DeFi Is The Dematerialisation Of Finance - (Chris Coney & Alex Benfield) WCSS:014

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For 7 Best DeFi Strategies To Make You Money click --- Chris Coney: Hi there, guys, and welcome to this week's edition of the Weiss Crypto Sunday Special with me, your host, Chris Coney. My guest analyst today is Alex Benfield. The macroeconomic topic we'll be discussing today is the dematerialization of finance. Alex, welcome back to another Sunday Special, mate. Alex Banfield: Thanks very much for having me again. Chris: Thank you for coming. Let's get into this. This was an offshoot from the conversation I had with Kenny Pulkari,. But I already had another line of thought to take with you here. My basic premise is that the process of finance becoming less material and more immaterial has been happening for, well, all of my lifetime at the very least. We're at sort of a peak of it right now. Essentially, trade is you have some value, I have some value, here's the exchange of goods and services — the barter system, right? The problem with that is in economics it's called the coincidence of wants. Like, do you happen to have chickens at the very time I want chickens, and do I happen to have gold at the very time you want gold? If you don't have that coincidence of desires, you can't trade. That's why money was created in the first place, almost as like a token to track value which could be redeemed with anybody else at any time, for whatever they wanted. You want chickens right now? Great. You give me the money and I hold that money until I want to spend it for sausages or whatever else it is that I want. That was the first abstraction from pure trade. Pure trade is that chickens for gold thing, or chickens for cows. But every layer you put on top of that is beginning to dematerialize it away from the actual value itself. All right? There's a whole conversation about money there, which isn't what we're going to talk about today. When I talk about the dematerialization of finance, I'm talking about that token that represents the value you have provided. That's what money is. And then the financial system arose around that, because you can then get derivatives on top of money. Finance is essentially a system that tracks the ownership of value. Whether that value is money or an asset or whatever. That was the original barter system. Then banking comes along, where you want to put your money somewhere. If you want to trade with someone further afield, then you put your money in a bank and you transact between banks. But again, that's another layer of abstraction and the introduction of a middleman to a transaction that is essentially peer to peer. Trade is peer to peer Well, it's not anymore ... not since money was first created. But it’s been so long ago that we’ve had a system that relies on intermediaries and others having custody of our assets that it's difficult to conceive of a system when it is direct. Because of course it wouldn't work direct if everyone has to transact with physical cash. We know that just wouldn't work, it's too slow. The world's too fast now. We don't want to go back. But how do you get the purest form of money in a peer-to-peer sense? That's how we find ourselves in crypto. Before I keep rambling on, have you got any comments on that line of thought there? Alex No. I mean I see your point. I think that the introduction of money helps speed up this process. I can still get my chickens before you need your sausages, or whatever the analogy was there. I think in that sense, the dematerialization of money does help speed up and better this system while it is abstracting it. I've got to be honest there: It is abstracting the value of trade a little bit. But there's benefits that come with that. Chris: I just remembered something. In his book The Bitcoin Standard, Dr. Saifedean Ammous talks about the original ledgers ... the ones that were carved insides of caves and as ledgers of debt. Like we were just talking about, they would literally create a little spreadsheet in the side of the rock that would say that Alex was given four chickens by Chris and then there was nothing on the other side of the ledger, which would mean you've been given value but haven't reciprocated. That's like a debt ledger. The point I'm making with that is that the reason they had to scratch it into the side of the rock is so no one would have to remember it. That is almost like a primitive, primal blockchain, a record of debts so that everyone remembers. And then you tell everyone else, just to make sure that database is in sync.
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