Finance is broken but DeFi isn't the solution | Hacker News Reader

Finance is broken but DeFi isn't the solution

codeofhonor.substack.com

I really, really wanted to like DeFi. Banking has been a huge hassle and hurdle for my family throughout my entire life (for lots of personal reasons I can share privately if you're curious).

Yet DeFi doesn't really help at all imo. I wish all this energy went into making the system we have better, instead of trying to replace it with DeFi.

Why would you want a centralized authority forcing you to do KYC so it can spy on you, and multiple layers of centralized intermediaries, over a better developed DeFi system, where no one controls you?

> That’s my gripe, man - when you login to a site with your Ethereum wallet instead of the Github login button, why? Because it’s easier? As if.

I do this on sites that support it. Spinning up a burner wallet for a site is easier than spinning up a burner gmail or temporary account.

> web3 evangelists tend to argue why the user should accept a sacrifice in quality for moral benefits like privacy or freedom

Is privacy really just a moral benefit? Though I admit that it definitely isn't a benefit that the mainstream cares about, which is unfortunate

What exactly is broken about finance? Is it the fact that it has become completely disconnected from real world value or is it something else?

>fact that it has become completely disconnected from real world value

Yes, but in this post I really mean "banking". As someone born in a rural area in a 3rd world country, I've seen how people struggle to interact successfully with the banking system. To this day, my documents are a mess but are finally in order enough.

I would love for the promises of DeFi to happen. Cheaply send remittances to my relatives? No more navigating KYC laws that always want the particular document I don't have, and not worry about PayPal just randomly shutting off my account and taking my money?

But DeFi doesn't really do this imo. As I put it in the post, it's like trying to solve loneliness with Omegle. It makes sense kinda but just isn't the right path forward.

That makes sense. I'm not familiar with PayPal policies, when do they shut down accounts for sending remittances? Is the policy listed somewhere?

I was using PayPal for this and got shut down, they never gave me a reason. I assume I just seemed too "suspicious" by some vague algorithmic standard.

That is unfortunate. You're probably not the first person this has happened to and won't be the last so it may be possible to file a class action lawsuit against PayPal for closing legitimate accounts and not providing a reason. If this is happening on a large enough scale then there is a business opportunity here by using DeFi techniques to make a decentralized remittance network.

I'm not sure if there are PayPal brokers but it's probably possible to use a blockchain to verify fund transfers and keep track of trusted and untrusted brokers. You might also just be able to create a volunteer network. I don't use my PayPal account for much anyway and wouldn't mind being a broker if there were instructions for what to do.

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