Both gold and crypto have wildly different profiles than cash in a high interest savings account, so much so that suggesting them as a plug in alternative is at best disingenuous.
Not that that's always way you want! But most people need some sort of emergency fund, and very few things are liquid enough and stable enough to meet this need well. Laddered CD's, etc. can work but are fiddly. Cash accounts are king here for a reason.
On the long term investment side: sure cash accounts are a bad idea. On the other hand, the idea that the stock market is "gambling" but defi lending isn't is - idiosyncratic.
Wait a second. I'm only providing examples to better the discussion and now you're calling me disingenuous. I'm not shilling anything. Nor am I saying anything isn't without risk. Putting words into my mouth isn't cool either.
I'm saying you responded to someone explicitly talking about "emergency funds" with examples presented as if they have similar profiles (to savings account) for that use, and they simply don't.
I'll accept "disingenuous" was perhaps premature, apologies - you could also just be confused.
Both gold and crypto are poor vehicles for original commenter's need.
My comment about defi was just because you characterized the stock market as "gambling" (somewhat unfair, but certainly can be), but for somehow failed to annotate defi as an alternative that is "even more so gambling"...
> Both gold and crypto are poor vehicles for original commenter's need.
Why is gold a poor vehicle?
> My comment about defi was just because you characterized the stock market as "gambling"
If humans could predict the future, we wouldn't have gambling. That's what makes the stock market a gamble. Can you offset that with derivatives, like options? Sure! That said, you're showing your naivety around DeFi with your response. Lending/borrowing isn't a gamble beyond the underling risks involved.
Physical gold is too usually too illiquid. Digital gold solves that, but in general the short term volatility makes it imprudent for emergency funds.
> Lending/borrowing isn't a gamble beyond the underling risks involved.
This is called burying the lede, I believe. The underlying risks include significant structural risk on the institutions and vehicles themselves, not comparable at all to conventional banking.
NB: I was never suggesting stock market for emergency funds either. Investing is investing, and involves risks. If you want a useful distinction between investing and gambling, you would have both represented in stock market. I would suggest a more nuanced view would at least try to separate the two as useful concepts.
> Digital gold solves that, but in general the short term volatility makes it imprudent for emergency funds.
It depends on what you define as an emergency fund. If your view is that the macro economy (especially in the US) is not going well (heading into an inflation emergency), having divested into something other than dollars is the correct play here.
> not comparable at all to conventional banking
That's the point though. At least for me, I've long ago lost faith in conventional banking (aka: tradfi). This is why I put the time and effort into deep learning about DeFi.
Today, DeFi is relatively tiny and cannot support the larger asset markets. My hope is that it grows. As someone who found the internet in 1991 and watched and participated in that early growth, I don't see a reason why it can't happen again for something like DeFi.
Ignore the 'crypto scam' aspect of it all. There is a lot of positive things in 'being your own bank'. Early adopters of this risk are definitely reaping windfalls from it. Making a more general statement and not pointed at you directly, it is easy to sit on HN and shit on crypto and much harder to spend time listening to what some latchkey is trying to gently guide you towards, without being a shill.
All I'm saying is any discussion including it has to realistic that it is fundamentally a risky at current time. Will it outgrow that? We'll see.
> It depends on what you define as an emergency fund. If your view is
Now this is just moving goalposts, why do that? Everyone was talking about emergency funds in the usual sense. Introducing hedging against the USD based economy is at best a distraction (even if that's what you personally want to talk about) and counterproductive.
Not that that's always way you want! But most people need some sort of emergency fund, and very few things are liquid enough and stable enough to meet this need well. Laddered CD's, etc. can work but are fiddly. Cash accounts are king here for a reason.
On the long term investment side: sure cash accounts are a bad idea. On the other hand, the idea that the stock market is "gambling" but defi lending isn't is - idiosyncratic.