Topic: The Decentralized Economy During COVID-19 (Read 547 times)

This ks pretty much what I am trying to make people understand. What's the whole point of giving a loan when you have to keep such a highly liquid asset like other cryptocurrency as a collateral? Even if I am long on that cryptocurrency still there are various other options than paying a hefty interest rate. Even for a trader who does all the calculations before entering into a trade will realise that he can never be profitable with this kind of loan by his side. So technically the product of defi is somewhat flawed which means that they definitely won't stay here long.

But you also understand (right?) that the so - called "decentralized economy" can not exist on a global scale - because it will cause such a major confusion that we will roll ourselves back, when every small Prince had his own coins-and then it worked only because they were gold (for example) and you could believe in it.
This reminds me of the story about universal equal distribution of resources - which will only lead to the fact that you will need a huge staff of officials and a monstrous set of tools for correctly determining prices in all coins at once. No one wants to be part of a decentralized economy and still use a single currency, because then why do we need it?

BTC growth to 20K will be possible only in those conditions when the" Fiat " economy gets back on its feet and begins a long and consistent growth again. Just like that, it will not jump by 3-4 times because this requires dollars/euros and not just a desire.

It depends. If the decentralized economy becomes independent enough from the current monetary system, it's unlikely such scenario will happen. But we all know how the so-called "decentralized economy" is too tied to the centralized realm. Given that adoption for crypto is still low relative to Fiat, if the latter goes down the drain, so will the entire decentralized economy. I hope that the mainstream economy gradually recovers after the demise of COVID-19. Once this happens, it's expected that prices per each cryptocurrency on the market will rise to new ATHs. I'd imagine Bitcoin going past $20k after the world's economic recovery. Right now, it's a great safe-haven asset for times of turmoil. People have the choice to escape the negative effects of governments' constant money printing via the use of decentralized cryptocurrencies. If Bitcoin and Blockchain technology weren't invented in the first place, none of this would've been possible.

All in all, the rise of COVID-19 will prove to be more beneficial for the decentralized economy in the long run. The longer the outbreak takes to disappear from the face of the Earth, the greater cryptocurrencies and Blockchain technology will rise in popularity. We've already seen this with the "De-Fi" and stablecoins hype. Governments may be debasing Fiat currencies by printing more money than usual (especially the US). But this will lead towards a higher valuation of the crypto market as we speak. Just my thoughts

I don't think so. Though its really a big help during this strange time, but it can never be used as mainstream economy. Because, I believe that our economy needs physical manpower and not all the people around the world have the knowledge about digital currencies and have an access to the internet and the modern technology.
In addition to that, other countries still not accepts cryptocurrencies legally.
Maybe in the future, but for now, it won't be.

More and more DeFi has sprung up Connext - Compound. DeFi is easily accepted because it can be used by anyone. the conditions are only using the recommended crypto asset wallet like MetaMask. users pledge their Ether crypto assets and get DAI as loans. This DAI value is the same as $. if you want to develop it can not only be $, but can be based on ¥, , €, £ if any. so the decentralized system also has a relationship with the centralized financial system. can't stand alone.

Not just due to the current pandemic situation, I guess all unusual economic related thing will make some people to think about adopting cryptocurrencies because of its decentralized nature. I mean when you keep going on what you are getting used for years then you will ever think about trying new things. This way the current pandemic situation must be getting opportunity for many people to check and test what is crypto currencies and how decentralized economically will be helpful for them.

Whenever people do hear about collapse of some country's economy then they will go for studying what individuals need to take care of their financial thing against their country's performance in world economy. This kind of news are usually makes some people to think about adopting the decentralized to things. Similarly I believe pandemic lockdown and economic crisis made some people to study about decentralization and other crypto related things from which we can expect some people to become a permanent crypto adopter.

Do you understand what you're saying? If the current financial system collapses , we will collapse with them. Decentralization is not a Golden pill for all ills.
If there is a truly global financial crisis and everything goes to the bottom , then we will go to the bottom along with the rest of the world, along with cryptocurrency, decentralisation and so on. Please don't be so limited as not to understand this I beg you.

I don't understand how that addresses the question at all.

The entire point of smart contracts is they are self-enforcing. You're either talking about a conventional scam (which has nothing to do with De-Fi) or you're talking about broken contracts, which I already addressed:



You are drastically overstating things. I am quite sure you have absolutely no experience procuring usable documents and actually thwarting identity verification systems.

First of all, stealing biometric data and verifying in a multi-tiered authentication system is not easy. That's fucking ridiculous. Usable KYC documents are also far more difficult to obtain that you are representing. There are millions of useless documents on the dark web, sure.

Your position is essentially this: "it's so easy to steal identities that we can't have identity verification systems." Don't you realize, that's an argument against all identity verification systems? It's not a valid argument to use centralized instead of decentralized systems. You haven't established why centralized systems are superior.

You can trust a decentralized system for the same reason you can trust a centralized one, because trusted third parties (like your bank) are attesting to the data. This is about who controls and stores the data.


Some degree of fraud will always occur in lending. You realize that, right? Pointing out that crime is possible isn't a legitimate argument against anything.

You know what won't occur with decentralized ID? Large scale hacks like Equifax where data on 150 million people is stolen at once.

I already mentioned reputation-based systems as another possible basis for unsecured credit. I also already said:


Nothing you're saying is an argument against decentralizing identity systems. You're only arguing against the basic idea of identity verification. That's rather futile since identity verification isn't going away.

That's certainly true, mate. Believe me, most tokens on the "De-Fi" space are entirely centralized. A good example of this are stablecoins like USDC and USDT which can be manipulated at will. There have been several cases where both stablecoins have "locked" users out of their funds by being placed on a "blacklist". This ultimately defeats the purpose of "De-Fi" as we speak. The decentralized economy will only work if people start using decentralized infrastructure such as decentralized stablecoins (DAI), decentralized exchanges (Block DX), and more. In this times of turmoil, it's imperative that people take the right decision to secure their funds against greedy banks and hostile governments by choosing the right cryptocurrencies with a focus on decentralization above anything else.

So far, Bitcoin is the most decentralized cryptocurrency in the world, enabling a truly decentralized economy in the mainstream world. In case governments decide to crack down on centralized exchanges, there will always be a "Plan B" because of the decentralized nature of Bitcoin. Since the pioneer cryptocurrency has been proven to be a good store of value (sort of), it has attracted the likes of investors, traders, and everyday people. Bitcoin is now the "Gold" of the digital era, serving as a hedge against traditional Fiat that's being debased by governments worldwide. I'd expect further growth of the decentralized economy, the longer COVID-19 takes to disappear from the face of this earth. With how bright things are looking for the crypto market right now, we can expect good things in the upcoming months. Just my opinion

If it's so hard to enforce the contracts, they won't be popular. And the interest rates might be huge as the result.


This is just an implementation detail of a database, but how would the ID itself work? How can you trust it, when it's possible and even easy to obtain biometric data and document scans. Maybe it could be solved with a web of trust, but that still means relying on third parties, it's just that you'll have a bigger choice of them. As the result, identity frauds will still occur.

The scenario that the economy is crash cant not happen, im my opinion. Our world is strong enough to against such a disastrous disease. There were several crises which were the same at this one but people still survived and they knew how to handle everything with thier new technologies and techniques learned over thousand of years. Humankind are smart enough to defeat almost everything which makes them fell bad

Moreover, decentralized system is currently not what the people want. Actually, only a small percentage of people understand the value of their own privacy and anonymity. In the other words, they depend on the centralized system to conrol their money and manage the economy. To them, the banking system are reliable enough so that they willing to give their personal information for a more convenient lifestyle

To me, both systems are great and they are two of the best inventions human have ever made. Despite being born recently, decentralized system has been promoted a lot and being trusted by most of cryptocurrency users. But its still a long way for it to become an important part of this world

DEXs that are actually centralized and/or custodial isn't the end goal here. If I thought Binance Chain was the end of the line, I wouldn't be interested in the idea of DEXs at all.


When I say "digital ID" and "reputable-based systems" I'm not saying this is a drop-in replacement for your credit file at Equifax or your driver's license on file at the DMV. I'm also not sure that the goal is to completely remove third parties. After all, part of the value of digital ID is that you can have a third party attest to the veracity of your ID, without requiring you to reveal sensitive information at the time.

Part of the value is also that while the ID is rooted on chain, personal data is stored locally, decrypted and shared only when the user signs with his private key. So if this model of decentralized ID caught on as a way to store personal credit files, it would be superior in the sense that there does not need to be a central repository of personal data (like Equifax's database) for hackers to target.


Why does this matter? How is it any different if they use bank wires or BTC to scam?

The future of "DeFi" depends on the regulation. When the strong government (probably USA) starts getting annoyed with DeFI, we will see the crash and burn of this so-called "decentralized" system. The usage of a token doesn't mean the system is decentralized. I'd rather use the term "tokenized finance."

Covid probably influences people decision to store part of their money in crypto assets (not only DeFi) because of the "printing money" thing.

\Actually this is wrong because this pandemic teaches people more about the advantage of cryptocurrency when the physical money has been discouraged a the infection might spread more then.
Indeed and has been proven so many times that people are in search of new financial system and they found it in cryptocurrency so basically sooner more adoption will happen.

The decentralized economy is going to be positive during COVID-19. Although the country's economy has been affected by the virus the demand for a decentralized economy has increased significantly. The centralized economy has paved the way for the plunder of the corporate world and the exploitation of the common man So even after so many years of independence, the poor people have not seen the face of development Not only economics is responsible for this but also powerful political leaders cannot deny its responsibility However, since Bitcoin is not under anyone's control, it is moving at its specified speed.

We already have DEXs and DeFis with centralized switches for letting intervene if something bad happens, and it's only a matter of time until these mechanisms are used for some exit scam or when a government tells to do so. And this whole blockchain technology thing has always been about looking cool to investors rather than actually making something that would benefit companies or users.

Bitcoin is almost fully adopted, in fact, we even don't reach at least half of the global population who holds and knows about Bitcoin. If you could see how many countries ban crypto, definitely their people have no chance to invest Bitcoin. If we could say that the pandemic is pushing people and leaders to adopt the system, maybe but not to the point that almost all of us are in adopting this.

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The hypes cause by DeFi existence is something to help the market to be more popular and this is not connected to the pandemic, it is just like a big coincidence that DeFi had launch during this time. But can't we foresaw what it happens to the market after this crisis and to sure that there is a huge change after.

Crypto currency have been in existence long before the pandemic.stroke the world. This market had proved it worth and almost fully adopted globally before this virus outbreak.
Covid-19 doesn't have a strong benefit for the decentralized economy and as such it's absence would not be felt, crypto is already rooted and nothing change the people's mind

Agree. For what I know, De-Fi is just starting to blossom. Flaws will be discovered over time, just as it's the case with any emerging technology. I've seen how disruptive the space is, providing banking services to the unbanked. With no need for ID or credit verification to participate, De-Fi could allow anyone around the world to have a stake in the crypto economy. I think De-Fi is ideal for times of turmoil (like the ones we're facing right now). We might soon see a future where jobs are paid in crypto, while people put their savings on the Blockchain without the need to interact with a real bank in the mainstream world.

Of course, De-Fi is extremely hyped right now as stablecoins are getting all the attention in the crypto/Blockchain space. Coins like USDC and Tether USDT may not be perfect (as sometimes price is less than $1), but they've been able to serve their purpose most of the times. I'm concerned that USDC and USDT are being manipulated by their own issuers, as they censor certain people from getting access to their assets across the Blockchain. It greatly defeats the purpose of De-Fi, as the middleman is brought back again into the system. For De-Fi to work as intended, there needs to be a stablecoin that's completely decentralized. Luckily, we have DAI which fits the bill nicely. But being the only decentralized solution around, greatly limits one's options. I'd prefer to have many decentralized stablecoins than centralized ones on the market. Ultimately, people will decide whenever they want to keep using centralized stablecoins in De-Fi or not.

Nonetheless, COVID-19 will certainly have a positive impact on the decentralized economy in the upcoming months. The long the outbreak takes to disappear, the better it'll be for the industry in general. In these times of need, people are looking for a safe haven against traditional Fiat. As governments print money like crazy (effectively debasing the value of their own national currencies), people will rely on De-Fi to protect themselves against the dreaded inflation. With scarce cryptocurrencies like Bitcoin, Litecoin, and Maker, there's a store of value for everyone in this emerging decentralized economy. Just my opinion

A lot of people speculate that the drop was caused by a major scam that took a ginormous amount of bitcoin with their scam named PlusToken nd they later dumped the coins which made the market to crash so badly while at the same time pandemic was on it's peak too so it is hard to say what exactly caused the drop but nevertheless we recovered it which means that bitcoins have finally gained the stability it was craving since it came into existence.

I don't think the economy is going to be decentralized ever because while decentralization sounds cool and offers freedom but at the same time brings a lot of problems which can be of greater threat than the benefits combined. I am not so appreciative of De-fi being so hyped although it is something to keep an eye on.