Crypto has a chance to upgrade the legacy financial system

If Bitcoin (BTC) was born in response to the systemic failures laid bare by one global financial crisis, then the subsequent rise of various decentralized networks can be seen as differences in opinion on the best way forward. All are in agreement that the existing financial system is broken, but are slightly at odds in terms of how to fix it. In a sense, each of these networks represents a new, if partial, vision of what could make for a better system.

For instance, we’ve seen Celo leverage cryptographic tools and mobile phones to put financial instruments into the hands of the world’s unbanked. We’ve seen Compound reduce friction in financial markets, replacing it with speed, efficiency and openness. And we’ve seen MakerDAO manage to keep something of a stable peg by way of incentives rather than physical backing. In a way, each new project represents a new and different take on what the financial system can be — or even what it should be.

Despite their differences, many of these networks share the ethos of decentralization as a foundational principle. According to the theses effectively posited by these networks, finance doesn’t need to be mediated by an oligopoly of entrenched interests and industry gatekeepers. Instead, a better system allows for broad participation, bringing the ideals of open source and decentralization to a new, more fair and more equitable market structure.

As early builders of, and participants in, this new system, we have a real shot at creating something wholly better than what has come before. But, as money and influence continue to pour into the digital asset space, the challenge becomes avoiding the centralizing tendencies that have characterized traditional finance since its inception.

How do we avoid simply recreating a new version of the same old system? The answer is part learning from the past, and part joining with and supporting the projects and teams who are truly building the financial future today.

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