Will DeFi Kill Banks?

[GrandPapillon]

17 minutes ago, ThailandRyan said:

The IMF believes in crypto as well.

 

https://www.moneycontrol.com/news/business/cryptocurrency/rapid-growth-and-increasing-adoption-of-crypto-assets-pose-financial-stability-challenges-imf-7534041.html

 

Crypto asset technologies have the potential as a tool for faster and cheaper cross-border payments.

Bank deposits can be transformed to stable coins that allow instant access to a vast array of financial products from digital platforms and allow instant currency conversion, said the IMF in its chapter titled The Crypto Ecosystem and Financial Stability Challenges.

Decentralised finance could become a platform for more innovative, inclusive, and transparent financial services, it added.

grabbing desperately at headlines ????

[GrandPapillon]

23 minutes ago, mjnaus said:

When doing large volume processing in certain industries, everything involving getting merchant accounts, settlement is a complete and utter <deleted>show. The hoops some of my businesses have had to jump through to be able to take payments were bizar and nearly put my last company out of business. And this was a legit business, turning over north of $20mil per year. And when we were able to hold on to a merchant account for a longer period of time, settlement took days (best case scenario) or weeks (more typical).
 

right ????

 

I wonder how the millions of businesses doing 20m/y manage their credit card payments, while you couldn't ????

 

maybe the problem was not the banks or the credit card settlements

[Neeranam]

1 hour ago, lkn said:

I assume you are familiar with Ripple, they also mentioned blockchain heavily in their press releases, and did have their XRP token for international settlement, but the network they were actually trying to sell banks had nothing to do with blockchain, because of course, when you have trust, as you generally have between banks, you can just use a regular database.

Do you mean Ripplenet?

 

My bank SCB used XRP for cross border payments to Japan. 

 

https://ripple.com/ripplenet/on-demand-liquidity/

[ThailandRyan]

19 minutes ago, GrandPapillon said:

grabbing desperately at headlines ????

Not grabbing at all, just trying to show you the error of your ways but then you have missed the boat already.  Start to paddle my friend in order to catch up. 

[Neeranam]

Just now, ThailandRyan said:

Not grabbing at all, just trying to show you the error of your ways but then you have missed the boat already.  Start to paddle my friend in order to catch up. 

Best ignore the trolls, I do. 

[GrandPapillon]

Just now, ThailandRyan said:

Not grabbing at all, just trying to show you the error of your ways but then you have missed the boat already.  Start to paddle my friend in order to catch up. 

I think I can survive without cryptos or scams for that matter ????

[ThailandRyan]

1 minute ago, Neeranam said:

Best ignore the trolls, I do. 

Oh but it's fun ???? 

[GrandPapillon]

crypto fans are an easy target, like shooting fish in a barrel ????

 

[lkn]

25 minutes ago, mjnaus said:

So while it's great for you that did not experience any of that nonsense, that certain does not apply to everyone else. Having to literally beg some clerk on a powertrip at the bank to release some of our funds so we can make payroll is a reality for some businesses. 

What my experience shows is that there are no technical reasons for settlement not to be instant, and there has not been for more than a decade.

 

Your problems may be very real, but I don’t think they are technical in nature, e.g. you mention a clerk on a powertrip holding on to your funds, so you couldn’t do payroll. Presumably though, this clerk wanted proof of origin or some other document, to release the funds, i.e. regulatory overhead, but this is not solved with a trustless blockchain, unless the goal is to avoid regulation, and while we can probably all agree that a lot of regulation suck, we still would like to run our businesses legally, and thus have to comply.

 

But even if we assume we want to run an illegal business, and avoid all KYC/AML regulation, I am still not sure blockchain is the best answer, because it is a giant public ledger, so when the authorities crack down on you, they can basically see your entire financial history. Not to mention the practical problems of on and off ramping (when you run an illegal business), and actual interaction with the blockchain for a business would be a high risk, because there is no recourse for mistakes.

 

Just this week we heard about DeversiFi which accidentally spent $23 million in an erroneously calculated transfer fee, and Compound who paid out $90 million due to a bug in their code. These are just human errors, there are also the hacks, exploits, and frauds, which are more dangerous with DeFi because if you someone steel your money (which has happened countless of times) no-one can help you, they are lost for good.

[HenryfromMalaysia]

Banks will not die as there is still mortgage, lending, loans but one thing crypto can do is the money exchange. I understand Ripple tried to do something on currency exchange but failed to take off.

The global currency exchange (USD to Euro, GBP, Renmenbi etc) will likely be fee free when crypto solves this problem in the next few years

[lkn]

13 minutes ago, ThailandRyan said:

Not grabbing at all, just trying to show you the error of your ways but then you have missed the boat already.  Start to paddle my friend in order to catch up. 

For every single fad, you can find people with fancy titles or in high positions, that will endorse it.

 

But look at all these endorsing statements, they are hollow. It’s all about how things could maybe in the future be better… but bitcoin is more than 10 years old, and pretty much no-one uses it as an actual currency, it has just become a speculative asset or a casino chip.

 

Find someone who can explain *why* blockchain or DeFi can improve existing systems, what kind of inefficiency in the existing system does it remove? How does the tokens themselves create value?

 

I have heard zero explanations of these things. Just explain to me, how crypto coins are not just zero sum games, and I will be impressed (they are actually negative sum, because of the new tokens issued to miners,).

[lkn]

2 minutes ago, HenryfromMalaysia said:

The global currency exchange (USD to Euro, GBP, Renmenbi etc) will likely be fee free when crypto solves this problem in the next few years

Actually, my bank already offers me the true exchange rate for all transactions done in foreign currency (and no ATM fees when abroad). But this is only for premium customers.

 

Wise has a free MasterCard where their fee is 0.20-0.45%, depending on the currency pairs.

 

The impressive thing with Wise is that it is built *on top* of the existing system, and they can still offer extremely low fees.

 

So this is not a technology problem, it is a “banks charge high exchange fees because they can”, but we are slowly seeing disruption from the likes of Wise, and my bank has seen the writing on the wall, and already removed all their fees (for premium customers and up).

[HenryfromMalaysia]

The money changer will be gone soon if the banks adapt to almost zero fee for currency exchange.

Only problem with premium banking is there is likely a monthly fee involved which not everyone can afford.

But banks know that they have to adapt or else will be killed off in the currency / money exchange.

 

 

[Neeranam]

 

2 hours ago, lkn said:

Actually, my bank already offers me the true exchange rate for all transactions done in foreign currency (and no ATM fees when abroad). But this is only for premium customers.

 

Wise has a free MasterCard where their fee is 0.20-0.45%, depending on the currency pairs.

Does your bank use the 1970's technology, SWIFT, which takes a week to send cross border? I can get funds instantly from friends/family around the world for a fraction of what a bank charges.

I can use my Crypto.com card and get 5% back. I can also withdraw money from the ATM for 0 charge(up to $1500 a month I think).

I also get free 1st class Airport lounges, free Netflix, Spotify and a few other goodies. 

The CRO I got back for buy all my Christmas presents last year has also gone up over 200%, so I guess that's more like 15% back(yes, it could have gone down)

 

 

https://crypto.com/cards 

Edited October 4, 2021 by Neeranam

[DrPhibes]

OK, I'm in.  I just created Tulipcoin (TM) which has to be mined using my proprietary software and website that runs like a taxi meter.  The better your machine, the more Tulipcoin you can mine in an allotted period of paid time.  You can redeem Tulipcoin for purchases at vendors who accept Tulipcoin or exchange for other coins at exchanges who use my proprietary TRASH (Tulipcoin Redemption Authorized Software Hub) system where transaction service fees apply.  Tulipcoin secured under full faith and credit of my honest face:

 

[lkn]

41 minutes ago, Neeranam said:

Does your bank use the 1970's technology, SWIFT, which takes a week to send cross border?

We have SEPA in Europe for instant (and often free) payments, hooked up to about 8,000 banks, so this is from bank account to bank account (not transfer between some third party digital wallet). Going outside Europe, you can use PayPal for instant and free transfers, as PayPal is connected to most local banks, so getting money in and out of your PayPal wallet is easy, or you can get a debit card for your PayPal account, like you have done with crypto.com.

 

53 minutes ago, Neeranam said:

I can use my Crypto.com card and get 5% back […]

You definitely have some good benefits there, but, how is this enabled by DeFi?

 

If I am reading it correctly, you have bought $40,000 worth of the CRO token (based on the benefits you list), which you have staked for 180 days, and in return, they have given you a prepaid Visa card (that you can top up), which admittedly, have some nice benefits, but you have risked $40,000 for this, which value is linked to the CRO token, which I assume is issued by crypto.com, so effectively you have paid crypto.com $40,000 for this card, but to get back your $40,000 you have to sell your CRO tokens to someone else, as crypto.com probably won’t buy them back from you.

 

So this is very clever business scheme by crypto.com, and well, I guess you can argue that DeFi / blockchain makes this possible, because I somewhat doubt the regulatory authorities would allow someone to sell non-redeemable tokens like that.

[Neeranam]

2 hours ago, lkn said:

You definitely have some good benefits there, but, how is this enabled by DeFi?

 

If I am reading it correctly, you have bought $40,000 worth of the CRO token (based on the benefits you list), which you have staked for 180 days, and in return, they have given you a prepaid Visa card (that you can top up), which admittedly, have some nice benefits, but you have risked $40,000 for this, which value is linked to the CRO token, which I assume is issued by crypto.com, so effectively you have paid crypto.com $40,000 for this card, but to get back your $40,000 you have to sell your CRO tokens to someone else, as crypto.com probably won’t buy them back from you.

Actually, I only invested about $20k -  they have raised the levels. This card has nothing to do with DeFi, I was just replying to what you said about the WISE card. I highly recommend these cards.  

[Neeranam]

70% of El Salvadorians are unbanked. More now own a Bitcoin wallet than own a bank account. Other countries are following -  possibly Tonga, Uruguay. Just a matter of time. 

[VocalNeal]

Assuming there are no longer banks.

 

If someone has a business do they go to 70% of the El Salvadorians for a loan?

[Phoenix Rising]

On 10/3/2021 at 7:15 PM, Neeranam said:

Everyone in my family prefer to get their allowance from me digitally. 

Even my mother in law has bought Bitcoin, and my old mum in the UK. 

 

 

Here we go again...????

[Phoenix Rising]

21 hours ago, TimBKK said:

Because the actions of banks and mortgage companies within the established financial system were a leading cause of the Great Recession, I can certainly understand why “normal people” would look to alternatives.  

Those who uncritically sing DeFi's praise are not normal people, they're devotees. For a more rational and somber look at the world of DeFi have a look at this article from The Economist.

 

The beguiling promise of decentralised finance and its many perils

 

 

PS. For those who're not subscribers you might need to register but it's free and it gives you 3 free articles a month.

Edited October 5, 2021 by Phoenix Rising

[TimBKK]

3 minutes ago, Phoenix Rising said:

Those who uncritically sing DeFi's praise are not normal people, they're devotees. For a more rational and somber look at the world of DeFi have a look at this article from The Economist.

 

The beguiling promise of decentralised finance and its many perils

 

 

PS. For those who're not subscribers you might need to register but it's free and it gives you 3 free articles a month.

If you are implying that big banks and other large financial institutions were not at fault for the Great Recession of course you are categorically wrong - I don’t know that you are though, although it seems strange to me to post your link about the challenges of Defi in response to what I posted as there really isn’t a correlation between the 2 posts.  Unless you think that anyone who posts in favor of Defi is a “devotee” in which case you would also be categorically wrong.
 

In any event yes, it certainly seems obvious that Defi will face many challenges going forward. 

[Phoenix Rising]

27 minutes ago, TimBKK said:

If you are implying that big banks and other large financial institutions were not at fault for the Great Recession of course you are categorically wrong - I don’t know that you are though, although it seems strange to me to post your link about the challenges of Defi in response to what I posted as there really isn’t a correlation between the 2 posts.  Unless you think that anyone who posts in favor of Defi is a “devotee” in which case you would also be categorically wrong.
 

In any event yes, it certainly seems obvious that Defi will face many challenges going forward. 

It wasn't in reply to your opinions on the Great Depression and I probably picked the wrong article to reply to. My point (which is supported by the liked article) is that the world of DeFi (although new and exiting and possibly the Next Big Thing) is something that should be approached with a great deal of caution and healthy skepticism.

In other words, the opposite way of how the OP and a couple of other fellow devotees seem to regards DeFi. 

 

[Heng]

On 10/3/2021 at 1:55 PM, QPRFC said:

ICP Crypto is the future coin....believe me. 

 

However, this is not financial advice and you should seek professional advice as always ????

Hope so, because I bought at $480 something and now it's in the $50s or so.   LOL.   

 

If it wasn't all BTC gravy, I'd be as frustrated as an anti-crypto/antivaxxer.  

[Heng]

In regards to Defi, I have never really looked at it until I was in quarantine this past week.   Have never really looked at crypto that way.   I was always of the convert FROM crypto into real estate/gold/etc. school of thought, not of the dive 'deeper' into crypto way of things.   

 

Put a few units into the VET and BNB 'click and stake' options in the Binance app just to see how it turns out.   We'll see.

[ThailandRyan]

17 hours ago, DrPhibes said:

OK, I'm in.  I just created Tulipcoin (TM) which has to be mined using my proprietary software and website that runs like a taxi meter.  The better your machine, the more Tulipcoin you can mine in an allotted period of paid time.  You can redeem Tulipcoin for purchases at vendors who accept Tulipcoin or exchange for other coins at exchanges who use my proprietary TRASH (Tulipcoin Redemption Authorized Software Hub) system where transaction service fees apply.  Tulipcoin secured under full faith and credit of my honest face:

 

Your name must be Jamie Dimon....a non believer

[DrPhibes]

1 minute ago, ThailandRyan said:

Your name must be Jamie Dimon....a non believer

Not named Jamie Dimon, but have often been called the Jack of Hearts by the ladies ????

[HenryfromMalaysia]

1 hour ago, Heng said:

Hope so, because I bought at $480 something and now it's in the $50s or so.   LOL.   

 

If it wasn't all BTC gravy, I'd be as frustrated as an anti-crypto/antivaxxer.  

Avoid small cap coins outside the top 10 or 20. Most will end up as nothing.

Not saying that the 10 new everyday listed ICO in coinmarketcap are rubbish but likely :0

[lkn]

3 hours ago, Neeranam said:

70% of El Salvadorians are unbanked. More now own a Bitcoin wallet than own a bank account. Other countries are following -  possibly Tonga, Uruguay. Just a matter of time. 

You do realize that this is everything but decentralized?

 

It is the self-described “world’s coolest dictator” of El Salvador (Nayib Bukele) who has introduced a Chivo wallet with a $30 (in bitcoin) sign-up bonus.

 

But there is a bit of a problem, because Bukele has only bought a little over $35 million worth of bitcoin, but now claims that over two million people have signed up for the Chivo app, meaning that those $30 (in bitcoin) cannot all be backed by actual bitcoins.

 

El Salvador is using USD for trade, they can’t mint this themselves, so they need to get it from abroad, either via export or remittence, and currently, it is mainly through the latter.

 

A cynical person would think that this is all just a ploy from Bukele and his cronies to get hold of the remittance dollars, by offering cheap remittance via the Chivo app, convert them to virtual dollars that El Salvadorians can use (via the Chivo app) while the government pockets the real USD (to service their foreign debt).

 

So in no way does this seem to be a case of banking the unbanked, rather, it is a money grab by their “president”, and there has been plenty of opposition to the bitcoin law. Also, someone reported that he was denied, when he asked to pay his taxes with bitcoin.

 

And half the population of El Salvador does not have internet, nor a smartphone. Tell me, how exactly is bitcoin supposed to work for these people?

[ianxrl]

TATcoin coming soon for tourists. Thailand will take advantage of DeFi