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Editor: Remember to follow
Source: DT Journal
Original title: Bitcoin and DeFi in the wake of the FTX debacle
In the past week, I have browsed the discussions of Bitcoin and DeFiists on the collapse of FTX, and these discussions made me very interesting.
both have the mentality of "if not your key, it is not your currency", but they have a deeper difference. Let's analyze what are the differences between them.
BTC Perspective
All Bitcoinists have reservations about Ethereum as an asset and platform, and many people do not trust any smart contract platform, or even smart contract platforms based on Bitcoin.
main debate centers on: the lack of security of these smart contract platforms and the creation of smart contracts undermined Bitcoin’s original vision. It allows for speculation, usury and fraud.
Bitcoinists' reaction has always been based on the argument that if you agree with their worldview that Bitcoin and "cryptocurrency" are two separate things, you have no reason to use "casinos" like FTX. And, even if you use it to buy Bitcoin, you should withdraw and keep it yourself.
DeFi POSITION
DeFi PTL11 Most of the PTLists believe that the problem with FTX lies in the centralization and hosting nature of FTX.
They think: if possible, centralized services need to die completely, or be limited to some very narrow activities. The vision of the smart contract platform is actually to get rid of these trusted intermediaries, which is a way to replace centralized products with decentralized products. Despite the technical risks (hackers) and initial trust/centralization risks, they are very popular.
(Generally speaking, most DeFi protocols require some trusted setup before decentralization, some of which have been pushing for the goal of decentralization. Since decentralization is a scope, it is difficult to really draw the boundaries that DeFi becomes too centralized to be called DeFi.)
Moderate
In the DeFi camp, there are also milder views. People believe that our world will become increasingly decentralized, coupled with regulated centralized services.
This field is typical of Coinbase, Bitwise and most centralized service providers.
My personal opinion
I have seen enough useful innovations from smart contract platforms and I think they are valuable.
However, I agree that most of the potential of DeFi is in the future, and many benefits are theoretical. But the same argument applies to Bitcoin for 14 years. Most of the original vision has not yet been realized.
NFT For the first time, it brought large-scale commercialization to cryptocurrencies, forgetting the speculative price. Here I mean people like to buy digital collectibles. Its price can go up or down, but this behavior won't go away. This is the first instance of a large-scale crypto-native business.
Decentralized exchanges like Uniswap, mortgage lending protocols like Aave and Compound have become a reality and are useful to some extent. Stablecoins of varying degrees of centralization are also useful, as someone living in Latin American , I can prove it.
decentralized storage, computing and other infrastructure are also operating today and used by people.
Most of these features cannot (or will not) be built on Bitcoin. So, when I see so much evidence to the contrary, it's hard for me to agree with the idea of using only Bitcoin. I really appreciate the simplicity of the BTCist view, but I find it can’t effectively push the boundaries of using the technology.
I am a realist and many services are likely to still need centralization. So, as boring as it may be, my point is consistent with DeFi’s moderates.
Although I doubt the regulatory behavior of the incumbents, I believe reasonable supervision is necessary and we need some degree of centralization.
Editor in charge: MK
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