Crypto Utopia Cracking?

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Last week, three DeFi (decentralized finance) groups stepped in with emergency plans to protect their projects and users from economic turbulence in the face of collapsing cryptocurrency prices.
These DeFi crypto networks which had pledged to put users in control ended up taking charge themselves in order to survive the ongoing crisis in the digital asset market.
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[@PBoyle]

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[@ricardoblikman2676]

11:58 as a Software Engineer with nearly 3 decades of experience I can absolutely confirm this from an IT perspective! Those participation medal generation just barge in take a dump on everything we achieved in 30 years call us obsolete opensource everything and all the problems we tackled in 2-3 decades are coming back! They never learned stuff so everything that exist prior to them, including people who did the same study and have more experience are bad and obsolete! Programming languages (while they are part of the new ones), relational databases, security basics etc. Its a no brainer that everything gets hacked! those boys and girls find themselves so smart without any trackrecord, they dont even poses the academic basics of gather info, derive facts measure pro's and cons of several options and let the facts drive your conclusion they just want something and makeup the facts and negate everything that is not in their favor.

[@fatihgoregenn]

Turkish subscribes please to your channel videos, thanks

[@davejordan87]

Great video, but please try avoiding shady sponsors like PIA

[@PhatPazzo]

Pro tip from an IT security specialist: if what you care about is your security when traveling or on internet cafés, it’s much better to add a VPN server at home, and connect through it instead.

[@ricardoblikman2676]

@@PhatPazzo Indeed!

[@Strykenine]

Soon the crypto community will discover, the same way the traditional finance industry discovered (over and over and over) that the rails are there for a reason.

[@Imdan92]

Because the individual cant be trusted to make decisions

[@Dwightstjohn-fo8ki]

The "rails" are there for you to be "railroaded"??!!!!

[@River-zo6ve]

@@Dwightstjohn-fo8ki rails as in the kind that keep people from falling off a cliff, don't be dense 🙄

[@TrollOfReason]

To keep money flowing to the top?

[@Funktastico]

@@TrollOfReason to keep money from sam bank fried

[@painchess]

" I will not call this a ponzi scheme, just because I am not convinced yet they are smart enough to voluntarily make a ponzi scheme" I am dying !!

[@ShroudedWolf51]

I do love how despite all of the talk of being decentralized and being more fair for everyone, all of these systems are inherently incredibly centralized, far moreso than a traditional system has ever been. And exist only to benefit a small handful of people in a way far more aggressive than traditional institutions have ever been.

[@Magic_beans_]

The deeper you get into speculation - altcoins, NFTs, MOASS - the more you see that embraced by the rank and file. The conversation shifts away from democracy and equity toward a future that’s just as hierarchical and unequal, but this time _they_ get to be on top.

[@areitu]

Thank you, I thought I was taking crazy pills

[@tredegar4163]

I really liked the explanation of speed running all of our past mistakes. Tether feels like a wildcat bank and Charles Ponzi is a patron saint of these high yield crypto platforms.

[@theObscure3rd]

hahaha Charles Ponzi is the Patron Saint and Bernie Madoff is the awaited Messiah 🤣

[@yogathan1]

@@theObscure3rd They are nothing compared to Tether!

[@Cadllmn123]

any% economic collapse WR

[@angelarch5352]

Somebody needs to create an official "Ponzi coin", and "Madoff coin", just for a joke,... and then we can watch as everyone piles in and the coins become valuable. To the moon!

[@joetrapp9187]

@@angelarch5352 Apparently there is a PonziCoin. And if people can't take that hint, there is also Tulip Protocol, which proclaims itself as a "Yield aggregation platform built on Solana with auto-compounding strategies for vaults."

[@Treblaine]

The endless cycle of: "Grrr, all this red tape is slowing me down!" "Lets get rid of all this red tape and we'll all be rich!" "What! I've been conned out of vast amounts of money! How is this allowed?!?" "Finally we have put in the very reasonable protections that stop this fraud" "Grrr, all this red tape is slowing me down!"

[@jajajinks1569]

Now to see it happen all over with environmental regulations as well :)

[@lolilollolilol7773]

That's Libertarians in a nutshell.

[@Magic_beans_]

I know some folks like that. Regulation is a pain, it’s government overreach, it increases costs. Then their industry gets deregulated and _in that one instance_ they care about consumer protection and ensuring a quality product.

[@ForwardGuidance]

"hard coded" contract until there's trouble then it becomes "soft code" contract which is altered to protect those that took the most risk while killing those that were financially conservative.

[@stephenchurch1784]

I think the decentralized mythos is truly shattered now. It's a bit hard to claim decentralization when one project collapsing brings down two to three exchanges, five other projects and an army of influencers

[@Treblaine]

In a way it is decentralised but wrongly assumes centralisation is the cause of instability. It's really not profound that in a system of each element having equal ability to affect any other and be affected by any other it's hugely prone to a cascade of chain reactions spreading through the system unzipping everything.

[@stephenchurch1784]

@@Treblaine if you dig into the cascading failures in the crypto space though, you find that the reasons tend to come down to shared liquidity pools, projects relying on other projects to maintain a peg to the dollar, undisclosed stakes in projects by exchanges selling those projects, etc... The decentralized nature of crypto was supposed to be about not having the control of money in the hands of a few rich investors and that is turning out to be a complete lie

[@shekel2356]

You're misunderstanding what the label "Decentralised" is defining. It does not mean "isolated". It means it's governance is not centralised

[@stephenchurch1784]

@@shekel2356 how is its governance not centralized? Proof of work tokens like bitcoin are governed by the miners and the cost of mining means that it's controlled by a small group. In bitcoin's case, half the mining is done by three mining companies and in ethereum's case 63% of mining is done by two. Private pools only account for around 5% of mining. Proof of stake tokens grant governance to whoever has the most money in the project just like traditional investments and, just like traditional investments, that centralizes power in the hands of the wealthy.

[@lolilollolilol7773]

@@shekel2356 The governance is not centralized on paper. In practice, not only it is very much centralized, it is even MUCH more centralized than old finance.

[@kid4ever697]

I really love to watch the plain bagel's favourite finance youtuber.

[@j3i2i2yl7]

Confession: I looked at the title and sighed because it sounded tedious, but it's Patrick Boyle so I watched. Wow. Lesson lesrned. Great explanation as always.

[@nowMUSH]

It's better to know

[@philmckay9973]

Patrick is the Adele of business YT. Lol U know he photoshopped out his drink in hand, flowing blonde hair he has to push out of his eyes, and a cigarette hanging from his mouth

[@fxcg2]

I dont remember the first title, but I finally clicked on the video when the title was: Crypto Utopia Cracking?

[@violarulez]

as an early adopter of bitcoin.. the idea of a decentralised financial system is great. but, nobody can disagree that 90% of crypto-advocates (conservative estimate) are putting all their energy into getting rich without contributing to society. There is absolutely no way a financial utopia will result from the actions of these people. For all of civilisation, much of human creativity and ingenuity has been spent taking advantage of and extracting value from regular honest people. I am shocked that anybody believes that human designed software will somehow remove that element. more of the same, in a new package.

[@AicyDC]

Yep. DeFI projects which suggest they will make you rich are an obvious no go and a red flag for a ponzi scheme. If it was truly de-centralised and for the people then it wouldn't be making any particular person or group rich.

[@perihelion7798]

People getting rich are not thinking of the greater good. They are thinking of themselves. When they get super rich, they loudly give back a small pittance to the workers that made them rich, and the press proclaims them as heroes. And so it continues...

[@habajaba9603]

IKR. These so called advocates buy into shitcoins for the moon phase. Get rich quick. Lol.

[@stachowi]

Bingo… they’re racing to centralize the next frontier.

[@perihelion7798]

@@Aaron565 Give examples if you disagree. Just saying he's wrong means nothing.

[@stephans1990]

Could hummus be an alternative investment to crypto? There are so many different flavours and if the price goes down, you can just eat it!

[@rosshoyt2030]

I'd invest immediately

[@saintcaprinus5658]

I have a feeling hummus will be big!

[@kucingmiumiu854]

Just called it blockchain-backed hummus.

[@mgouat]

That would need a cold chain. Is it cool enough?

[@samsonsoturian6013]

Wheat, honey, and molasses keep in the cupboard better.

[@daveclarke1990]

as a software developer i find the idea of "code as law" to be completely horrifying. Makes technology seem perfect and impartial when its made by fallible humans with biases and incentives. "Code is sometimes law" is at least more honest.

[@RustOnWheels]

That is why in the real world law is ever evolving because there will always be people seeking and abusing the edge cases. Like hackers, but in real life. And hackers are totally not a thing in software. All software is totally unhackable. /s

[@buckerooni]

yep, it's the most arrogant overstep ever. dodgy code and a crazy violatile ecosystem that is impossible to predict i.e. orgs losing keys, hacks, etc.

[@buckerooni]

@Jacques Raddit totally have worked with cards and other payment systems. Even with specs and test data, live data can be different and cause unexpected behaviour. Crypto on autopilot written by snotty nosed virgins is terrifying!

[@NelemNaru]

Wait until AI is writing all our laws

[@tanishshrivastava2442]

Wait until they start to throw barely trained interns. Just imagine how the code might look like then. I mean the law. The hell is this world coming to?

[@TrainwreckAt]

I'm so happy people are starting to talk about these things with a critical eye. Thanks Patrick! And don't forget. Not your code; Not your coins. As it has always been.

[@mikeh2520]

A real good point!

[@ShapeyFiend]

@@loupasternak well defi has mostly been a phenomenon of the last cycle. Even if you look at all crypto as a scam the scams of a few years ago are very different than the ones going on now.

[@AD-yo1pg]

@El Dimos Karam Actually this is the whole cryptospeheres biggest scam, selling the public on the idea that it's a revolutionary technology that we just don't know what to do yet, but when we do, it sure will be revolutionary. It's not useful. It's been here for 12 years, and we still haven't found a viable working use-case.

[@AD-yo1pg]

@El Dimos Karam It is useful for things that can be done better without it

[@Ana_Ng]

@El Dimos Karam blockchain is a _really_ cool way to solve the byzantine generals problem. it's not a good financial model.

[@boringmanager9559]

Patrick is my favourite finance professional to listen to. Always realistic and on point

[@rajeshupadhyay5683]

Well said! I am also here to learn how to invest after listening to a lady on tv talk about the importance of investing and how she made 7 figure in 3 month, somehow the video taught me nothing and left me even more confused, I'm a newbie and I'm open to ideas on how to invest for retirement

[@lezliewhicker8450]

@@rajeshupadhyay5683 lookup Priscilla Dearmin-Turner, this is her name online, she's now the real investment prodigy since the crash and have help me recovered my loses

[@petermusa5396]

Despite the economic crisis and the rate of unemployment now is the best time to invest

[@davidhudson3001]

Investment now will be wise but the truth is investing on your own will be a high risk. I think it will be best to get a professional👌

[@dr.ervingalen1777]

@@lezliewhicker8450Thank you, Going through her profile in her webpage, she smashed all her state certificate and accreditation🙏

[@MikesGlitch]

8:30 That "Beacuse Crypto" long pause was excellent 🤣🤣👍

[@jaanuskiipli4647]

Haha, like "because of electrolytes" in film Idiocracy

[@brunosouza4758]

I love all the passive aggressive comments: “I’ll give them the benefit of the doubt. Maybe they’re not Ponzi schemers, maybe they’re just not smart.”

[@nellurr]

Amazing content and the way you tell the details is funny and very informative. Thank you for your help. More people need to watch this content.

[@dindu551]

Bro. On bancor, you nailed it. Plus, the DAO was controlled by two people if they acted in concert, and they always did so. The big insight you had though was that 'there are good reasons for doing things the way they are, but people have forgotten what they were.' Court cases likely do a good job of enshrining many of those reasons, with legislative and rulemaking histories filling in a bunch more. Hard to wade through all of that but you are over the target on that statement. One thing I learned from defi where I have spent a lot of time is that engineers have very little imagination. Everything is a mousetrap to them and they have little ability to account for human factors. Defi is going nowhere until proper salesmen get in there to develop something that the public can reasonably be expected to use. Let's just hope that isn't Faceberg.

[@gg_rider]

People won't "use" (spend) money that is rapidly rising in value, unless they must. Spending on consumption equals divesting in growth to obtain consumables. Sellers in commerce don't want to accept money that is rapidly falling in value. People earning wages don't want those paid in the form of money that is rapidly collapsing in value, or might soon collapse. Lysander Spooner explained that 200 years ago wrt govt issued gold coins with a face value. People who could afford to would hoard gold, plan to melt it down and sell it, and the meantime conduct commerce with whatever else was available, paper contracts. The act of minting those coins and acquiring the gold to do that fixed an almost certain increase in the market value of the commodity above the face value of the coin, a kind of government subsidy to metal speculators. The side effect was making money scarce, and creating pressure on the government to mint more. The government also did or tried to make it illegal to melt down gold coins to extract the increased value. This is where Spooner, as a libertarian, had a problem. People could go to prison for doing transactions that the government itself incentivized by placing a fixed face value on 1 oz of gold. Spooner argued that the most useful form of money for commerce had no intrinsic commodity value, and only a nominal face value. At the time, that was paper money, but electronic account entries at the bank have even less intrinsic value than paper. Paper money could be shredded and sold for home insulation or birdcage filler. The government Fiat money that we have right now, this has no fixed value that is be set by fiat instructions or declarations by a politician. Instead it has a floating international value set by the market every second, and somewhat stabilized by the actions of the Central Bank conducting international forex swaps, to counterbalance shifts due to exports and imports, which are beyond my full understanding.

[@enilenis]

In Bruges insert was brilliant, all the way to the end.

[@_Annomander]

The only man making sense of the Crypto / NFT madness.

[@dollarcostbackpacker1226]

Nfts are the future.... but its not these pictures. That is a "testnet" for a lack of better words.

[@kylezo]

There are tons of other people lmao what do you mean. Coffeezilla, Matt Binder, münecat...

[@Ballpython50001]

@@dollarcostbackpacker1226 Can you please explain a use for NFT's ? Because the only one I can think of is that NFT's will be used as a "product verification code" which may sound nice until you realize that most companies are moving to a SAAS (software as a service) business model. If they could issue NFT's to people it would make it easier to keep their products on their own website and make you use the NFT to access them rather than you buying it. NFT's would mean the end of any digital ownership.

[@shawnjavery]

I mean he's been pretty wishy washy on his stance. There are people who called out the bullshit from the start, people who didn't buy into it but didn't have a negative crypto position because it would have been inconvenient for them, people who were heavily invested so they adopted a procrypto position, and the true believers. There are very few true believers. I mostly have respect for people in the first group, while the second doesn't have my content, really its only the third group I hate.

[@ThePapaja1996]

Plain beagle

[@stnbch3025]

Decentralization doesn't exist in systems where somebody writes and/or is maintaining the operating software of the system. These people are governing what the software does. Just look at your own pc and the automatic software updates. Your personal computer is not decentralized.

[@imonabudget4427]

It does if the software is open source and community maintained. If your personal computer runs Linux or BSD, it is in fact decentralized. Anyone can obtain the software from numerous sources, alter it and run it. Windows and Mac OS on the other hand require the centralized infrastructure and organisation of their respective companies to keep fuctioning properly.

[@jhms2006]

As always, insightful and interesting. I've participated in several decentralized projects as an "early investor", and their goals are usually quite lofty. Creating an entirely new kind of bank, it turns out, involves a LOT of work of every kind -- engineering, programming, as well as financial planning, and auditing work. These projects really need a herculean commitment of a LOT of people who ALL want to pitch in and make something new, but they tend to use language that projects future value. Because of this, a task that needs dedicated people with vision and commitment, ends up being composed entirely of moonboys. A disaster waiting to happen.

[@sweepingtime]

You're talking about an entire financial system that was built by some software engineer under a pseudonym and then who took off like someone's father going out to get a pack of cigarettes. There is no vision because fundamentally, no one wants to take the responsibility to instill at least a system of ethics to guide subsequent generations of financial managers and programmers.

[@Thomaskrallown]

👆Thanks for commenting.,. got something for you,,.

[@Default78334]

@@sweepingtime also because a lack thereof is kinda the entire point of doing something in crypto in the first place.

[@WhoNoMe]

Next in crypto: Solana, Ethereum, Bitcoin, Cardano, Ripple all agree that having many tokens is inefficient and prone to volatility in markets. They team up to create a single token and convert their existing token to this single new token. They will call this token the FRT. Federal Reserve Token.

[@zac491]

The weakest links are the governance systems which are all quite different, one of the crucial things missing are dispute resolution protocols and other utilities like sybil resistance identity solutions that defend decentralized systems from bad actors. Protocols need community driven constitutions/guidelines that can be enshrined and upheld by oracle solutions to prevent corruption. Lastly you should ask yourself that if you plan on using decentralized systems and want to take your finances into your own hands and out of the hands of professionals/banks etc wouldn't you see the importance of learning to read code and understand code?

[@Paul-Jan]

Congratulations on your new sponsor, Patrick! It is great to see you moving forward. All the best.

[@roegoleg]

When the only incentive of defi is to earn “money” through the use of their own coin, it’s no different than acting as the intermediary of traditional banking. They just want to get paid. They could care less about a more fair financial system, free of manipulation.

[@Thomaskrallown]

👆Thanks for commenting.., got something for you.,..,

[@leocracker9450]

The topic is really well chosen, thanks for your hard job, Patrick!

[@etenat8772]

patrick's videos are always such a treat

[@TheInsida1]

Love the balanced, intelligent analysis. And the dry humour too!

[@Kevin_Street]

It's almost like a mathematical equation: removing the middle men from a financial system increases the relative power of the remaining participants. The ones who already had power (like say, the people controlling the code of a defi system) become even more influential than before. Middle men slow down finance and make it more expensive. But at the same time they add in layers of reciprocity that make it less possible for any one individual (or small group of individuals) to completely control the system.

[@Kevin_Street]

@@Aaron565 This is a case where you're arguing against something I didn't say. If finance is "centralized" then there are by definition fewer middle men, since all transactions can only pass through one or two.

[@damonaho7499]

Your videos are so good every time!

[@riccardod.888]

Dear Patrick, as always, an extreme informative video, with even some recent examples of what’s happening in the DeFI world, I’m very grateful for it, thank you. I believe that the willingness at all cost of some, to exploit blockchains for speculations and wealth gains, can pose a real threat in the technology existence itself. As the story progress, many and many witness every day how in unfair way the technology is used, it is possibile that, at this pace, no one will really employ it for some other sophisticate use-case than finace and speculation. I hope to be wrong. I would really like to hear your thoughts about the recent default on russians bond and the ruble growth despite the war, it would be amazing.

[@PBoyle]

Thanks to our growing list of Patreon Sponsors and Channel Members for supporting the channel. www.patreon.com/PatrickBoyleOnFinance : Marc De Mesel, Nate Stapleton,Timothy Baird, WIlam, Hernan Merino, Random Encounter, Nieuwsbrief Ikwil, Bee Positive Consulting, hyunjung Kim, John Cadena, Ian Tracey, Callum McLean, Oscar, Simon Pena, Ed, Pavle Obradovic, Erik Van Ekelenburg, David O'Connor, Pjotr Bekkering, Alex, Robert W Proudfoot, pooh shmoo, Robert Muller, Andre Michel, Ivan Iliev, Gopaljee Atulya, Milan Tomic, Mark Hooker, Artem Vasenin, P H, Sebastian, Michal Lacko, Peter Bočan, Michael Pierce, V Jordan, Gil, HalfwitHam, Mark Brophy, Patrick T, David Urdenata, Juan Valdez, Bruce Roberts, Chad Norman, Bruce Roberts, Shamikh Rana, Friday Guy, Marc De Mesel, Augusto Ramos, Soy Boomer Doomer, Bob Slartabartfast, Robert Feiler, Camil Dbouk, Erik Montesinos, Matthew Loos, Az Indragiri, Aman Bali, Lautaro Parada, Pratap, Deborah Joseph, Robin Sung, Kurt Johnston, Dominik Auerbach, Gurmeet Kaushal, John Hall, Dara Mo, Josef Goergen, Wilbert Cheng, Daniel Talero, Jaroslav Tupý, Trevor Lucey JB Weld, Alex, Carlos Figuera, Peter Pomelov, Null065, Rick Thor, MeBerzerk, Henry Nguyen, Sola F, The Collier, Carlos Mejia, J Wadia, Bitcoin OG, easy boekhouding, Albert, Eugene Jung, Daniel Cervini, Jonathon Yong, Iris Ji, Emil Nicolaie Perhinschi, Charles, Eli Auto, Excks, Michael Li, Par Hedman, Praveen Mishra, Gerard Scott, joel köykkä, Areeb Ahmed, David Wang, Yazan Qaraqish, Rodolfo Cornetti, Daniel Winroth, johnny, Nick Jerrat, Chris Houston, Alastair Currie, Robert Griffin, Andrei, zizi Golo, Fab Vida, Constantin Petrenco, pawel irisik, NotAScam, James Halliday, 22 Dust, Carsten Baukrowitz, Heinrich, Arron T, Ben Brown, Stephen Mortimer (to The Moon), Ryan B. Hicks, Liam, Logan Vrankovic, William Heaton, Paul McCourt, Daniel, Aaryan Koura, Steven, Christopher Boersma, Ulf Lundblad, Dorothy Watson, Greg Blake, Simon Bone, Livermores Quant, The Collier Report, Scott Gardner, The Man Koala, Brian McCullough, Daniel S. Smith, Finance Student, Julie, Mohammad Rehman, James Wallace, Daniel Poellmann, Edosa Odigie, Dixon Yuen, Marek Novák, Stamatis Drepaniotis Michael Smith, Ahmed Hamadto, Chris Davey, Mike Farmwald, Michael A. Mayo, Lachezar Georgiev, Kamet Batra, Bradley Johnson, Sagar Gudi, Michael Chessar, Kate ATL, Tong Cheung, Lady Dje, James Barnes, Chris Hall, Kurt Johnston, ICBM Catcher Juan Valdes, KernelSC, Linn Engström, Veltsh, Konrad P-kala, Pastacat, Adam Vorting, Matthew McQuade, Christopher Lesner, freebird, Kenneth WedMore Lund, erfective, Jason Young, Jonathan Kopnick, Peter Hendrickson, steel, Bastien, Tom Willett, Chris Whitehead, Anil Jason, JOJO, AS7, Greg Thatcher, Ezekiel Templin, MrLuigi1138 Grecia Bate, Leszek Frankowski, Nam Nguyen, Goutham, Karim THIBAULT, C, David R. Ingemi, Robert Wave, Dmitri Alexeev, Aaron Rose, Ethan Hernandez, Brett Turley, Claude Chevroulet, Adrian, Stephan Marosvary, Yigit Yargili Louis Julien, Jan Lukas Kiermeyer, Gearoid O Connor, Fredrick Saupe, Subliminal Transformation, Jason Horton, Alex McMahon, Adi, Ben, Kurt Mueller, Joaquin Madruga, Janusz Wieczorek, Federico Viscomi, Corgi, Mahdi, Burgerinn, Quinn Cone, Sam Doyle, QiKaiQian, Stephen, Joshua Rosenthal, Frank Yashar, Michael Smith, Emilian Marius Tudor, Julian Aßmann, Cormac, Ian Shearer, Theodosius the Elder, Michael Kopřiva, Tinni, Goran Milivojevic, chris, Joe Del Vicario, Alexandre Mah, ultima9, Norman A. Letterman, maRiano polidoRi, Stephan Prinz, Gary Yrag, Mattia Midali, Matthew Berry, Ann Williams, Jay T, Gabor, Florian Haas, Shivendra Saklani, Zachary Tu, Jeffrey, Lane Alan Deyoe, Chett Flynn Jonathan Horn, Mo Herbert, Lane Andrews, Justin Thuet, Olaf Thiele, Ivan Ilaev, Todd Gross, Andrea Russo, Douglas Caldwell, Devere, Wade Hobbs, Volodymyr Palii, James Hoctor, Gavotti SGP, Ryne Davis, Jean-Philippe Lemoussu, Keanu Thierolf, Grizzly Grey Bear, Muhammad, Michael Chow, Stefan Alexander, James Blandford, Miroslav Ognyanov, Scott Guthery, Vanya Davidenko, Oswaldo Caraballo Fermin, Arto Karhu, James Bache, Jason Harner, Dale Patch, Stefan Penner, Mischa Trunz, Arvid, Eric, Jonathan Metter, Niandis, Junhong Low, John Way, Maria Baker, Luke Solomon, Sharath Vulupala, Keith Elkin, Chris Nicholls, Pavlos Skevofylax, Luis Carmona, Vinci Chan, Olivier, Thomas Chan, Yasha, James Yoh, Eduardo Martinez, Adi Blue, W Fla, Swain Gant, georgejr, Stefan, hyeora, Brian, old gambling art bag, Boussaken, Lukas Braszus, Vik, Chris Albertson, Rob Gundermann, Ming Chak Wong, Sprite_tm, Keith, Anurag Kumar, matt f, Douglas Caldwell, Ryan Stewart-Gardnier, Adgn, Ronald London, Chris Rock, Tuan Nguyen Minh, Daniel Baak, Ida Sanchez, Jeremy King, Maria, gjergjik, Ken, Dougald Middleton, Tom, MrChaos42 Diarmuid Kelly, Subodh Kafle, Octavian Becleanu and Yoshinao Kumagai

[@barny1174]

👍👍👍

[@tmyersf4]

Only a matter of time before Tether and Binance collapse. BTC to 6k.

[@user-vs9lu7zl2e]

Thanks for the critical eye and the objective view.

[@TimvanHelsdingen]

About the bitcoin mining centralization part: Mining is not what decentralizes bitcoin, it’s the fullnodes that do that. During the blocksize wars in 2018 close to 80% of hashpower was from the big block crowd, but yet small blocks came out on top as they had the most support from fullnodes.

[@agent-8699]

Yes, it was disappointing to see Patrick conflate the centralization proof of stake validators with bitcoin mining pools. Apples & oranges.

[@chancerobinson5112]

Let’s all sing the song: “Won’t get fooled again!”

[@jeffreylevin9728]

Thanks. Made my morning. Because crypto....You need to start a new chnnel with this as the channel name. Priceless

[@k98killer]

Miners are not loyal to mining pols. This has been demonstrated many times. There is no significant centralization danger from mining pools.

[@IanMcD204]

(Kanye voice)- "Graham, I'm gonna let you finish, but Patrick Boyle is the best finance KZbinr of ALL TIME."

[@gabecodina]

How about a glossary for terms like "regulatory arbitrage"?

[@ifh4030]

In that case it means people go to the jurisdiction where regulations are most favorable to what they are doing/want to do.

[@ZanathKariashi]

it just means that there's a mismatch in laws that allow one to profit the difference until the loop-hole is closed or too much competition drives the profits down to nothing. 3AC made most of their initial money that way when struggling to find an edge to break into the big-leagues, as they were a first mover in the space, but eventually there was too much competition and/or the holes being closed. A kind of Currency arbitrage would be buying games for effectively 99% off on Steam via exploiting regional currency pricing/regional currency values and then flipping the keys (which are only sometimes region locked), on a 3rd party site for 40-60% off normal price, and pocketing the profit in re-sell price in the currency you can get the most value out of. I.e. buying a 60 dollar game for 2 bucks, and selling the key for it for 20-30-ish.

[@williamchamberlain2263]

Love your content - really enjoy the infrequent clips to emphasise points

[@KwissBeats]

100% on the mark again, as always. For me, the thing with most Defi-protocols is that most parts (if not all) of the defi projects goes undocumented. The same goes for stablecoins, If you can't explain how you plan to stay pegged, how can I assert where the risk is? oh and lol please don't tell me it's backed by other crypto😆

[@yogathan1]

Know your customer is irrelevant because we are all friends on the Internet.

[@iratedu6]

This shows how much you know about the space. The whitepaper breaks down the mechanisms and functions of blockchains. Then all the code is open source so anyone can view the code to check for poor logic. Most crypto projects audit their code and also have bounty hunter rewards for finding poor code. True defi gives 100% transparency with on chain analytics

[@yogathan1]

@@iratedu6 I get it now because everything is open source and transparent no audits are required. I apologize for thinking Tether is a fraud.

[@ThePapaja1996]

@@iratedu6 Do they have some kind of rapport per quater.

[@ThePapaja1996]

@@Aaron565 Do America realy fail so mutch that all Words countrys backed by the dollar crash.

[@Thuxo]

Yep you always have the highest quality videos

[@robertplatt643]

I don't notice any red tape or regulations in my banking. Showed my driver's license when I opened an account. That's about it. The regulations are on the banks, not the customers.

[@psychickumquat]

How could people possibly think crypto would end up any different than regular finance as it became more mainstream? Those with the resources to control it will do so and it becomes centralized. That's just how it tends towards with these things, crypto acts no different...

[@hamidijavad]

Thanks! Great insights!

[@PBoyle]

Glad you enjoyed it!

[@zachzimmermann5209]

Patrick, great content as always, but I think a bit of acoustic padding (bookshelves, furniture, etc) in your recording spaces would do a lot of good for your audio quality. Cheers!

[@perihelion7798]

He seems to be recording in a remote location, using his phone. Maybe.

[@virgil_kane]

Patrick , I really like your channel .

[@kennethbaird968]

For a long time I was confused by crypto and how it became valuable. It was explained to me. crypto companies take your crypto from you and pay 10% interest with the invested crypto they buy other crypto and pocket the capital gains. This happens to be the function of crypto other than ransomware attacking. now that I know I'm confused is it a Ponzi scheme or a pyramid scheme ?

[@stephenchurch1784]

The big difference between a pyramid and ponzi scheme is that investors in pyramid schemes are given the opportunity to earn more by recruiting people. There's plenty of both in the crypto world

[@saltymonke3682]

both

[@slovokia]

Defi is like a badly run bank with no capital buffer in case anything goes wrong and no deposit insurance. But the interest rates are good untill you lose your money.

[@samsonsoturian6013]

Patrick did make a video comparing them to the old west wildcat banks...

[@dairallan]

"the interest rates are good untill you lose your money" Or as Boomers might say, a ponzi scheme.

[@kineahora8736]

I think this is a valid concern about all product other than Bitcoin. Isn’t Bitcoin the outlier here with really no centralization and no “interest rates”?

[@dairallan]

@@kineahora8736 There is a use case for a (nominally) untraceable electronic currency for unlawful transactions to provide digital functionality that cold hard cash serves in the real grey and black economies. Lets ignore morality. The use case exists. And as Bitcoin was first to market, and is widely adopted for such it has an intrinsic value. Ethereum managed to partially niche itself into a "competitor" role. After that there is literally no use case for further tokens. Thats it. The use case is met, its over. Hence nothing but ponzi schemes exist in the market.

[@kineahora8736]

@@dairallan I think Lyn Alden also points out a use case for Bitcoin and for fiat-dollar-backed stable-coins for people in developing countries with habitually high inflation for wealth storage, where holding gold or dollars might be confiscated by the country’s central authorities, and also in these countries for doing easy transactions abroad. But the less-decentralized alt-coins (everything other than Bitcoin) have no role…

[@git_r_done_776]

When a bunch of young kids learn to code, have no education in economics, and think they can make quick fortune...

[@greenl7661]

Young kids? Average age in crypto is around 40.

[@git_r_done_776]

@@greenl7661 I was thinking of Do Kwon of Terraform Labs. He may be in his 30s but he is as immature as a kid.

[@WelfareChrist]

I’m feeling pretty good about ignoring all of the sage advice my crypto friends have been doling out nonstop.

[@DD-ld1xq]

uhuh lol

[@buriedpet]

This is the best finance content that you can find. Thank you Patrick.

[@ipodtouch470]

Simple answer is if it has governance then no. If one person still owns the contract then it isn’t trust less since you must trust this individual to act maliciously.

[@anthonyanth8368]

Love from Zimbabwe

[@gusclash4562]

Crypto reminds me of the split cap investment trusts in 2000; they all owned each other and propped up each other’s valuations….until they didn’t.

[@abrvalg321]

8:38 it's like government bailouts after 2008.

[@ManuraNanayakkara]

Mining pools cannot control network. Mining pools are several thousand small miners mining bitcoin collectively and if they misbehave individual miners can redirect their hash power to another service. Also most wallets that appear having large number of bitcoins are infact exchange wallets with amny users funds. These aspects of FUD is being delt frequently before this. I think it's better to have these concerns of bitcoin discussed with a guest such as Andreas Antonopolis.

[@nonyabisness6306]

A Ponzi scheme isn't a ponzi scheme because of intent, it's one because of how it operates. Like Pyramid/MLM.

[@AD-yo1pg]

and DeFi

[@TheSteinbitt]

No shit, the point here was that they were too stupid to realize what they had done.

[@DerperDaDerpa]

Way to kick ass on that turkish channel mang you're a BOSS

[@CallsignEskimo-l3o]

Patrick's presentation style is reminiscent of Wesley in The Princess Bride explaining the meaning of 'to the pain'. Both are largely immobile and have an articulate and dry delivery.

[@TooLateForIeago]

I'm not sure why existing regulations for the exchange of currency or equities should not or could not already apply to defi. These "coins" behave like tradable equities and are speculated on as if I were to, say, buy $1,000USD worth of Japanese Yen in the hopes that the value of yen might grow faster than that of USD.

[@dairallan]

Because the entire model of "disruptive" technology is to bypass or flagrantly break existing laws and regulation. You continue breaking the law until either the law gets changed or the business fails either through the law starting to be applied properly or internal incoherence in the business model bringing the whole thing down despite its "disruptive" advantage (of course, even then, the hope is you have cashed out with an IPO or sale before then). Crypto just makes this all easier by removing the need to find a buyer, hence all the rug pulls.

[@JanBruunAndersen]

Existing regulations? Regulations that are enforced in which jurisdiction? You are commenting on video that is sponsored by a VPN provider whose sole business is to mask which jurisdiction you are physically located in. You want to regulate VPN's too?

[@dairallan]

@@JanBruunAndersen I was talking in generic terms about "disruptive" technology. But if you specifically want an example applicable to these scams, how about Basel 3.

[@AicyDC]

@@JanBruunAndersen This is not VPN's sole purpose. VPNs have many uses, and people often will use it within the same country that they are located. I use a VPN provided my company to connect to my office network, for example.

[@PapaCharlie9]

Because all those retro-asset classes are built up on literally centuries of trust and, in the case of government vs. government, treaties with enforcement (more or less). And even without formal enforcement, globalization has made so many national economies interdependent that it's basically in everyone's best interest to keep the current system running smoothly and liquid (RU vs UA notwithstanding). This is why Mr. Boyle pointed out that Defi is speedrunning those centuries of lesson learning and trust building, but they've still got a long way to go before I'd put any trust in a DOGEBTC futures contract. I'd say Defi is right up to about 1720 and the South Seas Bubble.

[@brunosmith6925]

Just love how you manage to turn a complex and largely academic subject into a presentation that even a simple-minded donkey like me can make sense of.

[@frmcf]

In a sense, code is always law, but its jurisdiction is limited. In the case of the DAO hack, for example, Ethereum's code kept running exactly as intended, but it can't stop anyone from forking it, making a new code base and doing something different with it. Human beings effectively copied and pasted the code, and made some changes to create new law. And it was human beings, also, who decided to give more value to the new version.

[@stefanstenroos6344]

Smart Contracts alone won't be able to replace traditional finance, lending, etc. There will still need to be some sort of arbiter that reviews loans and contracts to ensure things work properly. Algorithm driven and heuristic AI models will probably fill this gap. At that point, what matters is who writes the AI. Right now, the only people really benefiting from DeFi are those behind the protocols.

[@PersonNonRegatta]

So if I understand Bancor's strategy correctly, its the equivalent of printing more dollars to combat the loss of the dollars' buying power? How could that fail?

[@Yor_gamma_ix_bae]

Recentralized is what they mean

[@0xCAFEF00D]

3:00 I'm very surprised there's not tools to prevent this almost completely already. For any decently sized deal there's likely to be some form of digital trail to read. Throw that into a simple program that reads out the numbers. Then if you input an amount not contained in the set of numbers seen it gives a second warning. For greater accuracy you could try to classify each number. Even for trivially small transactions it could work. Say you're ordering coffee and you have a browser extension that does just this. It could even filter the html for numbers that aren't prominent at all to help counter sites that try to defeat this system. It doesn't have to be perfect at all. It just needs to catch some amount of errors. Of course maybe something like that makes people lazy. It's very hard to defeat humans laziness. But the possibility of creating tools like this is endless with bitcoin. There's very little friction to taking actions in the system (except transfer fees and time) and a lot of data to work with to create convenient secure systems.

[@dyllanmccreary688]

great video. you’re getting better at this crypto stuff

[@angusmcfarlane1225]

Patrick's humour cheers me up no end. And I learn so much about the wacky world of craptocurrencies!

[@thycaltrist]

I admire the ellegance in saying 'crypto people' instead of CRYPTO BROS

[@squidwords]

"crypto has been speedrunning all of financial history." This would have less impact with someone else's delivery.

[@Wildboy789789]

It remains to be seen if crypto can replace fiat, the costs tied to etherium are awful... however, a digital manmade gold, is what im betting on, bitcoin litecoin polygon, these coins have a capped amount, meaning they are actually more rare than gold or oil, u can fly to pluto but youll never find more crypto... these gold substitutes also have a use case, much like gold has a base value for electrical components and jewelry, crypto coins are tied to organizations that run them, updateing or making deals... polygon for instance isnt just gold, they just signed a deal to use the coin for disneys nft or collectable art division

[@chrisadams27]

'because crypto" -- Patrick

[@hjsong99]

Patrick Boyle is not only a great source of finance information, he may be one of the funniest people on KZbin. I think I've laughed out loud at his videos more than any other in general...

[@goobypls6450]

Minor correction: at 05:18 - Solend governance had elected to take control of the vault containing the depositors margined position, rather than the wallet itself. Small detail but super important! Great video, Patrick!

[@mineralt]

Patrick is the best

[@gordonramsthis]

Bitcoin breaks $30k!!! And I'm extremely happy with my position. My investment’s being paying more than my paycheck. It's kinda relaxing actually!

[@mauriciogiovanni3659]

If Bitcoin were to make it back to previous ATH this quickly, before the next halving, it's going much higher. Most likely $150k+. But keep in mind that no one, myself included, know shit about fuck. Nor do I know fuck about shit. But I'd say it's best to begin accumulating.

[@VanillaCherryBread]

Right! Also it was 16k at the start of the year, so a 12k run up in 4 months isn't that bad.

[@gordonramsthis]

+75% in 4 months isn't just "not bad" it's phenomenal tbh, almost unheard of for such a large market cap asset to have such an increase outside of crypto market. I've earned over $80k+ pure profits these past months. Truly Rewarding!

[@StanHopson]

@@gordonramsthis ​Awesome! I dealt with crypto last year on Robinhood, tried some index but didn't take it out so I lost it by the end. Currently, I'm willing to DCA 'bout 20k into btc but I am engulfed by the thought of losing. I'm asking - how do you go about your investments? Any consistent strategies?

[@gordonramsthis]

Indeed. The crypto markets has an intricate nature, but when done the right way ... returns can be really impressive! Thus far, I follow the signals and system of Kevin S. Mikan; an experienced industry trader. His in-depth investment research and market analysis have been invaluable in identifying profitable opportunities for my portfolio and his ability to simplify complex concepts is truly remarkable.

[@dc-ic5lj]

Good messaging. I’m in Crypto and they are all real and valid concerns. I would suggest looking into treasuries around the world implementing cbdc: Australia, uk, us and Europe. It’s on their websites. Defi in its present form is clucky and needs work. Trust in MetaMask is like putting a wad of 50’s on your hand and asking a shop how ever many they’d like to take. Some tokens do have a limited supply and these are the ones i prefer. Ada, btc and soon eth will have a limited supply but at the moment it doesn’t. Look at iso20022 xrp, xlm, algorand, hbar being used for bank settlements. Crypto has uses for international payments. Thanks Patrick. 🙏Awesome video once again.

[@manishm9478]

Patrick is so much more animated when talking about his sponsor's product than the main video topic 😂

[@pncrmpz1851]

The mic quality is also better

[@basil127]

you gotta put more effort on which give more money..

[@oandr]

this thumbnail cracks me up for some reason

[@Thesilverrat]

Thanks Patrick, I really enjoyed the presentation.

[@7Hellzz]

8:28 "Because crypto"

[@SenpaiCedxee]

I remember the ronin chain was hack when they manage to access majority of the validator node. Means if there is a country or organisation that has enough resources they can overrule the majority of the validator node for financial gain

[@iamlove7096]

Thanks

[@roberthumphreys7977]

I think what you are saying is, DEFI looks like an applied research project rather than an established, proven commercial application. OK, then things will be learned that may be applicable in the real world. Fine. But, isn't any financial system that involves human beings somewhere along the line subject to all of the good and bad that makes us human? Did anyone really believe that control of Bitcoin wouldn't become concentrated in a few hands? From my vantage point, the entire crypto game looks like just another financial system involving human beings. I know, I know, it's early days and crypto Utopia is on the horizon. Or is it just a financial Chevreul illusion?

[@addressingstars]

Good succinct video that laid out what DeFi is without injecting too much subjective opinion. The participation trophy joke fell really flat though.

[@AfricanCryptoWarlord]

Best humour in the business

[@youtubesucks8024]

Peter Lynch has entered the chat

[@dougritchie9548]

Just FYI there is a recent "news" report on a major outlet in which they reference Celsius Holdings. They then proceeded to show a chart and it formation for ticker CELH which yes is Celsius Holdings but CELH is the Celsius that makes soft drinks and beverages. Reporters, experts, Crypto CEOs have no idea what's going on right now.

[@Nemesishk]

haha, I lost it at: "Which caused a backlash on twitter, the worst kind of backlash"

[@SusieAspen]

You are so funny...love your videos and look forward to each one. Thanks for sharing your knowledge.

[@piprod01]

"Is DeFi Really Decentralized?" Not really.

[@Jechto1999]

I mean it depends on the DeFi platform, since there aren't any standards for what defines DeFi. You can find platforms that adhere to true decentralised control through voting and others that dont

[@nicksmit8969]

Patrick in BOSS mode. Thank you Prof!

[@channelofpublication]

I’ve been reading Paul Zeihans books, and particularly the areas on currency and the global history of what is our current fiat currency model have been interesting as an introduction. The fact that people are pegging a cryptocurrency to the value of USA fiat and calling it “stable” is uh……..stupendous.

[@ThePickledOnions]

good talking

[@TomNook.]

As a software developer, code is never the law. The law is the law. The problem is that crypto bros (who don't even have basic InfoSec principles) discovering code can be a definite, reproducible asset for the first time, and then getting all excited and assuming it can apply to everything in life. "Everything as code" is a principle in IT that works very well - consistency, portability, auditing, reproductibility, version control are all far easier with it. But it's not the law.

[@JanBruunAndersen]

I think you misunderstand what is meant by "code is the law". The problem with the law as we know it, is that nobody knows what the law is. The law is always up to interpretation. The law makers think it says one thing, then lawyers and judges often comes to a different interpretation, sometimes a decennium after the law was initially passed. Just look at the recent panic when a New York law on concealed carry of a gun was overturned, or when Roe vs. Wade was overturned. The law is very malleable. Code is not. It means exactly what it says. You can throw all the kinds of input at it, and it will always give you a predictable and repeatable outcome.

[@TomNook.]

@@JanBruunAndersen Actually, you've misunderstood what I've said. Code is indeed definitive, as I said in my post. But code can never be the law. Because governments and lawyers are what make the law. Not optimistic crypto bros who think the code they write is in any way enforcable outside their Web3 environment (that is, until the authorities catch up and prosecute them for e.g. rugpulls)

[@scottydog9997]

Some government contracts make it an obligation though, when they require you to have soc2 or 27001 as part of your business process.

[@RustOnWheels]

Code is lawless.

[@Fluffynix]

Finally someone that says things like they really are. Constructive criticism is good.

[@nnuae]

A quick glance at Yield Samurai's data will clearly show that impermanent loss is perfectly permanent for the majority of liquidity pools.

[@supalova]

The vast majority of crypto projects currently are centralized, no difference than the current fiat system, potentially worst. Defi is used for marketing purposes only. To achieve “defi” status will take time. Bitcoin is the closest crypto to be considered decentralized, but even BTC is currently controlled by a few whales. That will change with time. Blockchain technology will be a game changer, similar to the internet revolution. It’s not only decentralized finance, but decentralization will play an important role not just in the financial sector, but in many other industries.