This is a fine sentiment, but [you] [don't] [link] [every] [word] [in] [your] [sentence] to a dictionary website either, because you expect the reader to know English. In the same way it's perfectly fine to write an article with a target audience that understands the concepts being discussed. Not everything needs to be written for a general audience; this website is exclusively about cryptocurrency, and particularly dense with jargon and slang at that.
Sure, the UI/UX of a traditional link isn't desirable, but I do want every word to be linkable to the dictionary.
At least, way back before I started using blockers.
Your whole comment sounds like confirmation bias to me. You don't like crypto, therefore all the new terms you've never heard of must be bad stuff, everyone is out to scam people and crypto isn't "on the level".
Everyone I know who is into this is very strongly into it, and they can never really explain why. Lots of non-specific sentiments emerge, and rather quickly, but no real this-changes-things-because-of-X details or explanation about anything. It's the same pattern I've seen from people who believe in psychic readings and Tarot cards, except those two groups can get very specific, it's just about imaginary things.
Age is a superpower. I have a few decades behind me. You see patterns in behavior, because people are not snowflakes, and incoming generations make the same mistakes the outgoing generations have made, and must learn the same lessons previous generations have learned. This generation is trying the things that the other generations already tried, etc. Some things change, but the fundamental things people try to do with their lives, those don't really change much generation to generation.
Experience is a good teacher. Now, maybe I'm wrong about cryptocurrency, I'll gladly admit that. And I would counter by saying that "I'm seeing the same broad strokes I've seen previously, with different names."
From what I know this has mostly been described in dystopian sci-fi before, not really tried in earnest.
I'm curious about what you've picked up as well. Like people not being able to explain why they're into it. Could you elaborate on those things a little bit?
That's my (of course limited) experience with cryptocurrency advocates.
The top projects: Aave, Compound, Uniswap, etc. have been audited several times over, publish their smart contract source code for further review, offer millions of dollars in bug bounties and inherently the locked value acts as a giant bug bounty. I feel comfortable with these projects that have been around for several years now. But it is an open ecosystem and not all projects are created equal. You can also take out insurance for the biggest protocols for additional protection.
Then what's the point? I can already take out insurance in the "traditional" banking system (e.g. every checking account has FDIC).
1) Decentralized finance is extensible, pluggable, open, auditable, and non-custodial. This means, when you want to integrate, say a popular crypto money market like Aave into your application, you don't need Aave's permission. You can just have your application interact with Aave's smart contract. (https://aave.com/) 2) When a smart contract is properly engineered, you retain full 24/7 access to your funds with 100% uptime guaranteed by the base chain that it sits on (Ethereum in most cases). You do not get Robinhood-like situations where all of a sudden they turn the buy button off on some stock like what happened two months ago. 3) Everyone has access to the same information. It's all on the public blockchain. There are no backroom deals, it's all in open-source code on the chain. It's all auditable. 4) The yields on so-called stablecoins (cryptos that are pegged to some traditional currency, like USD) are higher on DeFi. You can earn 7 or 8% or more on DeFi, because you are effectively acting as your own peer-to-peer bank and lending out your funds directly to a collateralized third party.(https://compound.finance/) 5) Decentralized finance has already introduced things like decentralized exchanges, which allow people to crowdsource liquidity. You can earn a yield for participating in a liquidity pool on Uniswap, for example (https://uniswap.org/) 6) There are additional exciting applications in this space, it's currently undergoing a Cambrian explosion of activity similar to the early internet. I cannot explain all of this in a short-form HN response, but there's real value there. Real innovation that will change finance forever. If you want to learn more, please check out:
1) https://newsletter.thedefiant.io/ 2) https://newsletter.banklesshq.com/
However, you can build this on DeFi today quite easily (see yearn for an example), and you don't need to ask anyone for permission, you just hook things together. The smart contracts can move money around within DeFi based on algorithms that will find the best rate of return on various collateral coins. This is why people are calling it money legos. It allows rapid innovation from the edges, instead of the center, which is insanely powerful. I hope this inspires you to do more research.
The lending part is relatively self-evident. You can pool funds together and the contract automatically issues loans when requested provided the user has X amount of collateral. Most "DeFi" lending basically acts like a margin for margin trading at the moment.
The liquidity farming however is a bit more practical. It's creating pools of liquidity for decentralised exchanges and various "cross-network" smart contracts to temporarily source coins out of.
There's a lot of dogfooding going on but the general system behind it is useful. It's just overly simplistic and the code lacks pretty much any scrutiny in a lot of these cases.
A lot of the loans are 1:2, 1:4, or greater depending on what the currency it is being traded in is. If your total collateral dips below that multiple of the loan, you forfeit the value of the loan from your collateral plus some penalty fee.
Cryptocurrency doesn't provide any new capabilities at all. Money and trading existed before. Price fluctuations existed before. Markets existed before. Buying and selling existed before. But now, because it's so new, and because it's not technically money, but a virtual good, this is all unregulated and fertile ground for people who want to take advantage of others.
This is why it seems to me so much like a sales pitch to me when people talk about it. It seems very much like they need you to commit money in order to get anything out of the arrangement themselves. This is "Jebediah's Miracle Snake Oil" with a new name.
The new capability that cryptocurrency provides is that money is now "programmable" it's a fusion between money and software.
Wether or not this is a benefit, is subjective, but IMO it's a humble beginning with epic potential.
B) it's not programmable; it's an inert thing; proof of work or storage. Programs generate it according to rules that people set. (Real money is created according to rules that people set, as well, so it's "programmable" too, if you look at it in the same way.)
There is nothing new about cryptocurrency.
I could dump $1000 into bushels of corn and get the same exact effect. To grow corn you need to have space to grow it, fertile soil to grow it in, and you need to work, over time, to plant it, fertilize it, and to control pests and invasive weeds. At the end of the growing season, you harvest and you store the corn in a grain silo, and you wait for the price to go up to a point you're comfortable with before you sell it.
Same with wheat, soybeans, livestock, real-estate and so on. None of those things are currency, but at least they're tangible, and they can all be traded for money, just like cryptocurrency.
There is nothing new about cryptocurrency.
A - Of course it's not fiat money, but it doesn't need to be. The money in your bank account can be described as virtual too. Folks transact in crypto all the time for goods, services, and "conceptual" transactions like DeFi and NFTs. Maybe it's not widely adopted enough for you to buy a 6-pack of beer at the corner store, but that doesn't mean it's not money. The money in your bank account is just as virtual anyway by your definition. For example: I can't pay with Shekels at a Walmart in Iowa, but I can pay with my debit card and have the bank convert it to the currency in my location, etc...
B - When I say it's programmable money, I'm talking about things like the EVM. Calling it programmable money is reductionist sure, but in effect that's what it is. Cryptocurrency and dapps provide a platform for folks to have complex transactions. Just because you don't want to participate in those transactions doesn't mean others aren't, they clearly are. Also, this stuff doesn't need to fit the traditional definition of currency in order to be viable. To me, it's a distributed computing platform for the exchange of value. Maybe you think it's worse than what we have already, and that's fine, in many way it is, but that doesn't mean it doesn't have benefits of its own.
Totally, this Gamestop stock market stuff is crazy. Oh, you were talking about cryptocurrencies?
So this is apparently about some stock market for cryptocurrencies, looks like? I think so.
The first few paragraphs of the analysis of the post-mortem contain so many new terms that I am never likely to trust anyone that pushes any type of cryptocurrency, ever. This is pretty clearly "The New Scam" type that is fashionable. People are regularly getting busted for the old fashioned pyramid scheme, so I guess something else needed to be invented.
This stuff is unregulated, prices are easily swayed by a few famous individuals or sometimes a lot of unknown people, en masse, and you can earn and lose real money by trading the stuff. Hard pass. This article just reinforces to me that my decision about that is correct.
I do not like telling people that their interests are bad, because I'm sure in some ways blockchain stuff is at least semi-useful. I mean there are other ways to provably make ledgers read-only, but whatever. I'm not trying to stir anyone up, is what I'm trying to say. Cryptocurrency is just so clearly not "on the level" in my eyes. Sorry. :(