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The paradox of centralized tools doing accounting for decentralized finance

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The paradox of centralized tools doing accounting for decentralized finance

Duration: 00:07:57

Speaker: Lefteris Karapetsas

Type: Breakout

Expertise:

Event: Devcon 5

Date: Oct 2019

This talk is going to be about a paradox that has been prevalent since the early days of Cryptocurrencies. Cryptocurrencies were made to empower the individual, to be their own bank and to enable financial freedom without having to rely on centralized institutions. The paradox lies in the contradiction that when people want to do accounting or analytics for this new financial system they happily turn to centralized tools. This act enforces the status quo of finance being managed by centralized platforms and goes against the spirit of decentralization, undermining everything we are building. The talk will present multiple examples of this paradox in the world around us, from the way people do analytics (Blockfolio e.t.c.), to the way they do tax accounting (Bitcoin Tax e.t.c.). There will be some theorizing on why this is the case and underline why this is bad for the ecosystem and exceptionally dangerous for the people who utilize such services. Finally potential solutions to this problem will be presented, showing how a tool that performs decentralized financial analytics, accounting and tax reporting should look like in order to respect user's privacy and fit in this new era of decentralized finance we are now entering.

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