Will "De-Fi" beat Banks sometime in the future?

[Abiky]

Decentralized Finance ("De-Fi") is a new trend which has been gaining steam ever since the first smart contract platform (Ethereum) came into existence 6 years ago. Right now, it's possible to borrow, lend, and even trade crypto assets without the need for a middleman. The introduction of stablecoins brought us the stability of Fiat along with the convenience of crypto. People can have money in Fiat, without the need for a bank account and still earn interest by holding it. This brings complete financial freedom to the world (something that was never thought possible before the inception of Bitcoin and Ethereum).

Of course, not everything is reds and roses. "De-Fi" has its limitations since it's fairly new in the mainstream world. Blockchain is still unable to scale to millions or even billions of people worldwide, so the experience will not be the same as with Banks. Fortunately, scaling solutions are on the works with the hopes of putting an end to such issues. If all goes well, "De-Fi" might beat banks in the future. Everything will depend on mainstream adoption for this to succeed in the long run.

What do you think? Will "De-Fi" beat banks in the long term? Or is it still too early to tell? Do banks consider "De-Fi" as a threat to their existence? Your input will be greatly appreciated. Thanks in advance.

[harizen]

What do you think? Will "De-Fi" beat banks in the long term? Or is it still too early to tell? Do banks consider "De-Fi" as a threat to their existence? Your input will be greatly appreciated. Thanks in advance.

No even we count for decades. The banking system is so huge and will evolve more while in progress. Big individuals, business owners, big people, downed to a regular person will still prefer a centralized system because of safety, assurance, and being insured in case of a fu*ked up.

But honestly, I want to see a full decentralized system but already accept the reality that it won't happen even by less chance.

Rather than replacing banks, why not hope that they will exist at the same time, take advantage of them and enjoy both.

[AmoreJaz]

What do you think? Will "De-Fi" beat banks in the long term? Or is it still too early to tell? Do banks consider "De-Fi" as a threat to their existence? Your input will be greatly appreciated. Thanks in advance.

No even we count for decades. The banking system is so huge and will evolve more while in progress. Big individuals, business owners, big people, downed to a regular person will still prefer a centralized system because of safety, assurance, and being insured in case of a fu*ked up.

But honestly, I want to see a full decentralized system but already accept the reality that it won't happen even by less chance.

Rather than replacing banks, why not hope that they will exist at the same time, take advantage of them and enjoy both.

i also don't think that we will see this happen in our lifetime. the traditional banking system has been established for decades and decades and replacing them with the new technology is very far from happening, as of this moment. even now, DeFi system is showing vulnerability to outside attacks. so it is quite difficult to sell the DeFi system to ordinary users. maybe, right now, some are enjoying the benefits of DeFi but the security alone, it can't guarantee its users. just be grateful that people can enjoy the DeFi market along with the traditional system. so it is their choice how they can grow their funds via these options.

[TravelMug]

Nah, it's too far fetch and I don't think it won't happen in the future. I don't see banks seeing it as a threat though, and maybe they are going to take advantage of it as well, to lure people into their banks. That's how these banks works for centuries. "If they can't beat them, join them attitude".

De-Fi, can exist with banks too, so there will be no problem as well. Maybe in the future, there will be De-fi 2.0 so still a win-win for us and the banks as the money keeps on flowing.

[OcTradism]

DeFi and cryptocurrencies will be more seriously regulated by governments and they will face with many barriers for their growth.

DeFi projects are not like Bitcoin. Their developers are publicly known and governments can catch them if they want. Bitcoin is an anonymous Satoshi Nakamoto that makes it different.

If governments can force Binance to do KYC on all customers, they can do the same or more serious things on DeFi projects. The latest KYC updates on Binance is a new warning that exchange wallet is not the safe wallet to use.

I don't like Binance with that update because they don't give customers time to withdraw money if they don't want to complete KYC. What do Binance think when they allow withdrawal but don't allow to cancel current orders? It's very shady rule.

[vv181]

"De-Fi" has its limitations since it's fairly new in the mainstream world. Blockchain is still unable to scale to millions or even billions of people worldwide, so the experience will not be the same as with Banks. Fortunately, scaling solutions are on the works with the hopes of putting an end to such issues. If all goes well, "De-Fi" might beat banks in the future.

Well, scalability is one of many important things that need to be addressed, but as you said it won't solely depend on it. Though fixing the scalability issue is one step forward, but defi needs more than that to truly compete with banks.

Its been in the cryptocurrencies spaces that blockchain and defi have become a buzzword. Like some people lured and became a maximalist that think cryptocurrencies will replace fiat, so does with defi that will replace banks. It's not the matter of bank or defi, but defi and bank will/could coexists with each other. Don't get me wrong though, cryptocurrencies give us the possibility we can't imagine, but the world needs to comply with the regulatory issue.

[dhemasm]

What do you think? Will "De-Fi" beat banks in the long term? Or is it still too early to tell? Do banks consider "De-Fi" as a threat to their existence? Your input will be greatly appreciated. Thanks in advance.

I think no and if there is chance it's need really long time, The Blockchain itself it's already threat for the bank in the first place and now DeFi it's with more complex finance process integrated with Blockchain but still bank have more advantages because it's backed by gov and many other big party beside that people still prefer more safe system (In case any thief, fraud, etc) Bank still can handle it much better in term of refund or reporting to the police while Decentralized System like DeFi it's little bit hard, It's my personal experience when i report to the police for my case it's little bit complicated for Crypto to handle by them (Third world Country), Here https://bitcointalk.org/index.php?topic=5221759.msg53734483#msg53734483.

[cryptoaddictchie]

What do you think? Will "De-Fi" beat banks in the long term? Or is it still too early to tell? Do banks consider "De-Fi" as a threat to their existence? Your input will be greatly appreciated. Thanks in advance.

I think its too early to tell cause there are still many who patronized bank and only those who are into crypto are using defi products. In terms of rate there is no doubt defi is the winner however, people are skeptical and probably looking into the legality of those projects. We all knew that defi runs on a decentralized ecosystem where people are not used to it.

[Retainly_Collie]

This is not considered a competition, I realize that between traditional finance and cypto there will need to be consensus to have a common solution. Defi is very good, but we only look at the good side of it is not enough, the current life needs more than that.

[RussianEnglishTranslation]

Banks will adopt DeFi if it's on a secure platform that can scale, like Flare or NEAR.

[cabron]

Banks will adopt DeFi if it's on a secure platform that can scale, like Flare or NEAR.

This is what we have been seeing already like the Nexo and Blockfi. Although they are using cryptocurrency, this is CEFI which is basically a registered finance company. Many will still prefer to trust these type of companies because they feel safe in case of hacks like what happened to Polynetwork which if the hacker was just not traced and identified, he wouldn't be sending back the stolen funds.

With registered companies performing Cefi, they have safeguards of funds and insurances too which banks could be on way to develop their own to find relevance in this recent change in the financial industry.

[riskarcher]

No one will be able to replace a bank as long as the main transaction is a Physical currency. De-fi is a form of blockchain-based finance that does not rely on central financial intermediaries such as brokers, exchanges, or banks to offer traditional financial instruments, and instead uses smart contracts on the blockchain, the most common being Ethereum. So basically De-fi is still a crypto product based on digital assets unlike banks that have physical assets.

[Abiky]

DeFi and cryptocurrencies will be more seriously regulated by governments and they will face with many barriers for their growth.

DeFi projects are not like Bitcoin. Their developers are publicly known and governments can catch them if they want. Bitcoin is an anonymous Satoshi Nakamoto that makes it different.

If governments can force Binance to do KYC on all customers, they can do the same or more serious things on DeFi projects. The latest KYC updates on Binance is a new warning that exchange wallet is not the safe wallet to use.

I don't like Binance with that update because they don't give customers time to withdraw money if they don't want to complete KYC. What do Binance think when they allow withdrawal but don't allow to cancel current orders? It's very shady rule.

Regulations cannot be enforced on a truly-decentralized "De-Fi" platform. That's because everything relies on a distributed blockchain ledger instead of a central server. But we all know most (if not all) "De-Fi" platforms are not as decentralized as they claim to be. After all, most "De-Fi" platforms depend on centralized infrastructure (like centralized hosting, among many other things). If this keeps up, "De-Fi" might never replace banks in the future.

One thing for sure is that "De-Fi" is subject to the underlying Blockchain network's performance. A blockchain with low transaction capacity (like Ethereum) will raise fees and increase wait times to everyday people. "De-Fi" will not be able to compete with banks this way, since only the wealthy will be able to participate in the system. Fortunately, scaling technologies are being developed to help remediate the situation. Since "De-Fi" is still in its very beginnings, we're going to have to have some time until it matures enough to compete with mainstream banks. With how everything's been going so far, it seems that both "De-Fi" and banks will be here to stay for a very long time. Just my opinion

[Bitstar_coin]

Defi are very vulnerable as it is, there are too many hacked cases surrounding the defi platform, the banking sector is a very strong place and has less risk as it is with the defi platform,  before they can even dream of taking over the banking system they may have to work seriously on the weak security issues with them, people needs to know their funds are well properly protected, perhaps in the future when defi are more secured it is possible.

[bitcoin-shark]

now the interests of the banking system including taxes, management costs, cost of money are practically zero or even negative, instead the interests of the various sites defi in rare cases can even reach more than 100% so there is no struggle, competition, platforms defi win over traditional banks and more and more users choose defi as their first investment resource

[GaxviiBuss]

To me, time will tell, because cryptocurrency revolves around risk and the bank is a set-up that operates on people confidence which is base on trust and limited risk, so the risk element is a barrier for defi to beat banks, but we never can tell what will happen, but for now, dont think so.

[odukoyaewatomi27]

It is not impossible for Defi to replace the banks to some capacity in providing financial services for people in the future through the Blockchain, the problem i believe still lies in the global acceptance of cryptocurrency as a secure and trusted means of doing financial transactions. NFTs for example are good for people to use as assets for financial services and more innovations like this will increase Defi adoption.

[Pelana vreo]

I like the loan feature on the DeFi platform, currently the DeFi platform also accepts NFT as loan collateral. I like this feature, like banking in general, we no longer need to go to the bank office with documents such as land certificates, houses and cars for loans, but everything takes time and we will see the banking system is no longer used and users will love the features it has to offer
by DeFi

[brooksby]

Decentralized Finance ("De-Fi") is a new trend which has been gaining steam ever since the first smart contract platform (Ethereum) came into existence 6 years ago. Right now, it's possible to borrow, lend, and even trade crypto assets without the need for a middleman. The introduction of stablecoins brought us the stability of Fiat along with the convenience of crypto. People can have money in Fiat, without the need for a bank account and still earn interest by holding it. This brings complete financial freedom to the world (something that was never thought possible before the inception of Bitcoin and Ethereum).

Of course, not everything is reds and roses. "De-Fi" has its limitations since it's fairly new in the mainstream world. Blockchain is still unable to scale to millions or even billions of people worldwide, so the experience will not be the same as with Banks. Fortunately, scaling solutions are on the works with the hopes of putting an end to such issues. If all goes well, "De-Fi" might beat banks in the future. Everything will depend on mainstream adoption for this to succeed in the long run.

What do you think? Will "De-Fi" beat banks in the long term? Or is it still too early to tell? Do banks consider "De-Fi" as a threat to their existence? Your input will be greatly appreciated. Thanks in advance.

What do you consider as "beat"?

Maybe DeFi takes aways significant market shares from the traditional banking sector, but will DeFi make banking completely disappear? I severely doubt that. Not that I think there will still be grandmas and grandpas who need a bank in 70 years from now, but they are an industry that could theoretically be very agile. We are not talking about a single company here, but about the most powerful sector in the world. They might change the meaning of the word banking themselves, whatever their solution maybe if they feel threatened enough by crypto. The best they can do for now is to incorporate crypto and all the developments that are coming. I don't understand why they don't have crypto ATMs because they have all the KYC anyway? It would be awesome if you could just use your card, buy some Bitcoin and get a QR code printed out or an email that is encrypted or whatever. They have so many possibilities. Even if they took a cut like 1%, I am sure many would use it if they need it instantly.

[Rengga Jati]

The bank is something big, complicated, regulated, and also full of power, of course, it is under the government of a country, with many interests and significance from many parties.
Although nothing is predictable accurately and we will not know the future exactly, beating banks is something that is very difficult, even it si De-Fi or other types of crypto projects.

The interests of the banking system, including taxes, management costs, and the cost of money, are now nearly zero or even negative, whereas the interests of the numerous sites are now almost zero or even negative. Defi can achieve 100% in exceptional circumstances, therefore there is no competition, platforms defi triumph over traditional banks, and more and more people select defi as their primary investment resource.

Are you sure about this?