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Comment by moistrobot | Hacker News Reader

I'm glad it went well for you :)

All of those guarantees are under threat of legal punishment enforced through court systems.

All of those guarantees are given to you based on good standing with various institutions. The bank, the intermediary, the seller.

If you were a person who was not in good standing with a bank, but you still had the money, could you have completed the transaction?

Technology has a trend of destroying middleman industries, as they don't provide value and take a portion of the proceeds for themselves.

DeFi, in this case, is targeting the financial institutions because we now have technological means to replace banks and lenders. Does that mean this process is smooth? or ready for mass adoption? Not necessarily, but the destruction of banks by technology is inevitable. It's just a matter of when

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> Technology has a trend of destroying middleman industries, as they don't provide value and take a portion of the proceeds for themselves.

So, these middlemen that "don't provide any value" guarantee that: my money isn't stolen, that I get the apartment I was shown etc.

So, you've removed these middlemen. How exactly is your technology going to solve this?

> DeFi, in this case, is targeting the financial institutions because we now have technological means to replace banks and lenders.

No, you don't. With banks I can revert a fraudulent transaction (I paid, but the goods never showed up). How is defi solving this simple case?

If I'm a person who has money but is in bad standing with the banks, maybe I shouldn't be able to do financial transactions at all. It's that, or I'm imagining the wrong reasons why a person with money would have trouble with banks.

Could you get more specific about the reasons or the definition of a financial transaction? Not being able to do financial transactions seems like a slow-motion death sentence.

Totally agree, as long as the reasons the banks have are valid.

The problem is that that decision is made by people. Standards of conduct are not universal. What if political affiliation or COVID vaccination status affects your ability to transact with a bank, even though those things have nothing to do with buying or selling real estate

It is I think vastly better for people to make those decisions than for them to be made by smart contract. The institutions we discuss now are at their core social systems.

I think that's a totally valid opinion.

The advantage to people is that they can more flexible.

The disadvantage to people is that they can be more irrational.

Are you suggesting that code is more rational than the imperfect people who implement it?

Even within crypto/defi, it's still people making the decisions. People wrote the algorithms. The only advantage I see there is that, in theory, you should be able to see what rules are encoded in that algorithm, so it's slightly more transparent in that sense.

On the negative side, though, there's essentially no rule of law to prevent the people making the decisions in DeFi from doing things that are bad/illegal/invalid.

> What if political affiliation or COVID vaccination status affects your ability to transact with a bank, even though those things have nothing to do with buying or selling real estate

In the regulated finance world, these sorts of restrictions would be disallowed by the rule of law. You can sue them if they try to enforce those rules, and depending on your jurisdiction, you may win and indeed win damages. What's the equivalent in DeFi? Who do I sue? What court do I ask for relief?

> Even within crypto/defi, it's still people making the decisions. People wrote the algorithms. The only advantage I see there is that, in theory, you should be able to see what rules are encoded in that algorithm, so it's slightly more transparent in that sense.

Agreed. People still create the system, but they have zero to little sway in each individual transaction. So, the system can be biased, but with increased transparency, that should become apparent.

> On the negative side, though, there's essentially no rule of law to prevent the people making the decisions in DeFi from doing things that are bad/illegal/invalid.

Very true, there's a lot of scamming going on. It's still very bleeding edge and not ready for mainstream adoption.

> In the regulated finance world, these sorts of restrictions would be disallowed by the rule of law. You can sue them if they try to enforce those rules, and depending on your jurisdiction, you may win and indeed win damages. What's the equivalent in DeFi? Who do I sue? What court do I ask for relief?

At least in the US, this is not the case for payment processors. Banks may be under more strict regulation. Visa/Mastercard can revoke the ability for anyone to process transactions on their network, even if the activity is completely legal. E.G. OnlyFans/Pornhub recently.

> > On the negative side, though, there's essentially no rule of law to prevent the people making the decisions in DeFi from doing things that are bad/illegal/invalid.

> Very true, there's a lot of scamming going on. It's still very bleeding edge and not ready for mainstream adoption.

Could you elaborate how you think this problem will be fixed for mainstream adoption?

I wish I could. If I knew how, I would be implementing this as fast as humanly possible. The first person to fix this problem will make $1 billion, easy

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