i'm not worried about my DIS shares getting hacked as they chill in the digital world compounding interest. It appears that investing in crypto is not quite as safe? One of my bros got hacked in mt gox and since then i've been a bit weary of putting serious sums of money into it (i have maybe 1-5% of my portfolio in crypto and not planning on betting the house anytime soon).
It's certainly not as safe. And one hack doesn't constitute "proof" that the entire space is a total fail at beating traditional finance, which should be obvious. Instead we have people like OP making sensational claims about "shills", providing nothing of value to any conversation about the topic.
And every smart contract is a self-funded hack bounty.
Smart contracts are a complete misunderstanding of what contracts are, and what the hard parts of the space of contracts are. They're simply changing the simple problem to be enormously complex, without making the hard problems any easier. In fact it makes the hard problems harder too.
causing great public interest and excitement.
> OP making sensational claims
Def 1. "causing great public interest and excitement"
Well, not really. This story is just "huh, another one". Brings to mind the meme "I'm shocked, shocked!, to see another one of the cryptocurrency LARPers topple over"
Def 2. "very good indeed; very impressive or attractive."
One of the core pillars of cryptocurrency, and DeFi, is that traditional finance is anachronistic, and full of stupid stuff not fit for the modern age.
Take the first sentence on ethereum's intro to DeFi:
"DeFi is an open and global financial system built for the internet age – an alternative to a system that's opaque, tightly controlled, and held together by decades-old infrastructure and processes. "
Lots of the slowness and beurocracy of old finance is scoffed at as being, in more words, "stupid bullshit".
Rule after rule, and obstacle after obstacle, is loudly ranted about how terrible it is.
So the solution, in these people's explicit methods, is to throw away everything and start green field.
Now, I'm a software engineer. I understand the allure of green field. Surely, "how hard could it be"?
So because the description of how stupid cryptocurrency is can fill books (and there are several), let's stick to a short summary of the outcome of DeFi so far:
It's barely newsworthy every time one of these LARP banks topple over, losing all the money.
It's almost a weekly occurance.
And not only is all the money stolen, it's also not reversible!
When one of the founders of the pirate bay hacked a (real) bank's mainframe, he didn't actually get away with much (a couple of hundred dollars, I think was all that his accomplices managed to withdraw from ATMs). The rest was transferred back. (also suddenly "lack of extradition treaty" became a non-problem)
Basically cryptocurrencies and DeFi is software engineers with no understanding of economics, law, or society, discovering why all of the rules, laws, and procedures currently in place exist.
Another example is that AML/KYC laws didn't fall from the sky. "Well what if we didn't have laws at all?" is not really a rational place to start.
That's not to say that traditional finance is perfect. Absolutely not. But the cure for bad laws is not "The Purge".
So yeah, it's not this event, so much as this happens all the fucking time.
Imagine if these people were selling cars, and complaining about how much pushback they're getting for putting them on public roads, while every day there's deaths all over from unregulated cars that have swords on them, chopping heads off of the drivers themselves, and innocent pedestrians.
Like, how do you not see why this is causing pushback and that your way of replacing the seatbelt with a potato is stupid, and that actually the law that says a seatbelt is not allowed to be a potato maybe has a valid point?
Especially since things are more subtle than that. A non-techie cannot tell the difference between a seatbelt and a potato, and that's why the law says your car needs to have actual seatbelts.
Thank you for this. I'd also like to add a point somebody else made - contracts being replaced by code might sound cool in a vague "wow future" way, but if you have enough experience with code, it's actually terrifying.
Code can almost always be exploited and broken in a way actual contracts can't. Giant corporations spend tons of money on various security features, only for them to be broken by some 15 year old that wants to play pirated games on his console.
Why would I possibly want to add that risk to my financial life?
Especially since while contracts can be imperfect too, they have a second layer of security in the form of a judicial system, to invalidate/overrule not just "as code", but with common sense and preventing illegal contracts or legally/morally unenforceable clauses.
