Re:Ask HN: What Is the “HN” of “Web3”, Crypto, DeFi, NFT, etc
by SkyMarshal on Sunday November 07, 2021 @12:07PM
(#29141231)
I should clarify, I don’t consider stablecoins to be decentralized nor cryptocurrency. So when I say “cryptocurrency is a debtless financial system”, I’m not referring to stablecoins, but only to the decentralized and trustless components of the overall ecosystem.
Most stablecoins are run by a centralized, trusted third party maintaining a dubious peg to the centralized USD and will probably get taken down by some Soros breaking-the-pound style attack eventually.
But Bitcoin and most other major cryptocurrencies predate stablecoins, and will survive them.
Additionally, most of the collateralized DeFi leverage schemes you reference require over-collateralization. Since no identity makes margin calls impossible, effectively the margin call is done up front as a contingency in the form of over-collateralization.
A debtless, over-collateralized financial system is an interesting case study in financial in/stability. It’s certainly a different beast from the traditional financial system.
Most stablecoins are run by a centralized, trusted third party maintaining a dubious peg to the centralized USD and will probably get taken down by some Soros breaking-the-pound style attack eventually.
But Bitcoin and most other major cryptocurrencies predate stablecoins, and will survive them.
Additionally, most of the collateralized DeFi leverage schemes you reference require over-collateralization. Since no identity makes margin calls impossible, effectively the margin call is done up front as a contingency in the form of over-collateralization.
A debtless, over-collateralized financial system is an interesting case study in financial in/stability. It’s certainly a different beast from the traditional financial system.