Cryptocurrency rejects traditional finance which asks for trust in an established system. Instead it promotes “trustlessness”. However, the algorithms that create the conditions for protocol use in decentralized finance (DeFi) are a single source of truth that are subject to centralized control. Where CeFi is based on trust in government DeFi is based on trust in algorithms. Both are centralized sources that limit freedom in one way or another.
Central authorities, whether government or algorithm, are both highly susceptible to power misuse by means of selfish choices by individuals involved in the decision-making process, often for their personal gains, leading to arbitrary implementation and modification of rules. Regardless of whether it is centralized or decentralized, both are at risk from rules framed by self-promoting individuals.
Hire a technology sheriff to protect your assets.
In the case of technology like cryptocurrency, the sheriff is hardware and or software designed to perform the role of overseeing the smooth functioning of the system. Concentrated power in the hands of the sheriff can cause them to become too powerful and limit your choices, which is why it is imperative that the stakeholders of the system retain the power to appoint a new sheriff or change the way the sheriff functions, based on distributed power. This distribution of power is necessary because, while the sheriff may serve you well in the beginning, over time, vested interests by a few in power can corrupt the sheriff, leading to tyrannical exercise of power.
When we use cryptocurrencies, we are hiring a sheriff to protect our property and that sheriff now has varying degrees of control, whether governed by software technologies or a board of people. When making that decision about how to protect your property and freedom, you should choose a sheriff that will try to maximise your liberties.
There have been some notable issues in the past with putting your trust in certain blockchains and DeFi systems. Appointing a software as a sheriff can lead to problems as they will only do what they are programmed to do. Networks can become congested and slow, leading to exorbitant fees. Loss of access to private keys can lead to the tokens being lost forever. An estimated 20% of BTC is assumed to be lost in this manner. There have also been multiple high profile hacks of smart contracts and DeFI systems leading to a loss in value. In these cases the sheriff has been outgunned by superior technology.
There have also been numerous occasions of fiat sheriffs mismanaging their currency. The recent hyperinflation and subsequent adoption of cryptocurrencies in Venezuela is one such example. There are many other examples of countries, over the years, that have shown what government abuse can inflict upon the population.
In the beginning, a sheriff, whether board of governors or algorithmic, may serve you well, however, the sheriff can become tyrannical. Therefore, you will be best served when you retain the ability to hire and fire the sheriff. This ensures the sheriff will always act in your best interest rather than their own personal interest.
Cryptocurrency tries to address users’ concern by positioning itself as an alternative to centralized finance or fiat currency. Creating an either/or case of centralized versus decentralized, requires individuals to make a choice between a red pill or a blue pill, which is not necessarily the best solution.
Unlike other wealth creation platforms, SmartFi positions itself as a far more flexible “purple pill” that allows you to overcome the limitations highlighted above, letting you alternate between a centralized and decentralized system based on your current requirement. This frees you from the clutches of committing to one particular monetary view and being limited in your abilities to do more with your money.
The ability to choose is the ultimate trusted and trustless accountability.
Governance should ideally be about protecting the liberties of its users, voting when necessary to restrict the powers of the sheriff which includes hiring and firing them.
Taking the good of one and the good of the other, best of both worlds, and keep continually improving both systems, the users by their self interests can continually improve their choices. SmartFi is about melding the two of these choices together.
Now with blockchain technology, tracking microeconomic activity based on individual actors and transactions is possible and can form a reliable source of real-time data about the state of the economy. To date, the Natural Rate of Interest, NRI, was thought of as a theoretical concept that cannot be observed or quantified in real-time. However, by capturing and analyzing these microeconomic patterns, it is possible to discover and observe the true value of an economy.
A sheriff is appointed for the very same responsibilities of governance, but on a more local level. The individual citizens collectively delegate to the sheriff their fundamental right to protect themselves, which they themselves have the power to exercise and nothing more.
The lowest level or the smallest unit which can handle the task effectively is the one that needs to be delegated with the powers to do so. This ensures that the governance is guided by the people, and the decisions taken are closest to their interest.
SmartFi follows a similar policy of people-first governance. Governance on the platform is the result of the collective decisions taken by distributed stakeholder in the system. This sort of a set-up helps the system to progress in the right direction, taking every stakeholder along in its growth trajectory.
With SmartFi, you will always have the ability to fire the old sheriff and hire a new one. Their systems are built with that choice in mind. When a newer, better technology comes along, it will be adopted and adapted to meet their ideology of choice and freedom.
Sign up on SmartFi today, and start your wealth creation journey.