Derivatives provide useful abstractions over primitive financial data types. Instead of saying "give me the {id: int, name: string, birthday: date}" we can just say "give me the User" and that's helpful. But as in software, it's possible to build towers of abstraction high enough so as to lose sight of the fundamental data upon which they rest, and then differences between the abstraction and implementation open the door for bugs (i.e. financial crises).
Options are similar to a down payment, or trip cancellation insurance. It gives you the ability to buy something (or not buy it) in the future, but for that privilege you must pay something right now. Options provide leverage (using more money than you presently have), like a credit card or mortgage. Just as most people can't bring piles of cash to buy a car or house outright, options give you the ability to buy the thing but also the chance to walk away. Key caveat: there situations where options that have unlimited risk; these can easily be avoided, but that's where options get their bad reputation.
You're right that both can serve to accelerate growth, and that's a good thing for individuals, companies, and nations. But if things go wrong, crashes at high speeds are much more dangerous than those at low speeds.
Options are similar to a down payment, or trip cancellation insurance. It gives you the ability to buy something (or not buy it) in the future, but for that privilege you must pay something right now. Options provide leverage (using more money than you presently have), like a credit card or mortgage. Just as most people can't bring piles of cash to buy a car or house outright, options give you the ability to buy the thing but also the chance to walk away. Key caveat: there situations where options that have unlimited risk; these can easily be avoided, but that's where options get their bad reputation.
You're right that both can serve to accelerate growth, and that's a good thing for individuals, companies, and nations. But if things go wrong, crashes at high speeds are much more dangerous than those at low speeds.