentralized financing, which moves the digital currency market from speculative and project markets to markets that approach real life, but in a decentralized manner. I think it will be a threat to central finance because it is a more flexible and transparent financial system. Currently, there are limitations on technology but in time, laws will adapt to the changing financial situation and DeFi's place in the world will become clearer.
On a level playing field, yes. If developers build truely decentralized applications on Defi and regulators do their job well/legally/morally, CeFi or centralized finance will cease to exist and true DeFi will flourish. I think this will likely happen in a Just Society with people strongly following Just Law.
Humans are still greedy and it will be difficult for them to reach the absolute level of creating an alternative to traditional centralized finance. The infrastructure of blockchain is growing stronger, maybe in the future, we will have new and better DEFI projects but the pump and dump phenomenon will continue to happen at DEFI.We need more attention from developers and more money from investors to make the crypto market, DEFI strong enough to escape manipulation and organic growth.
The you think defi a a threat to the future of centralized finance? What's your opinion?
I don't see DeFi as a threat to the banks,because,at the end of the day,banks will simply buy and adopt DeFi technology(if they see potential in it).If there's no potential in DeFi,then this technology will simply die and nobody will use it anymore,just like how the ICOs died,back in 2018.
Seeing DeFi projects and banks as two opposite armies,which are going to war against each other is a big oversimplification.
collateral-based lending is extremely limiting right now, but it's worth pointing out that in the future, asset tokenization could make defi significantly more useful.
let's assume that titles to real property, automobiles, boats, etc could be tokenized/digitized and precedent could be established where courts recognize these titles as legally binding. conceivably, this would enable defi platforms to extend services to the traditional mortgage and auto lending industries. this could be extended to anything where traditional certificate of titles are used today.
let's assume that titles to real property, automobiles, boats, etc could be tokenized/digitized and precedent could be established where courts recognize these titles as legally binding. conceivably, this would enable defi platforms to extend services to the traditional mortgage and auto lending industries. this could be extended to anything where traditional certificate of titles are used today.
With the current model, DeFi will not able to integrate the 'tokenization of real assets' even if such on-blockchain asset is legally bound. Instead of working on P2P model, DeFi lending platform works on 'liquidity pool' model. Number of lenders together contribute to the pool which is then disbursed to the borrowers accordingly. Hence, there is no clear relationship between the buyer and the seller. It maybe possible that $40,000 I borrowed was contributed by 15 different lenders.
In such scenario, holding and liquidating asset would be impossible because custody of asset cannot be linked to a single individual.
i don't think we need to limit things to the current model or bother with liquidity pools. the example above could easily apply to a p2p transaction between two people---ie borrower and title holder. in other words, replacing banks as traditional mortgage lender. as long as the mortgage is in good standing, the title could remain "locked" by the smart contract. if default occurs, it would be released to the lender's possession.
In order to make tokenization of real assets possible, we will need a middleman who will first take custody of 'digital legally bound on-blockchain asset' on his ETH address.
i'm pretty sure it's trivial to do this without custody. the only problem IMO is that we need some sort of trusted third party for attestation purposes, so that both parties can reliably expect the tokenized title to hold up in court.
The you think defi a a threat to the future of centralized finance? What's your opinion?
You really crack me up buddy You mean something similar to the image below?
We need to clear one thing, centralized and decentralized finance comes with merit and Demerit
| | | SN | | | DEX | | | CEX | | |
| | | Merit | | | no regulation, quick profit | | | regulations, profit takes time | | |
| | | Demerit | | | High risk and may loose all money | | | Low risk( except when there is economic trumoil) | | |
The you think defi a a threat to the future of centralized finance? What's your opinion?
I don't see DeFi as a threat to the banks,because,at the end of the day,banks will simply buy and adopt DeFi technology(if they see potential in it).If there's no potential in DeFi,then this technology will simply die and nobody will use it anymore,just like how the ICOs died,back in 2018.
Seeing DeFi projects and banks as two opposite armies,which are going to war against each other is a big oversimplification.
Jump to: