So you want a revolution?
Crytpo-currency has taken a great deal of criticism over the years. Ironic. Since practically speaking, all currencies if pretty much digital. We have physical representations of currency in our pockets, wallets etc simply because of a hold-over. However, if you have ever made a purchase online, with your debit or credit card, or received a loan, the transfer of currency is nothing more than simply 1's and 0's. It's never really immediate,despite what your bank account or television and movies will tell you. There are a number of mechanisms that go on in the background before the currency is actually transfered from one party to another. That is why when you are getting a refund, it takes 3-5 business days, whereas when you pay for something, it "leaves" your bank account immediately (the real answer is yes and no). When a purchase is made there are many layers involved in the transaction. Your bank, their bank, Interac (in Canada), and numerous other intermediaries depending on jurisdiction. That's why it is not a quick process. Merchants can actually not see the deposit for days.
Crypto or Fiat?
That is really the new question, which is better and why should I care. There are a variety of reasons why many are leary of crypto currency. Largely because much of the original publicity was around how the digital currency can be used for illegal activities, failing to mention that any currency can be used for illegal acitivites. Yes, the pseudonymity of crypto does allow for a certian level of privacy and anonymity, there are still ways to track it and trace it. The other argument, it is not real currency because it is digital was already discussed above. In short, there really is not difference between the two forms of currency, except in one critical area, privacy. Well, maybe a second area, speed. Since the intermediary process is minimized in the crypto world and as such the speed of transaction can be close to real time...
Decentralized Finance (DeFi): what is it?
DeFi is a form of finance that is blockchain based and does not rely on any central financial intermediaries (brokerages, exchanges, or banks etc), instead it uses smart contracts on blockchains, the most common of which is Ethereum. The DeFi platform uses a layered architecture and highly composable building blocks. The platform also allows people to lend / borrow funds on the platform, speculate on price movements on a ide variety of assets using derivatives, trading cryptocurrencies, and earn interest in savings-like accounts. All of this while insuring against risk. Why? Because in the cryptocurrency world reputation is critical. Especially because it is so one to one, or one to many or many to one, and you are dealing with people after all, not institutions. When dealing with people reputation is crucial. While many of us have something in our pasts, that can be seen as questionable the reputation within the crypto space may offer you a better option over traditional lending paradigms.
Yes. There are problems. No platform is problem free. The main issue is an incorrect transaction with a DeFi platform or deployment of smart-contract code containing errors cannot always be easily rectified. The fact is that coding errors, and hacks, are common. Further, the code is generally open-source software that can be easily copied, this can create more problems and can create a destabilizing influence on the platform. Other factors could be that the person or entity behind a DeFi protocol may be unknown, and may disappear with investors' money. DeFi has been compared to the initial coin offering craze of 2017. There are high risks for investors and speculators in this space, and it can sometimes look like a "Ponzi-scheme"
Overall, while Privid is a privacy oriented organization, we see other areas as viable. Blockchain is not just cryptocurrency, it is a number of things. As such, it's always important to look at the other aspects of the technology that are going on and that impact decisions, simply based on how things are perceived. Does crytpo have a future? Definitely. Does DeFi? Yes. Are they without challenges? Not by any stretch.
That is always the case with "new" technology (I say "new" because it really isn't new, it is simply new in the sense of public awareness). As the technology matures further, there will be more opportunities available and this will create yet more opportunities. Some will be great. Others not so much. The crucial thing with this technology is the technical team behind it.