"Real world" finance exists, at least nominally, to fund real business activities. People put their money in banks, who in turn loan it out to real businesses that need capital to build shit and provide services. Speculators provide at least a useful counterparty to real businesses that need to hedge, e.g. farmers selling their product in the future or airlines that need to buy jet fuel.
With crypto "finance", I don't hear about or see any of these types of activities - it's always just plowing money into a different crypto scheme.
I would be more than happy to admit I'm out of the loop and just unaware of the real business value that crypto provides. If you have any examples I'd love to hear them.
This is what the people lobbying for regulation are trying to achieve. If you want to hear about these activities, that’s where you should look.
Can't you say the same thing about the finance system in general? eg. portfolio loans are just taking one financial instrument (stocks), converting it into another financial instrument (cash), just so you can buy yet another financial instrument (more stocks). Same goes for options, futures, swaps.
For a particular example of an interest rate swap, anyone whose business incomes are closely correlated to short-term loans, and whose expenses are closely correlated to long-term loans (or vice versa) would care deeply about them, because they allow them to hedge themselves against unpredictable changes in interest rates.
I'm just looking for some actual use cases of using crypto finance to finance something in the real world, and I can't seem to find any.
DAOs (distributed autonomous organizations) and ICOs both fit the bill.
Edit: for erroneous autocorrect of Venn
Currency is largely a case of our particular choice isn’t that important, we just need to choose one, and everyone needs to agree on it. You have examples of other choices in prisons, where cigarettes and ramen are used, and the USD when it dropped the gold standard.
Crypto is just another choice.
Of course, there are certain things you want in a currency, that make some choices better than others, so you can’t just pick anything and say it’s the same as anything else (e.g. gold standard has a problem in that you can’t fully control the supply — if a new mine is found, then you just have to deal with the consequences of it’s existence; but this is less likely than say seashells. It won’t kill its wielder’s either, like say the choice of lead. Etc.), but you’re still left with quite a variety of choices, and certain properties have different impacts at different economic scales.
From that perspective, there’s nothing really stopping crypto from being a valid choice. The issue is largely in whether it’s a good currency (it has useful properties versus other choices), and whether it’s better enough that you can convince enough people to make the switch (you need people to believe that they get crypto from you, they can use that crypto to exchange with others).
The story however gets muddled because currencies can also be used as a speculative asset, driven by your belief in crypto being convincing enough to get people to make the switch. And you can also believe in other’s believing that it will switch, and bet on that. Which is where most speculation comes from — not the belief in crypto itself, but in that others will believe in it recursively.
This puts a floor of demand to prop up fiat currencies that doesn’t exist for crypto.
The question ultimately is whether crypto’s properties as a currency is better enough to displace the current choice, and how much you / the market believes in this scenario occurring
some of us have crypto backgrounds of one or another type (NSA for example), and think it's overhyped.
the ever diminishing supply and narratives, technical or otherwise, only serve the greatest ponzi with the simplest ponzinomics.
dont have to overcomplicate a simple idea