One of the more recent informatics-related innovations in recent years has been what is called “decentralized finance”, or DeFi in the realm of cryptocurrency. It’s an interesting and tantalizing form of investment (or, more accurately, speculation) for crypto owners and has gained a lot of attention in the last year due to some of the potential payoffs – and also due to some incidents of crypto theft and crypto crashes connected to DeFi.

In it’s simplest form, DeFi can be compared to traditional banking and finance in that crypto owners can “deposit” their coins (Bitcoin, Ethereum, and numerous other coins, depending on the DeFi platform) and the DeFi service lends the coins out to borrowers. The coin owners earn interest – usually at much higher rates than what traditional banks offer.

The increased payoff carries higher risks, however. For one thing, the technology itself is subject to security risks which makes theft from hackers a real possibility. Another risk is inherent with the nature of crypto itself – the dramatic swings in Bitcoin’s price this year alone have shown that. A final risk is that unlike traditional banking with the US dollar, crypto DeFi platforms have no oversight from government or regulatory bodies – so investors could lost it all with no recourse.

None of that has stopped widespread adoption, however: DeFi has become widespread and is probably the most-discussed development in the worlds of finance and crypto in the last year.

I first learned about DeFi from an article on the financial website ZeroHedge, and soon learned more about it from crypto sites like CoinDesk. Since I’m interested in new uses for crypto, and willing to take some risk (and increase my holdings!) I tried out some of the more popular DeFi platforms.

I would consider myself to be somewhere between an “early adopter” and part of the “early majority”; I didn’t know about DeFi when it first began, but jumped on it as soon as it became talked about in mainstream publications (ZeroHedge aggregates articles from sources like Forbes, Fast Company, Fortune, etc.).

I’m definitely past the stage of implementation and well into the Confirmation/Continuation stage. I’ve parked a significant amount of crypto in a few different platforms. Most of these appear to be well-established and trustworthy. One of these is questionable, and I put a much smaller amount of crypto into my account on their platform. Even if that platform performed a “rug pull” or if I lose my investment, I’ve decided that DeFi is something I’ll continue to be involved in. My DeFi holding have both rewarded me and been interesting – so I have no reason to quit now.

There have been other aspects of the world of crypto that didn’t hold my interest for as long, or in the same way. As one example, I’ve tried crypto mining on a few occasions. I went as far as to build a three crypto mining computers and mined crypto for almost the whole year of 2015. It didn’t pay off at the time because I was barely breaking even with the cost of electricity. So I sold my mining equipment.

In late 2017 I got interested in crypto mining again – and built a couple of new mining computers. The hassle, the electricity costs, and the heat generated from the computers didn’t seem worth it to me. Unfortunately, I sold all my equipment again. (After I got out of mining, prices dramatically increased. Of course.) With crypto mining, I made it to the stage of “Implementation” – but no further.

The lesson I learned from this is to be patient, and stick with what you’re doing long-term. With DeFi, I decided to just leave my crypto in the accounts and let it grow from interest. Hopefully, my decision pays off one day.