Like cryptocurrencies Bitcoin (CRYPTO: BTC) and ether (CRYPTO: ETH) Prices have risen dramatically and have received a lot of attention in recent years. However, the real game changer could be the underlying blockchain technology. In this Fool Live video clip recorded on March 18thGemini Cryptocurrency Exchange co-founder Cameron Winklevoss explains to The Motley Fool’s Anand Chokkavelu why decentralized finance is such an important innovation.
Anand Chokkavelu: What is something in the blockchain / crypto universe that most people cannot even imagine today, but that will take for granted five years from now?
Cameron Winklevoss: I think one of the most interesting developments was decentralized funding. That has really had a boon in the last year, where people are building projects that don’t have a permit, where you can borrow and borrow money. You can act. You can just show up to these smart contracts and send in your collateral and conduct transactions. You do not need permission to do this.
It’s really about redesigning large parts of the financial system decentralized and without permission, which is very exciting and everything builds on Ethereum. I think the next question a lot of people would have would be, “How do I invest in this wave?” The simplest answer is that you can invest directly in projects, but then you have to pick the winners, so to speak.
If you basically think of Ethereum as that decentralized computer and Ethereum is like Manhattan and buying ether is like buying land and these projects are like skyscrapers. If you own the land while the people are building on it, you are building these skyscrapers that add value to you as a property owner. Truly the DeFi weighted index which in my opinion is one of the most important limits being built in crypto today. You can just buy Ethereum, and then you have a pro-rated stake in that piece of land that all of these good things are built on.
Much of that value falls to the Aether Holders, as these projects require you to use Aether in order to use them. So they are ether eater and create demand. What we have told people and this is not financial advice either, I just want to say that. Lots of people come up to us and say, “Hey, how should I enter crypto?” We believe that Bitcoin is the entry point, it is the store of value, it is the oldest, it is the most liquid, it has the largest market capitalization.
We have been there in person for almost nine years. Bitcoin is really the starting point, but Ethereum is a place where having chips on the board makes a lot of sense. Whether this is a 70-30 breakdown between Bitcoin or Ethereum or 60-40, 50-50 is a personal choice. I think we discussed that with people asking how do I approach this space. Because Ethereum indexes so much of this amazing activity that is going on right now, and then Bitcoin is the digital gold. I think if you look at the performance, Bitcoin is incredibly good and Ethereum is good too. I think individuals would be well advised to look at these two projects.
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