Decentralized Finances: What you need to know
Imagine having the power to transfer and control your money in seconds without paying fees to a third party.
Currently, when we want to transfer money to someone else or even save it, we first need to have a bank account and pay for the service. Also, it is not safe at all, as banks are often the target of hacking attacks.
The solution for these bank nightmares? DeFi
But before talking about decentralized finance, let’s recap what Web3 and blockchain are and why understanding them is crucial.
Web3 is the idea of a new form of internet service in which all the participants can own a part of the service they’re using and choose what kind of information they want to exchange.
On the other hand, blockchain is the technology that makes Web3 and DeFi happen, allowing people to own digital items with a unique code that cannot be changed or handled by anyone, making this system totally safe. Read this blog if you want to read more about blockchain and Web3.
What is DeFi?
DeFi, or decentralized finances, is a global financial system created for the new internet generation based on blockchain technology. Anyone with an internet connection can access them.
Decentralized financing allows you to access financial services without schedules, third parties, centralized authorities, bureaucracy, official documents, or closed markets. Also, it is free from human errors as they’re run by code and not by people.
Some current financial problems that DeFi solves:
- Leaked personal data
- Lack of documentation
- Limited services due to business hours
- Banks or government blocks from getting paid
- High service use fees
- Slow money transfers due to bureaucracy
A quick comparison
There’s no doubt that the future of the Internet and everything that involves it is here, from marketing to finance and e-commerce won’t be the exception. Are you ready to step into the next new level?
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