Will DeFi change the world? I think so. For exactly the same reasons that cryptocurrencies that have
certain characteristics that I care about are changing the world and will
continue to change the world. So, if you ask me what's special about bitcoin, I will say
what is special about bitcoin? How do I know the bitcoin is special? Well, I mean, obviously
because it's bitcoin. But let me explain my thinking. Why is bitcoin special?
It's special because it has certain properties. These properties come from decentralization. And I've
characterized these properties with an acronym to help me remember how to evaluate if something is
as special as I think bitcoin is. And that acronym is RIPCORD. So, I ask is it Revolutionary?
Is it Immutable? Is it Public? Is it Collaborative? Is it Open? Is it Resistant? And is it Decentralized?
Why is bitcoin special? Because it is Revolutionary, Immutable, Public, Collaborative, Open, Resistant
and Decentralized. Not because of some magic incantation but because of the properties it has.
And so is something else also special? Well, it is to the extent that fulfills
these characteristics. Not because we put the word cryptocurrency in front of it or because we slap
the word blockchain on it or because a government said it is by calling it a digital currency.
The question we should have is "Is it RIPCORD?" So, will DeFi really change the world? Well, it depends.
It depends what kind of DeFi it is and what properties it has so if you want to evaluate a DeFi system
either the platform on which it's running or the implementation itself - a collection of smart
contracts, a composed application, any form of decentralized finance - what are the questions
you ask? I think we ask the same questions. Is it revolutionary or is it just doing
the same thing we already do with the same power structure and architecture that we already have,
enriching the same people who are already rich? Is it revolutionary? Is it immutable or is there a god
mode that allows those who control it, if there is some organization or system controlling it,
to change the past easily? Is it public? Can you audit what's actually happening in the
system? Is it collaborative? Do its properties emerge from the collaboration of all of the
participants - do the participants have a say in the governance and the consensus rules and the
mechanisms of the protocol? Is it open? Can anyone participate or does it require vetting, does it
require kyc, aml, documentation, identification, credit ratings, jurisdictional controls?
Is it resistant to censorship, freezing, seizing, and other problems like that? And finally is it
decentralized from which all of the other properties arise and so I can't say will
DeFi change the world unless you ask me which DeFi. But I can say as a whole the principle of having
finance that is decentralized and that actually has RIPCORD properties will change the world.
Why? For the exact same reason that having a currency that has RIPCORD properties
will change the world. And again, who's the world here?
Not really most of my audience. See, the thing is you already have CeFi.
You have access to it. It's not as good as DeFi, but at least you have access to it.
And so, as always for me, the audience that is most affected - the end user, the main stream of this -
is not someone buying a cup of coffee from starbucks or even using DeFi to buy a yield
farming starbucks future on an equities market. It's whether the other six and a half billion can
use this to participate in access to financial instruments, in access to investments, in the
ability to raise capital as a startup founder, in the ability to escape and narrow constraints of a
single jurisdiction and access the entire world of finance on an equal footing with rules that don't
change based on circumstance or origin, with neutral response from the market and how world
changing is that? Oh, very, very world changing.
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