Crypto without decentralization is just ‘reinventing the same wheel’: Jim Bianco

Bianco Research President Jim Bianco sits down with Yahoo Finance Live's Jared Blikre to discuss how decentralized finance investors are preparing for periods of volatility in 2022 and the importance of innovation in crypto.

Video Transcript

ZACK GUZMAN: And Jared, I mean, as we're kind of celebrating the first IPO here in 2022, I know that you also had the first "Yahoo Finance Plus" webinar of 2022, so history being made for the year on both fronts. And you chatted with a very special guest. Tell me what you learned there.

JARED BLIKRE: Yeah. I talked with Jim Bianco for 45, actually 49 minutes yesterday. We went over-- we were talking about DeFi, decentralized finance. That was the focus of the webinar. And we were talking specifically about the regulatory regime and whether or not it can truly be decentralized, given the fact that Gary Gensler and the SEC basically told Coinbase to their face that if they wanted to offer interest on their accounts, a big DeFi proposition here, they're going to have to register securities. So here's the clip.

JIM BIANCO: And it's gotten us into a philosophical debate about, if we don't get to decentralization, are we really going to invent anything new? We're just going to invent a digital version of the same thing that we have right now. And we're not going to have that promise that DeFi and decentralization brings.

So I agree with you that we're not quite there on decentralization. There's some hope in the Ethereum network that we're going to get there through the merge into proof of stake, which should come in the first half of this year, and then maybe move on towards some other improvements to help increase throughput to lower transaction costs, like sharding is the word that they phrase with it.

And if we get there, we can see both decentralization and this hope that we have a new system. Otherwise, we're just reinventing the same wheel.

JARED BLIKRE: Yeah. And that's kind of the crux of what we're talking about here. I don't have anything to add to that. So I'm just going to send it back to you guys.


I mean, there's a lot of things in the crypto space that could be classified as reinventing the same wheel. But I guess the upside still large when it comes to some of these things and some of the yields that--

JARED BLIKRE: Yeah, I'll just say, we covered a lot of territory. If you are new to DeFi, wondering what it is, check it out. I'm posting on Twitter within a few minutes here. We got into the weeds a little bit, but really great overview by Jim Bianco.

ZACK GUZMAN: All right, Jared Blikre, the latest. Appreciate that.