Article on unbanked
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# Crypto is not a solution for the unbanked
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Crypto is not a solution to unbanked, because by its [deflationary](../concepts/deflationary.md) design it [cannot function as a currency](is-bitcoin-currency.md) therefore it is unusable as a scaleable means for purchasing goods and services.
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Crypto is not a solution for the [unbanked](../concepts/unbanked.md), because by its [deflationary](../concepts/deflationary.md) design it [cannot function as a currency](is-bitcoin-currency.md) therefore it is unusable as a scaleable means for purchasing goods and services.
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The purpose of retail banking services is to provide stable, reliable and safe means for citizens to transact with money that is safely custodied by a trusted third party with the guarantees of regulation by the government that the party will hold their accounts on their behalf. This includes practices like customer service, deposit insurance, fraud detection, transaction reversal and issuing of payment cards.
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# Decentralized Finance (DeFi)
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Defi is a broad category of [smart-contracts](smart-contracts.md) which loosely correspond to digital contracts running on a [blockchain](blockchain.md) which allow users to create collateralized loans out of [stablecoin](stablecoin.md) and which have side payouts in so-called "[governance tokens](governance-token.md)".
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DeFi generally refers to a collection of services which offer lending products offered by non-banks and which exist outside the regulatory perimeter as a form [regulatory-arbitrage](regulatory-arbitrage.md) and to fund margin trading activities to [speculaate](speculation.md) on [crypto assets](cryptoasset.md).
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DeFi generally refers to a collection of services which offer lending products offered by non-banks and which exist outside the regulatory perimeter as a form [regulatory arbitrage](regulatory-arbitrage.md) and to fund margin trading activities to [speculaate](speculation.md) on [crypto assets](cryptoasset.md).
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See also [yield farming](yield-farming.md), [AMM](amm.md), [DEX](dex.md) and [shadow bank](shadow-bank.md).
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@ -12,7 +12,6 @@ See also [yield farming](yield-farming.md), [AMM](amm.md), [DEX](dex.md) and [sh
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1. Barbereau, Tom, Reilly Smethurst, Orestis Papageorgiou, Alexander Rieger, and Gilbert Fridgen. 2022. ‘DeFi, Not So Decentralized: The Measured Distribution of Voting Rights’. In Proceedings of the 55th Hawaii International Conference on System Sciences. https://scholarspace.manoa.hawaii.edu/handle/10125/80074.
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1. Barbereau, Tom, Reilly Smethurst, Orestis Papageorgiou, Johannes Sedlmeir, and Gilbert Fridgen. 2022. ‘Decentralised Finance’s Unregulated Governance: Minority Rule in the Digital Wild West’. Available at SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4001891.
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1. Brennecke, Martin, Benjamin Schellinger, Nils Urbach, and Tobias Guggenberger. 2022. ‘The De-Central Bank in Decentralized Finance: A Case Study of MakerDAO’. In 55th Hawaii International Conference on System Sciences (2022). https://doi.org/10.24251/HICSS.2022.737.
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1. Carter, Nic, and Linda Jeng. 2021. ‘DeFi Protocol Risks: The Paradox of DeFi’. SSRN Electronic Journal, 1–35. https://doi.org/10.2139/ssrn.3866699.
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1. Chen, Yan, and Cristiano Bellavitis. 2020. ‘Blockchain Disruption and Decentralized Finance: The Rise of Decentralized Business Models’. Journal of Business Venturing Insights 13. https://doi.org/10.1016/j.jbvi.2019.e00151.
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1. Ciriello, Raffaele Fabio. 2021. ‘Tokenized Index Funds: A Blockchain-Based Concept and a Multidisciplinary Research Framework’. International Journal of Information Management 61: 102400. https://doi.org/10.1016/j.ijinfomgt.2021.102400.
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1. Eikmanns, Benedikt C., Pascal Mehrwald, Isabell M. Welpe, and Philipp G. Sandner. n.d. ‘Is Ethereum the New IOS? Exploring the Platform Economy of Decentralized Finance’. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3992625.
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1. Saengchote, Kanis. 2021. ‘A DeFi Bank Run: Iron Finance, IRON Stablecoin, and the Fall of TITAN’. IRON Stablecoin, and the Fall of TITAN (July 16, 2021).
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1. Schär, Fabian. 2021. ‘Decentralized Finance: On Blockchain-and Smart Contract-Based Financial Markets’. Federal Reserve Bank of St. Louis Review 103 (2): 153–74. https://doi.org/10.20955/r.103.153-74.
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1. Sun, Xiaotong. 2021. ‘Centralized Governance in Decentralized Finance (DeFi): A Case Study of MakerDAO’. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3971791.
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1. Zetzsche, Dirk A., Douglas W. Arner, and Ross P. Buckley. 2020. ‘Decentralized Finance’. Journal of Financial Regulation 6 (2): 172–203. https://doi.org/10.1093/jfr/fjaa010.
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1. Zetzsche, Dirk A., Douglas W. Arner, and Ross P. Buckley. 2020. ‘Decentralized Finance’. Journal of Financial Regulation 6 (2): 172–203. https://doi.org/10.1093/jfr/fjaa010.
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# Predatory Inclusion
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Predatory inclusion refers to a process whereby members of a marginalized group are provided with access to a good, service, or opportunity from which they have historically been excluded but under suboptimal or risky conditions that jeopardize the benefits of access.
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With regards to financial assets this concept is typically discussed in conjunction with the [unbanked.](unbanked..md)
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See [crypto exchange](crypto-exchange.md).
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## References
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1. ‘Guidance on Cryptoassets’. 2019. Financial Conduct Authority. https://www.fca.org.uk/publication/consultation/cp19-03.pdf#page=11.
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1. Hacker, Philipp, Ioannis Lianos, Georgios Dimitropoulos, and Stefan Eich. 2019. Regulating Blockchain: : Techno-Social and Legal Challenges. https://doi.org/10.1093/oso/9780198842187.001.0001.
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1. Feinstein, Brian D, and Kevin Werbach. 2020. ‘The Impact of Cryptocurrency Regulation on Trading Markets’. http://ssrn.com/paper=3649475.
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1. Ivaniuk, Viktoria. 2020. ‘Cryptocurrency Exchange Regulation – An International Review’. Magda Dziembowska, Robert Dziembowski, Apelacja w Postępowaniu, 67.
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1. Kapsis, Ilias. 2021. ‘Should We Trade Market Stability for More Financial Inclusion? The Case of Crypto-Assets Regulation in EU’. FinTech, Artificial Intelligence and the Law: Regulation and Crime Prevention, 85–104. https://doi.org/10.4324/9781003020998-9.
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1. Maddox, Alexia, and Luke J Heemsbergen. 2021. ‘Digging in Crypto-Communities’ Future-Making: From Dark to Doge’. M/C Journal 24 (2 SE-). https://doi.org/10.5204/mcj.2755.
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1. Maddox, Alexia, and Luke J Heemsbergen. 2021. ‘Digging in Crypto-Communities’ Future-Making: From Dark to Doge’. M/C Journal 24 (2 SE-). https://doi.org/10.5204/mcj.2755.
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# Recentralization
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A term for [blockchain](blockchain.md) project which alleges [decentralization](decentralization.md) in either their design, yet produces an outcome in which control of the protocol remains centralized in the hands of one or several central parties. Projects may achieve this end either intentionally or unintentionally.
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A term for [blockchain](blockchain.md) projects which alleges [decentralization](decentralization.md) in either their technical design or political imaginaries, yet produce an outcome in which control of the protocol remains centralized in the hands of one or several central parties. Projects may achieve this end either intentionally or unintentionally.
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See [DeFi](defi.md).
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See [web3](web3.md) and [DeFi](defi.md).
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## References
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1. Aramonte, Sirio, Wenqian Huang, and Andreas Schrimpf. 2021. ‘DeFi Risks and the Decentralisation Illusion’, 16.
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# Techno-obscurantism
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The use of deliberately obtuse or confusing technical jargon as a means to promote investment scams. Often used in projects that promote [ICO](ico.md) tokens or proposed [technosolutionism](ideologies/technosolutionism.md) projects
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See [ICO](ico.md).
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# Unbanked
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The *unbanked* is a term for individuals who lack access to traditional financial services and normal [bank](bank.md).
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The most commonly cited reasons for being unbanked are:
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1. Insufficient funds to maintain a minimum account balance
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2. Lack of domestic banks, or untrustworthy banks with suboptimal [safety](deposit-insurance.md) regarding customer [deposits](deposit.md).
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3. Lack of government identification or proof of residency needed to pass [KYC](kyc.md) checks to open an account.``
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See also [predatory inclusion](predatory-inclusion.md).
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## References
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1. Howson, P., & de Vries, A. (2022). Preying on the poor? Opportunities and challenges for tackling the social and environmental threats of cryptocurrencies for vulnerable and low-income communities. Energy Research and Social Science, 84(xxxx), 102394. https://doi.org/10.1016/j.erss.2021.102394
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1. Koning, J. P. (2020). Bitcoin Financial Literacy and Crypto-Twitter. In American Institute for Economic Research. https://www.aier.org/article/bitcoin-financial-literacy-and-crypto-twitter/
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1. Aitken, R. (2017). ‘All data is credit data’: Constituting the unbanked. Competition and Change, 21(4), 274–300. https://doi.org/10.1177/1024529417712830
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1. Babu, A. (2020). Behind the Veil of Decentralization: Analyzing Blockchain Frames and Sponsors in US News. In SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3749482
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1. Chen, Y., & Bellavitis, C. (2020). Blockchain disruption and decentralized finance: The rise of decentralized business models. Journal of Business Venturing Insights, 13. https://doi.org/10.1016/j.jbvi.2019.e00151
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1. Crandall, J. (2019). Cryptoeconomic Geographies and Contestation in Puerto Rico [PhD Thesis]. In Thesis (Issue May). http://jilliancrandall.net/cryptoeconomic-geographies-and-contestation-in-pr/
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1. Greeley, B. (2019). Facebook’s Libra will not help the unbanked. Financial Times, 18.
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1. Kapsis, I. (2021). Should we trade market stability for more financial inclusion? The case of crypto-assets regulation in EU. FinTech, Artificial Intelligence and the Law: Regulation and Crime Prevention, 85–104. https://doi.org/10.4324/9781003020998-9
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1. Sen, A., Lindquist, J., & Kolling, M. (2020). Who’s Cashing in? Contemporary Perspectives on New Monies and Global Cashlessness (Vol. 19). Berghahn Books.
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1. Swartz, L. (2020). New money: How payment became social media. Yale University Press. https://yalebooks.yale.edu/book/9780300233223/new-money
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1. Vasudevan, R. (2020). Libra and Facebook’s Money Illusion. Challenge, 63(1), 21–39. https://doi.org/10.1080/05775132.2019.1684662
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* [Sound money](../concepts/sound-money.md)
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* [Ponzi scheme](../concepts/ponzi-scheme.md)
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* [Pump and dumps](../concepts/pump-and-dump.md)
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* [Exit scam](../concepts/exit-scam.md)
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* [Wash trading](../concepts/wash-trading.md)
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* [Crypto exchanges](/concepts/crypto-exchange.md)
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* [Greater fool theory](../concepts/greater-fool-theory.md)
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* [Bucket shop](../concepts/bucket-shop.md)
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* [Artificial demand](../concepts/artificial-demand.md)
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* [Financial asset](../concepts/financial-asset.md)
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* [Unbanked](../concepts/unbanked.md)
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* [Assets](../concepts/assets.md)
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* [Real estate](../concepts/real-estate.md)
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* [Gold](../concepts/gold.md)
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* [Recentralization](../concepts/recentralization.md)
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* [High control groups](../concepts/high-control-group.md)
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* [Thought terminating cliche](../concepts/thought-terminating-cliches.md)
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* [Techno-obscurantism](../concepts/techno-obscurantism.md)
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* [Bandwagon bias](../concepts/bandwagon-bias.md)
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* [Tinkerbell effect](../concepts/tinkerbell-effect.md)
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* [Endowment effect](../concepts/endowment-effect.md)
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<iframe width="560" height="315" src="https://www.youtube.com/embed/K5JtPTyc0y0" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
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A deep dive into the nature of securities and their relation to crypto tokens with Stephen Diehl and Rufus Pollock.
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In episode #3 of our ongoing deep dive into web3 and crypto, we explore the nature of financial products known as "securities", their relation to crypto tokens, and the regulatory framework that exists around these structures.
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* Youtube: https://www.youtube.com/watch?v=z2uAg-AIs-Y
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* Podcast: https://anchor.fm/life-itself/episodes/Are-Cryptocurrencies-Securities--The-Nature-of-Securities--Their-Relation-to-Crypto-Tokens-with-Stephen-Diehl-e1fph69
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* Wiki topic: [Securities Framework](../concepts/security.md)
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In episode #3 of our ongoing deep dive into web3 and crypto, we explore the nature of financial products known as "securities", their relation to crypto tokens, and the regulatory framework that exists around these structures.
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***
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# Episode Notes
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* Evolution and capitalism metaphor: extremophiles.
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* **What is the right interplay between investment risk and the rule of law? Is creative destruction by any extra-legal means a positive force in the world?**
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***
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# Topics
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## Concepts Covered
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* [security](../concepts/security.md)
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* [howey-test](../concepts/howey-test.md)
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* [productive-asset](../concepts/productive-asset.md)
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* [ico](../concepts/ico.md)
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***
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## References
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1. Bindseil, Ulrich, Patrick Papsdorf, and Jürgen Schaaf. 2022. ‘The Encrypted Threat: Bitcoin’s Social Cost and Regulatory Responses’. 7 January 2022. https://www.suerf.org/docx/f_88b3febc5798a734026c82c1012408f5_38771_suerf.pdf.
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1. Bank of International Settlements. 2018. ‘Cryptocurrencies: Looking beyond the Hype’. In . Bank for International Settlements Basel. https://www.bis.org/publ/arpdf/ar2018e5.htm.
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# Post State Technocracy
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# Post-state Technocracy
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<iframe width="560" height="315" src="https://www.youtube.com/embed/gZ0iCJkM3PU" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
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Rufus Pollock and Stephen Diehl do a deep dive into the Silicon Valley utopian ideas of crypto assets and explore the notion that crypto assets are a means to create a new form of "network state" outside of the existing international order.
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In episode #4 of our ongoing deep dive into web3 and crypto, Rufus Pollock and Stephen Diehl do a deep dive into the Silicon Valley utopian ideas of crypto assets and explore the notion that crypto assets are a means to create a new form of "network state" outside of the existing international order.
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* Youtube: https://www.youtube.com/watch?v=gZ0iCJkM3PU
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* Podcast: https://anchor.fm/life-itself/episodes/On-Web3-and-Post-State-Technocracy-with-Stephen-Diehl--Rufus-Pollock-e1g4cpe
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* Wiki Topic: [Post-state technocracy](../concepts/ideologies/post-state-technocracy.md)
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***
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# Episode Notes
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**Preface**
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## Preface
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1. This week we’re going to start diving into the more utopian visions of crypto and web3. Unlike in the previous interviews where we discussed positions that were largely either monetary or financial reconfiguration (reinstate the gold standard, get rich quick) this time we’ll start engaging with people who really do have a set of political imaginaries about “making the world a better place” as they see it.
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2. Specifically we’re going to engage with the imaginaries laid out by technologists and venture capitalists about a vision that allegedly aims to transition the world from the existing US-led international order to a vision in which blockchain technology and technocracy are the new foundations for global human governance.
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3. This thesis has been put forward in various forms. So far, the most fully articulated form that we have found is from Balaji Srinivasan. We’ll link to the source material in the show notes.
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**Conflict of Interests Disclaimer**
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## Conflict of Interests Disclaimer
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1. It’s hard to disentangle VC narratives from:
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1. Talking their books
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3. First rule of sociology: Whether or not this view is intellectually coherent isn’t so much as important as whether people believe in this worldview as if it were coherent.
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1. Prefigurative politics - the best way to predict the future is to make it.
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**Pro**
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## Pro
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1. These ideas are all based on the overarching conception of the self-sovereignty of cyberspace.
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1. In their words - “A network state is a social network with an agreed-upon leader, an integrated cryptocurrency, a definite purpose, a sense of national consciousness, and a plan to crowdfund physical territory.”
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5. The train of progress only goes one direction, get on or get off. There’s no place for Luddites in the future.
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6. Matt Damon superbowl ad is the soft form of this worldview.
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**Critique**
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## Critique
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1. A philosophy built on a disdain for top-down command and control structures.
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1. A conception that a classless and hierarchy-free world is possible.
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4. Esperanto-style solutionism has never worked for societies or economies.
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5. Anna Neima’s book The Utopians is full of similarly minded people and communities. They usually dissolve or collapse.
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***
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## Concepts Covered
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* [post-state-technocracy](post-state-technocracy.md)
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* [public-goods-problem](../concepts/public-goods-problem.md)
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* [free-rider-problem](../concepts/free-rider-problem.md)
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* [private-money](../concepts/private-money.md)
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* [anarchocapitalism](../concepts/ideologies/anarchocapitalism.md)
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***
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## References
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