We did, and those startups got into the state they were in because they chose to avoid getting insurance on their deposits that exceeded the FDIC limits. That's not the fault of of the financial system. And the financial system protected them well over and above what it had committed to do.
> All because people had some sort of belief like you do.
Not at all. If I had a large deposit like them, I would have actually used the services that would have protected my deposits.
> This is simply not true.
It isn't? What protection is there?
Hilarious. On one hand, you're saying that cyrpto is this big mess full of bad actors and on the other hand, placing no blame on a financial system that can just blow up in a week because of poor design and oversight.
Just like it isn't the fault of cryptocurrencies that there are bad actors. It is just intrinsic that there will be issues in any functioning system.
> What protection is there?
You said none, but I can provide you with at least 3 different decentralized insurance protocols with proven track records. Here is one: https://nexusmutual.io/
More will come over time and demand. DeFi is still quite new.
You've taken my stance on both counts to an extreme that mischaracterizes them. I never said cryptocurrency was a "big mess", and I never said that the established financial system is some paragon of virtue and perfection.
What I said is that the financial system did what it promised to do for those people who were affected by the bank failures.
> You said none, but I can provide you with at least 3 different decentralized insurance protocols with proven track records.
And yet, until now, you didn't actually mention any of them. I can't read your mind.
The one you link to doesn't seem to cover the most important protection (to me), though. I could be wrong -- the website isn't exactly clear. Does it offer the same coverage as I can get through chargebacks on a credit card? Does it cover me if I accidentally send money to the wrong destination?
Wait, there is a law that says that when a bank fails, the government has to step in and bail them out? Wrong. Otherwise, all banks would get bailed out.
> Does it offer the same coverage as I can get through chargebacks on a credit card? Does it cover me if I accidentally send money to the wrong destination?
No. You're asking for a credit card product. I don't believe that crypto has to be a credit card to be effective and useful. A good analogy is Zelle, which allows you to transfer money, but they don't bail you out. I'll tell you... even with bank wires, you send money... it is gone. Our finance department got phished last year. They didn't get the money back.
I'm curious when the last time you accidentally sent money to the wrong destination though. Is that really a common use case?
With crypto it doesn't matter whether it's you sending the money to the wrong address, someone who has hacked your account sending the money to the wrong address (and if you have insurance to protect against this, you'll have to prove it wasn't you), or a smart contract that someone slipped you without your knowledge sending money to the wrong address. You're out the money regardless. The last case isn't possible in non-crypto, and in the middle case you're protected by depositor's insurance in the US.
And yeah, I'm not using Zelle or a wire transfer unless I know who it is and what it's for beforehand.
For this reason, the choice is to only use credit cards where merchants have to pay exorbitant fees and end users have to pay massive APYs for borrowing.
If only someone could at least try to come up with a better system.
Payday loans and cash purchases? We have a variety of "systems", each with pros and cons. And hopefully that kind of diversity will continue into the future. For daily consumer purchases most crypto systems seem to have more cons than pros. For investment purposes I really don't know. And as a store of large chunks of value, maybe crypto will have an important role at some point.
We just literally witnessed several banks fail in the last few weeks, along with a litany of startups freaking out about how they were going to pay their staff. The government had to step in to prevent things from going totally ape shit and we are still on the edge of things getting worse by the day. All because people had some sort of belief like you do.
> With cryptocurrency, I have none.
This is simply not true.