The value of any currency is based on belief at the most fundamental level. A bank loans me 200k to buy a house at a 4% interest rate with the firm belief that, once paid, they will have more USD than before and that it will be still be the dominant currency, etc. We believe the USD will have utility and a store of value. In return I put my credit and or collateral on the line. If I cant pay I lose my house and my credit suffers.
Ok but let's just say people DID believe BTC or some crypto would retain its utility and store of value too. And let's say I have 250k worth of bitcoin today. Instead of using a centralized bank, there is decentralized system where hundreds or thousands of people all over the world, regardless of culture, language or local currency, are willing to hold my BTC at, let's say, a 10% interest rate. I get 200k up front. I buy my house in cash. Now I owe 220k over the course of 30 years. If I pay it I get my BTC or crypto back, hopefully it has even appreciated. Now I have my BTC and my house. But let's say I cant pay it back - I lose my BTC, my collateral, but I keep my house and my credit.
This is my understanding, DeFi is like crowdsourcing, and it is very exciting to me. BUT it is based on some assumptions, namely that I can find enough people who believe what I believe, viz. that in 15 to 30 years BTC will retain utility and store of value.
See this link for a process like this that is up and running. Can these rates last? Is there a way to tokenize stocks and make crypto banks a decentralized version of what we have now that works better for the everyman? Very difficult but exciting questions.
https://blockfi.com/faq?utm_source=...-eGs_DGCAqlQ1MGW0rJqp5mwASheuG50aAuyXEALw_wcB
Perhaps I have some fundamental misunderstanding about this and if so I would like to hear some other opinions, but this seems to be the advantage of a 'global' currency that people are excited about. It's a way to pool resources and avoid the trappings of traditional finance, though with that there are consequences and considerations that must be worked out in great detail. I think this is where we are going, but there are a lot of obstacles that require serious thought. I am not as bullish as some here but I am not bearish in the least. These ideas are not new but the technology making it very possible, as far as I know, is.
I will edit to add that there are other projects I am very excited about, some that are more environmentally friendly and are focused on bringing DeFi to other parts of the world, some focused on speed and low transaction cost between borders, some focused on absolute anonymity, some focused on bringing real world data to the blockchain for purposes of payroll, inventory, etc. Etc. Blockchain technology will not be going away, that is as obvious to me today as it should've been to anyone when the internet hit the mainstream - even if the warnings of a dot com bubble had truth.
As Beretta said, globalism is coming for better and/or worse, and nothing can stop it.