Cryptocurrency investors have finally learned to blindly stop buying Bitcoin with every utterance from Elon Musk. Prices barely rose on Wednesday when Tesla’s CEO announced that the electric car company would probably pay again in Bitcoin.He is both him and his spacecraft company SpaceX Holds cryptocurrency.
One Bitcoin is worth about $ 32,000, half the April high. Instead, the relevant financial frontier, decentralized finance, has captured the imagination of potentially confusing people. They include Jack Dorsey, the founder of the payment group Square, which joins Musk in The BWord, an online crypto festival.
DeFi envisions a traditional intermediary-free financial system, as it is dubbed. Dream is a fast and inexpensive accessible service via the public blockchain. Ethereum or other cryptocurrencies can be used for services such as market lending that are created and maintained by automated programs.
Automated market makers charge a fee for transactions. Liquidity comes from a pool of tokens offered by investors, and some want to use crypto assets for leveraged bets. According to the website DeFi Pulse, the (cryptographic) collateral put into DeFi-type projects has already exceeded $ 50 billion.
DeFi seems to offer utilities that crypto promises and could hardly ever provide. Of course, the lack of mediators means a lack of regulation. Anonymity is both a draw and a drawback. Low security means high risk.
There are already reports that money has disappeared overnight. Regulatory authority No action has been taken in the United States yet. Leveraged bets, on the other hand, can increase the volatility of cryptocurrency prices.
As DeFi grows, more intermediaries will compete for participation. Start-ups such as Celsius are already offering DeFi services. Square has announced that it will launch a platform for DeFi projects built on Bitcoin.
Square’s commitment to Bitcoin is more consistent than Tesla’s commitment. In February, we purchased $ 170 million in cryptocurrencies, enabling us to trade via Cash App. Bitcoin trading tripled sales for the quarter ended in June.
A positive correlation between Dorsey’s beard length and his idealism became apparent during the hypothetical debate he wanted Bitcoin to create world peace.
You will need more supporters first. China’s crackdown on Bitcoin mining has pushed prices down. There is also general criticism that the mining industry has high carbon dioxide emissions. To regain confidence, we need more than DeFi and boosterism promises from Musk and Dorsey.
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DeFi/bitcoin: Dorsey endorses the ultimate disruption Source link DeFi/bitcoin: Dorsey endorses the ultimate disruption