Traditional Finance and DeFi(Decentralized Finance)
Hi, I'm Joey Park. How are you today? I enjoy reading posts in SteemLeo community, since there are tons of interesting posts that give many insights regarding investing. Today, I'd like to say my thoughts that I've been thinking about finance and life for a long time.
Before taking up the main subject, I want to ask a lot of questions.
Q1. Why are people stuck in a rut?
Q2. Why do people need to follow a fixed path?
Q3. Why do people need to get a good degree?
Q4. Why do people need to get a great job?
Q5. Why did people learn only to deposit money in a savings account?
Q6. Why didn't educational institutions teach investing?
Q7. Why did people learn only using the centralized financial system(banking services)? Recently, fintech financial goods such as P2P loans have appeared. Is it really enough? Is it really decentralized?
Q8. Why don't people take problems with an inflation of money into account?
Q9. Who designed and built traditional finance?
Image source: wikimedia
I wanna answer in reverse order. (Q9.) There was the Great Depression in 1929~1930s. Even America was full of unemployed people. In order to recover it, the American government asked the solution to
Jewish people. They advised adopting quantitive easing for economic policies. To make it easier to understand quantitive easing, it is to use the inflation model printing(issuing) a lot of money. The representative example is New Deal Policy.
Image source: farandwide
Image source: lifegate
Many central banks still use
the inflation model to expand and grow their economy. It means that
the value of fiat money is decreasing. However, people don't consider inflation. Most people may think they will be able to make a lot of money from labor in the future. Yeah, I agree with this opinion a little bit. But, the gap between the rich and poor has been increasing. Why?
Image source: goldmoney
I think it is caused by the inflation model. I love capitalism. I hate communism. But, the inflation model for expanding the economy is not right. Inflation causes a loss of value of fiat money. What can we do for it?
What is the alternative instead of fiat money such as USD? For now, anyone doesn't know.
It could be STEEM and BTC.
So, my conclusion for Q8 is
people must take inflation into account. In other words, people must invest their money into cryptocurrency, stock, real estate, gold and so on.
Image source: pixabay
Before answering for Q7, Q6, Q5, I'm still wondering why teachers didn't teach investing, and also I've been surrounded in the vibe that deposit money into a savings account is only right.
Image source: toss
Luckily, in recent times, many fintech companies have appeared and they provide P2P financial services. Well, it's better than before. But, is it really enough? Can't we use a more transparent system such as blockchain?
Can't we all be owners of bank? I think blockchain can make a more democratised financial system.
Image source: TheDaoMaker on Twitter
So, my conclusion is that
people need to look at blockchain technology. One of the alternatives instead of traditional finance is STEEM. STEEM lending service is pretty differentiated from other cryptocurrencies. When you buy STEEM, then you convert STEEM to STEEEM POWER that is not a liquidity token, and you can delegate(lend) your STEEM POWER to decentralized application companies receiving
passive income(STEEM or tokens) 10 ~ 20% per year. As well as users(P2P)!
The differentiated point is that you have control of your STEEM POWER, since you have an owner key. So, I think this system is rather decentralized and democratized than other lending services.
Now, is it enough to answer for Q4, Q3, Q2, Q1? We don't need to be stuck in a rut. It's time to recognize reality!