Why Crypto? - Review of Pragmatic Monkey's Presentation

In today’s episode, I reflect on Kujira Academy’s call with Pragmatic Monkey (PM), a key member of the Kujira community who, after spending many years working as an investment banker, made the decision to work full time in decentralized finance (DeFi).

I provide a brief overview of PM’s background and journey through the world of Web3, before diving into the main question this call looked to address – ‘Why Crypto?’.

Let’s get started.

TL; DR: Through PM’s journey from investment banking to DeFi, he has increasingly become aware that the traditional finance game is rigged to the benefit of the elite institutions, while cryptocurrency offers a solution where all participants are exposed to the value which is added by the community.

His Story

PM started trading crypto in 2016 as a result of the restrictions imposed by Credit Suisse on employees. Surprisingly, it was one of the few asset classes that did not require transactional approval.

Having observed the unrealized potential of this new technology, he made it his mission to find out more, and it was this decision that would change his career, his perspective and ultimately, his life.

Over the following years PM dived head first into the world of Web3, quickly recognizing the solution DeFi offered to a faltering traditional banking system, designed to concentrate wealth amongst the already rich.

This realization was actualized in 2020, when PM worked up the courage to quit his job as an investment banker and pursue a career in Decentralized Finance. Since then, he has been providing consistent, enlightening, and opinionated insight through his essays and his involvement in the Kujira ecosystem.

Now that we have a bit of context, it’s time to tackle the big question. However, before we do that, it is first necessary to define the problem.

The Problem

PM was blunt when it came to his critique of the traditional financial system. He argued that in the traditional workforce, employees are paid just enough to prevent them from leaving, with little chance to share in the profits they help generate. This system, according to PM, leads to a misalignment between shareholders/stakeholders (c-suite execs), and other value creators (lower-level employees and customers), resulting in an unfair distribution of wealth.

When discussing who controls the money in our current system, he described a dystopian cycle where central banks, influenced by powerful lobbyists, control the money supply, leading to a hidden tax on the public via inflation.

He also highlighted how most traditional loans are undercollateralized by assets (real estate, stocks, etc.) and these loans are then taken to invest in more assets. This “infinite loop of leverage” inflates asset prices, creating a system that benefits those who already hold assets and makes these assets more inaccessible to those without.

Undercollateralized loans also open the financial system to vulnerabilities when borrowers are unable to pay back their loan. This ties in directly with GHOST’s overcollateralized loan system which addresses this issue.

Broadening the focus to technology, PM lamented the current state where users are the product, and personal data is a commodity sold to the highest bidder. He criticized the lack of compensation for users whose data fuels the profits of tech giants.

Despite stating all these problems, PM firmly believed there existed a solution, with the potential to radically change the banking system as we know it, and change the distribution of wealth in perpetuity. What was this, you ask?

Let’s find out together.

The Solution

Here, PM’s tone shifted from critical to hopeful as he introduced crypto as a decentralized alternative to the status quo.

Explaining the basics of blockchain and consensus mechanisms, he emphasized the revolutionary potential of replacing intermediaries with decentralized protocols, painting a picture of a future where the parties involved are stakeholders and shareholders who directly benefit from the success of a decentralized protocol.

PM then took us on a journey through the history of the internet, from static web pages to the interactive Web 2.0, and finally to the decentralized ownership promise of Web 3.0. He argued that Web 3.0, with its decentralized consensus mechanisms, represents a revolution in ownership and governance, leading to a more equitable distribution of value and power.

Following this, he discussed the potential of Decentralized Autonomous Organizations (DAOs) to democratize governance and safeguard against the centralization of power, highlighting the importance of open-source coding in promoting transparency and reducing corruption.

Finally, PM concluded by imagining a future where individuals have the freedom to work on projects of their choice, contributing value and being compensated fairly via the appreciation of the project’s token. A fair, equitable banking system, accessible to all.

Not bad, right?

Final Thoughts

To conclude this article, I’ll end with this.

Pragmatic Monkey’s talk was not just a critique of the existing financial and technological systems but a call to action. He urged the audience to recognize the potential of crypto and blockchain to create a more equitable and decentralized world. His passion was palpable, and his message was clear: the future is decentralized, and we have the power to shape it.

For those of you interested in Kujira, or the future of finance and technology, PM’s insights offer a valuable perspective on the challenges and opportunities that lie ahead.

As we navigate this rapidly evolving landscape, let’s keep the conversation going and work towards a future where the game is no longer rigged, but fair and open to all.

Useful Links

Kujira Academy is a platform that aims to bridge the gap between young entrepreneurs and Web3, providing them with tangible education and career acceleration opportunities. Built by students, for students. Learn more about the academy and our vision here.

To register your interest and become a student of Kujira Academy, click here.

Written by LiuCobe