Why’s it inefficient at doing it? Proof of Stake chains have low fees and very low energy costs.
Edit: also, it’s a way of borrowing money immediately from others by locking up collateral until you’ve repaid the loan, else at a certain time the collateral is sent to the loaner. It’s a really cool way of decentralising micro loans and removing financial risk to the loaner. For people who don’t have access to credit it’s proving popular with around a billion dollars in loans locked at the moment.
Back in 2018 it was estimated that bitcoin network itself used more energy than Switzerland. In addition to the energy this also translates to global warming.
Anyway you mentioned "If someone can show me a non-blockchain design for decentralised over-collateralised loans then I’ll concede and go back to full skeptic :)"
My question is, why it has to be decentralized and come with that huge cost?
So the blockchain I work on uses significantly less energy than PoW which is what you’re referring too - I agree they’re wasteful. POS doesn’t require the computational effort for blocks so doesn’t require more energy than a small server.
As to the decentralised question: as someone from the UK sure we have loans but these allow you to get them without a credit check and they’re accepted/paid immediately. Someone in a third world country might not have access to the same financial instruments we get to enjoy.
Ah, I think I understand, because of the home + the money I already put in in it?
Why does that have to be decentralized? I already can make a loan against a mortgage and to do it I don't need to use as much of energy to power Switzerland.
I agree that there are cases where blockchain don't have alternatives. Those are where you want a decentralized ledger and you can't trust anyone.
It can accomplish that, but is extremely inefficient doing it, so you really need to decide whether the cost is worth it.