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.
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
The advantage to people is that they can more flexible.
The disadvantage to people is that they can be more irrational.
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?
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.
> 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?