Dec 23, 2021
Crypto Libertarianism, Web 3.0 & Covid 2.0
During my final year at university, I became actively interested in decentralization and during my corona time I went down the “crypto — DeFi” rabbit hole. At first I was attracted by the overall market speculation, yet in the end I was fascinated by the potential and capabilities of blockchain projects. Trying to keep this article short, I concisely note some of the reasons on why I want to be part of crypto’s further growth and upcoming wide adoption:
∙ Web 3.0 will decentralize the way people interact with one another by eliminating centralized “web portals” that retain and sell users’ private data in exchange of a convenient web experience. These tech giants increased their bargaining power thanks to sharing (up until now) private user information with governments and other entities (massive civil surveillance schemes, corruption, lack of corporate transparency). Additionally, users of free web services lost ownership of their digital id and footprint, since they became the “product” being sold to third party services. As witnessed, the internet began as an interconnected village, then proceeded to a centralized “mega-city” and now hopefully, Web 3.0 can turn our connected devices into a “decentralized” village once again without relying on big centralized gatekeepers, giving away our privacy and sensitive data
∙ The majority of tech giants consider their users’ data as their own property. This results into controlling who is going to process and analyze them, often denying/ constraining access to teams or analysts outside of the parent company (lack of transparency). On the other hand, in Web 3.0 internet, no one owns the network, the stored or generated data. This poses a great opportunity for teams focusing on analytics, taking advantage of the enormous data availability on blockchain. Collecting, clearing and analyzing these data, offers a deep understanding of the crypto-defi ecosystem. Better analytics lead to better decisions and to an even more thriving community
∙ Non-custodial wallets used in DeFi (trustless architecture) increase the fund distribution across the decentralized network. This could drastically discourage hackers from attacking and draining the large reserves of centralized exchanges, as well as preventing personal data breaches by government authorities or hackers. Consequently, users are fully responsible for keeping the keys of their wallet safe while mitigating the bank-run risk at the same time
∙ Despite being just 2 years old, DeFi is directly competing and “threatening” legacy banking. At first, banks lost market share to fintech startups through payments, being left with their last native product: Lending & Borrowing. DeFi will ultimately wield the final blow to institutional banks by stripping them off their remaining operations, as it already does
∙ The rate of growth and innovation in DeFi, building the financial industry in a more efficient way, from the ground up (Decentralized: exchanges, lending & borrowing platforms, derivatives, fund management services, insurance and payments) in less than 2 years
∙ Yield farming’s ability to reward stakeholders with reward tokens without having to exchange them for other assets (as performed in centralized exchanges and DEXs)
∙ Smart contracts: Powered by algorithms, can automate many daily functions that up until now required a centralized intermediary (with all the corresponding human flaws) to approve several actions (supply chain management, banking & finance etc.). In many aspects of businesses, algorithms tend to provide great deal of value when users interact with their content, products or services (personalized ads & content, customer retention, cross-selling, up-selling, as seen in Google search, YouTube, Amazon etc.)
∙ The smart contract’s “code is law” paradigm, along with the “math logic” behind it, will facilitate transparency, justice, meritocracy and democratization of quality services to all people, without checking their background and dividing them in privileged and underprivileged. For example, many investors lack exposure to IPOs or Private Equity opportunities just because they can’t contribute large sums of money
∙ Cryptos adaptability to the needs and circumstances of their users and overall environment. A recent example is the progressive transition of PoW validation to PoS, as a faster and “greener” validation technique adopted by Ethereum and other crypto projects. Thus, maximizing their overall utility and viability in the long run
I honestly appreciate your time reading these words, and will be looking to see yout thoughts, comments and suggestions.
Until next time…
FV
