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David Hoffman: Ethereum Is the Frontier of Financial Innovation

David Hoffman: Ethereum Is the Frontier of Financial Innovation

Innovation across various global industries seems to be moving at an accelerating pace. This makes sense because innovation in one sector ultimately makes innovation in other sectors cheaper. As innovation becomes cheaper, we can naturally expect it to increase in usage. 

The advances we’ve seen in the world are all underpinned by silicon and computation. Whatever time-saving invention you’ve created is probably better with a chip in it, though finance is seemingly excluded from this hard and fast rule.

David Hoffman is the co-founder of Bankless, a content studio with a newsletter, podcast and YouTube channel focused on education on how to live a life without banks. He will lead a discussion, “Trade Secrets: The ‘Triple Point’ Bull Case for ETH,” at CoinDesk’s invest: ethereum economy on Oct. 14.

Regulatory red tape and walled gardens between financial institutions are potential culprits. But it’s not obvious that removing these obstacles would enable the level of innovation seen in industries that have successfully integrated chips and software.

The reason why innovation in the finance industry seems to move at a snail’s pace is the lack of a developer sandbox for experimentation. There are no startup studios where coders are able to attempt to turn an idea into a product and learn lessons along the way. 

As research and development in finance moves into the developers’ domain, the costs of innovation drops, leading to an innovation explosion. Once the keys to the kingdom are given over to those who code, thousands of global developers will compete to find the best way to supplement an industry. 

This is what Ethereum offers to the world: A place for financial experimentation to mature into consumer products. DeFi, or decentralized finance, is both the place where financial products are tested (often in production), and also refined, finalized

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