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Crypto is going crazy | servant.

Most people have probably heard of Bitcoin and Ethereum by now (which have been lugging for years), but 2021 was the year of DeFi — or decentralized finance.

DeFi has no formal definition, but usually involves using the blockchain to borrow and lend using auction markets. The opportunity to make some money comes in part because the blockchain eliminates the need for traditional financial intermediaries, with their fees and associated regulations.

according to vice, a common feature of many DeFi tokens is that they blatantly promise investors huge returns. They often rely on complex schemes in an effort to inflate their value. For example, SafeMoon, a DeFi token promoted by popular influencers, taxes sellers and distributes a portion to holders. In the past year, people have gained a lot and then lost everything as cryptocurrencies went viral and then crashed.

But that doesn’t stop anyone from trying to get rich – creating their own coins or stealing the money outright. according to CipherTrace’s May 2021 Crypto Crime Report, $156 million has been stolen through DeFi-related hacks so far in 2021.

And as much as the potential excites some people, the infamous volatility scares others. Just look at Elon Musk’s tweets about cryptocurrency, which often make prices rise or fall. On Sunday, bitcoin saw a boost after announcing that Tesla would resume bitcoin transactions once it confirms that there is a reasonable use of clean energy by miners.

Billionaire investor Mark Cuban acknowledges the risks and that there are technicalities to figure out with all this technology, but still says “this approach is the future of personal banking.” In a blog post earlier this week he said that “banks should be scared”.

However, Dutch economic officials have predicted the “ultimate collapse of the crypto bubble”. They have urged the government ban bitcoin and other cryptocurrencies straight away.

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