I lied

Well, not really, but let's go with that.

A friend of mine from my past, who works at one of the most progressive financial firms out there, sent me this message privately.

I’m especially interested how cryptos and DLT might change payments. Will we see adoption of alternatives to MC and Visa, with much lower transaction fees? And, if so, how does this work for subscription businesses? We currently accept Bitcoin but works as an invoice, rather than automatic billing.

And this made me realize that I still have lots and lots to discuss, even if I am working in the background to create a delightfully fun platform for payment industry experts to show off.

Here is what I wrote off the cuff, and then allow me to elaborate, if you don’t mind.

DeFi will enable pull-style payments on a public blockchain. If ETH2 can keep fees down, that is the next big thing. My favorite thing about DeFi is that, well, it's "De" which means that I can freeze the crypto I hold anyway, and earn nice returns on it, without having to involve a bank or other traditional FI.

The reason that Visa / MC / Discover are worth so much money is that they imply a contract with the merchant.

Merchant: I want my customer to pay me $100.
Card Scheme: Sure, wait 2 weeks for a check to clear. Oh, you don’t want to wait that long? Then I’ll guarantee that payment for the low price of 3% of the total value
Merchant: I have no choice. Oh well, take my money. Assholes.

So, what does DeFi and crypto contracts offer? Let’s try that exchange again.

Merchant: I want my customer to pay me $100.
DeFi: Let’s create a contract right now. You get $100 now, I get $2, and if your customer doesn’t pay, we split the pain. You get $50, I lose $50, and we’re all good. Oh, and we’ll sign that contract in public for everyone to see.
Merchant: Wait, what? How?
DeFi: You are no longer paying for anticipated losses across the entire ecosystem, you are now paying for anticipated losses specific to your business.
Merchant: Still confused, but sign me up!

Um, there’s a lot more to it than this, but this is a start, and it’s my first Crypto post!