Hi everyone,

So one of my friends the other day was asking about what I thought the most open question in tech was. Although this could have various interpretations, I feel he was asking about what problems are out there that could be solved by new technology that could change the landscape of society/economy etc etc...

I feel one of the major question that Bitcoin solves is, "How to implement a currency system without a centralised financial institution".
This should've been an open question before Satoshi Nakamoto's paper solved the problem. Although there were many algorithms to solve distributed consensus established decades back, he used these ideas to solve a fundamental problem which has now bought an enormous change in our society/economy.
This concept was further extended to solve more general decentralisation problems through the introduction of Ethereum and Smart Contracts which has opened up  a variety of applications such as DeFi.

So in this sense, what other open question do y'all think tech has the potential to solve?

But usually loans are usually for borrowing one type of asset, keeping another type of asset for collateral right? If one wants to do this, the given suggestion is not viable right?

Im guessing that using DeFi will have lessened interest rates as there is only on two people to benefit here (The lender through the loan interest and the borrow through actually borrowing the money) and not the bank which would've taken up a share for itself for acting middleman

So can this loan system work only if the person's identity and hence background is known?


Also there isn't any outstanding authority for cryptocurrency transactions right as most governments don't really recognise it officially. So are these methods implemented?

But usually loans are usually for borrowing one type of asset, keeping another type of asset for collateral right? If one wants to do this, the given suggestion is not viable right?

Hi everyone,

I have recently been interested about cryptocurrencies and its applications and started reading about DeFi today. In order to establish a credit type system without a centralized authority, we need to ensure that the person who is borrowing crypto from a particular lender (both of whose real world identity is unknown), honestly provides money back with the interest rate. In a centralized system this is ensured through collateral and if the person doesn't repay the loan he is punished by the existing centralized financial and legal institutions. I was wondering how this system is implemented in the case of DeFi as when basing the DeFi application over a cryptocurrency protocol, the protocol only ensures whether the lender to borrower transaction is valid and verifies it but doesn't tell anything about whether the borrower will pay back or not. How are we ensuring that the borrower does indeed pay back?