A quick summary to respect your time:
Wall Street is built on very old technology and rules that are opaque
Decentralised financial systems are being built on top of Ethereum (DeFi)
The open source operating system movement teaches us a lot about how the open source financial system might evolve
I have been involved in fintech, crypto, Ethereum and DeFi for a decade. These are my quick takes on the last few days of craziness and what it means moving forward.
The last 72 hours have totally changed the trajectory of finance. We have watched what happens when the people rise up and try to stick it to the powers that be. If you want to catch up on what happened, I recommend this thread:
You can feel the seething rage on Twitter. The biggest names in startups, politics and the media are expressing their utter disdain at what is going on.
People are being blocked from trading stocks because a bunch of billionaires and hedge funds are getting crushed. America, the land of the free, is censoring its citizens and preventing them from exercising their right to engage in capitalism.
The trading infrastructure that powers the markets is simply melting under demand. Beneath the slick interfaces of the smoothest fintech apps is an absolute rats’ nest of closed source code written in ancient programming languages.
Everyone in the world is seeing what happens when the Internet collides with finance. People are organising together to do research, explore new investments, and chase returns in a low-yield world. The old guard hate seeing regular people get ahead. A huge clash is going down and the incumbents are trying to change the rules.
The last few days are going to be studied for the next few years. I just wanted to quickly tap out some thoughts on why I think decentralised financial infrastructure offers a pathway for people to exit the current rigged system.
Why Open Source Financial Systems Are The Future
Permissionless, open source, and globally available financial services are going to show the world what is possible when you allow anyone to write software that moves money.
We have seen what happens when anyone can create a website on the Internet. You get billions of new pages and trillions of dollars of new capital created.
We are about to see what happens when anyone can create a financial service on the Internet. This is the direction I have been focused on since early 2018:
All over the world there is a community of creators who are making incredible new financial services that are available to absolutely anyone with an internet connection.
They publish smart contracts to Ethereum that interact with one another in fascinating new ways. It is a global movement that is too large and based in too many countries to be totally stamped out. It is a peaceful upgrade of the closed source financial system.
Financial Revolution Operating System
My favourite documentary of all time is called Revolution OS. It tells the tale of how a rag-tag group of engineers challenged Microsoft with the Linux operating system. You can watch the full version here for free—it is just under 90 minutes.
Over time, Linux lost to Microsoft on the desktop because they had too much distribution power. However, it found project-market fit with the Apache Web Server. Developers around the world could stand up a website at minimal cost and the open internet exploded.
Open source operating systems power pretty much everything we use today. They are woven into the backbone of the internet and the forefront of Android phones. It all began because a bunch of people got together and s aid: What would happen if code was free for everyone to use?
The Ethereum community feels a lot like Linux in the early days. There are lots of passionate people with very big dreams about how they can impact society. The DeFi community is asking a simple question: What would happen if money was free and forkable for all?
How can I get involved?
I think everyone who subscribes to this email newsletter should download a wallet and start playing around with some small amounts of money.
I strongly recommend Argent, a DeFi-focused mobile Ethereum wallet:
Here is a link to skip the queue: argent.link/GrafLaAVzW
Once you have moved some funds into the wallet, try out a few of the DeFi services that are neatly embedded into the product. This is the beginning of your journey down the rabbit hole.
We are going from the billions to the trillions in the next few years.
Will you be a part of it?