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DeFi is the Future. But Will my Son Desire a Bank Account When he Grows up?

Provided the Cambrian surge of the decentralized economy, the question I find myself asking more often is: ‘will my newborn child have (and even need) a savings account when he’s older?’

Just 5 years ago, this question would have been absurd. Because its beginning, the bank has actually worked as the focal point of the international financial quilt. The economic fabric of that system relatively unravels without the bank weaving all of it together.

Today, however, this question is not only genuine however somewhat tough to respond to. Especially thinking about the extensive abilities of decentralized finance (DeFi). Now, a person has the capability to trade, conserve, provide, borrow and stake assets to earn substantially more yield, all without a bank operating as an intermediary.

Will the decentralized economy take over the traditional economy? It may appear like a favorable alternative to more youthful generations. But what might that appear like in the years to come?

Bank are organizations.

Because the dawn of human civilization, centralized ‘banks’ have been developed in the minds of the people– framed as a foundation of social order and success. Most individuals can recount the coming-of-age experience of opening a bank account. Nevertheless, closer assessment of the structure of this system reveals something extremely worrying. Banks are organizations. And usually, predatory ones.

While cryptocurrency empowers and enables a user to own their own properties and gain access to them whenever they please, banks consistently look to take advantage of their users. The nefarious and predatory practices employed by banks not just extract worth from users, but outright exploit their consumers.

This is no more obvious than in the practice of “cross-selling” utilized by Wells Fargo. The scandal discovered that, throughout 14 years, bankers were directed to press customers. They encouraged them to open accounts that were not required or asked for. This was a method to gather inflated charges– eventually culminating in a $3 billion criminal settlement.

This is not to say that all banks act criminally. This does, nevertheless, suggest that as private organizations banks will constantly run in the best interests of their investors initially. After all, that’s what businesses do. That’s their prime regulation. To expect anything else of an inanimate entity could be seen as quite silly.


That’s specifically why alternative paradigms like the decentralized finance ecosystem are so attractive. As we end up being wiser to these practices employed by banks and the methods which they exploit their consumers, the allure of cryptocurrency ends up being more evident. With no main authority, the crypto market does not play favorites, nor does it pressure users into bad financial choices.

Defi and the strength of the economy.

Advancements over the past number of years have clarified the state of the worldwide economy. Namely, the Covid-19 pandemic ruined the global economy, and required many people to reconsider where they could make and keep money.

As a result of the pandemic, almost half of small businesses closed a minimum of temporarily, and employers cut their personnel by 39%. In response, the United States administered north of $5 trillion in relief to people and organizations to help them endure the economic crisis.

Where did this money originated from? A printer. As specific Americans got cash payments of $1,200, concerns grew over mounting inflation rates and the economic stability of the country after printing and handing out a lot cash. Interestingly, this started the crypto boom of 2020.

Cryptocurrency exchanges saw a considerable uptick in possession purchases in the quantity of $1,200. This showed that individuals were afraid of having cash on-hand, and, rather, felt it much safer to park their capital into crypto possessions. All told, 11% of young people moved their stimulus look into cryptocurrency– a 4% uptick from the six months prior.

Remarkably, of the young adults who bought crypto assets, 60% viewed digital possessions as a long-lasting investment. As the marketplaces continue to recover from the pandemic, the more youthful generation might continue exploring options to standard banking and financial investment methods, given the uncertainty within the market.

DeFi: The guarantee.

Let’s face it– the crypto economy is more powerful than people care to confess. Pundits and cynics are exceptionally opportunistic when it comes to crypto’s growing discomforts. While it has not always been smooth sailing, a zoomed out viewpoint shows simply how quick the rise of the decentralized economy has been since its beginning in 2009.

Even during this unstable time, there is still incredibly high conviction that the crypto markets will stay into the future. One of the main reasons that the sentiment is higher than in previous bearishness is because of the platforms and facilities that are now in place. Between DeFi, NFTs, DAOs, and the growth of blockchain infrastructure, the Web3 ecosystem is a much more robust entity than in previous years.

Unlike previous years, numerous effective gamers from the traditional financial investment world, consisting of Elon Musk, Mark Cuban, and Kevin O’Leary, are all bought the large platforms that control the space. Investments from these characters indicate their level of conviction in the space, and the possibility of its supreme success. Formerly, Web3 appeared as a degen playground. Now however, the area looks like the ease and use of Web2, but with improved security and ownership.


With that said, it’s rather sensible to conclude that by the time my kid even amuses the idea of opening a checking account, Web3 will be so greatly improved that he might reevaluate the requirement for a bank at all.

Economic freedom.

Perhaps the primary factor my son might not require a bank account is the fact that cryptocurrency offers economic liberty in such a way that the conventional economy can not. On the surface, many make the assumption that monetary flexibility simply implies having the monetary methods to do whatever one desires.

The concept of decentralized finance however, suggests that real economic freedom indicates an individual has complete control of their funds, with absolutely no dependence on a 3rd party. The guarantee of an economy devoid of banking intermediaries is only scratching the surface now, however will be the status quo by the time my kid checks out banking choices.

In the same vein, banks have working hours. Life, on the other hand, does not comply with the exact same requirements. The ability to have round-the-clock access to funds is an exceptionally unique concept that lots of are recently getting accustomed to. In the years to come, the immediacy with which users can move funds will only end up being more vital, and even more appealing.

The bottom line.

The decentralized economy is making headway on conventional banking day by day. To be clear, the Web3 area will need to continue making significant strides to really compete with the standard, centralized economy. There are presently still difficulties within the DeFi area, like self-custody of private secrets, longform cryptographic addresses, wicked actors … The list goes on.

Nevertheless, offered the rate of improvement to this point, my self-confidence stays high that the decentralized environment might be my son’s first choice for banking when that time comes.