Sirwin
Sirwin

Roadblocks to Widespread De-Fi Adoption

By Carded0421 | CryptoSphere | 5 Dec 2020


The widespread adoption of De-Fi has not happened yet because of a few fundamental flaws in the ecosystem of blockchain governance.

One such flaw relates to how it costs money to send money in every transaction, the other flaw is the lack of physical currency. The reason a physical currency doesn’t exist is governments have said it is illegal to mint a currency, thus ensuring that their currency continues to be used and they have the ability to manipulate their currency standards at will. The digital operation of adoption of crypto-currencies then ‘formally considered to be property, not currency, by standards of law’ will be to remove the cost associated with networks, ideally implementing exchanges in which the adoption of any currency or monetary unit can be transitioned to property and vice versa freely, without cost. The point is twice emphasized because when the network reaches a 0 cost barrier, the network will explode in volume, thus ensuring De-Fi gains traction far above and beyond all currencies currently in existence because the medium of exchange will be facilitated without cost. The way for various Currency operators or blockchain operation networks to achieve this will be through some kind of alternative medium rather than relying on the chains themselves to generate value from the currency being used.

Some forms of alternative value could be advertising on the network or having in-house goods and services being distributed within the network itself. One obvious way would be to implement the free-network blockchain into a credit card company, thus enabling the transition between USD for merchants. One operation of this is how many different cryptocurrencies currently exist and the many different networks and opportunities between all of those. Seamless transition between currencies is the biggest problem in De-Fi right now because of how many different coins are in existence, and how many more are likely to continue popping up. The best and most powerful solution will devise a way to allow anyone, anywhere to freely translate one medium of exchange into the next.

Some coins and De-Fi applications have attempted this, but where they fail is requiring people to act as the mediums of exchange, requiring a storehouse of value in order for the exchange to be facilitated, or acting as third party networks to connect different coins with various exchange rates. This is not the solution to the current problem. A proper medium of exchange will be able to facilitate exchanges and it will be act as an intermediary between any two participants without cost, at any level of trade. Thus, no storehouse of value will be required, it will simply connect two 3rd party participants. How will this network make money? The network would have to look for other forms of intrinsic value, by other forms of separate leverage or arms of the company that start a credit card company and helps people manage or make payments, reducing fees for businesses to accept any kind of cryptocurrency as the company would be able to help ensure the facilitation of that exchange into a stablecoin (Think Dai, USDT) if they are not able to immediately make a 3rd party exchange on the network. That kind of large scale network could easily be a multi-billion dollar industry and would help increase the popularity and use-case value of cryptocurrencies. This could transition the company into acting as a regulated banking services sector.

Why cryptocurrencies at all, why not cash? The distributed network ledger is an immense value added service which ensures fairness of operation (Think Catch me if you can) no agent would be able to manipulate the network through double spending. Thus these electronic networks are arguably a better technology and system of exchange than the current fiscal monetary policy which operates through government oversight.

Hopefully a company is able to bring the cost of De-Fi and exchange down to zero. I do not see any companies in which I can add a snippet of Code into my website that will allow the deposit of all kinds of cryptocurrencies for me, without having to copy and paste 100 different receiving crytpo-addresses. A free medium of exchange is imperative if crypto is to receive widespread adoption and utility.

 

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Carded0421
Carded0421

Cool Guy, does stuff.


CryptoSphere
CryptoSphere

A blog about CryptoCurrencies, their current and potential applications, and a rank and file of Crypto Projects and how they are faring in the development community.

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