luxury journal

Decentralized Finance or DeFi that has been influenced by cryptocurrency and the blockchain as an alternative financial system.

 

The system disrupts the current centralized financial system around central banks and commercial banks . The current system revolves around multiple intermidiaries to facilitate financial transactions. This basically adds middle men in a system where each player recieves a fee for its role in a transaction. DeFi turns this all on its head and removes all middle men in the financial system making it faster, more afforable and democratized.

 

DeFi works with cryptocurrencies and the blockchain to enable peer related financial networks that is global in nature. With commercial banks being one of the institutions falling away, people will use a digital wallet instead of a traditional bank account. A digital wallet is a secure way for individuals to store their money with all information encrypted and stored on the blockchain, and digital money being reflected in the digital wallet. 

 

Financial transactions will be facilitated through decentralized financial applications or dApp's. With dApp's one could access loans via the network and have the system match them with potential individual lenders. This removes the current way of going to a bank and having to go through a long approval process.

 

Decentralized Finance has the potential to revolutionize the way the world functions, but it is going to take time to fully develop. The old rules of the financial system are being rewritten and it will be an exciting time to see how new models improve's the lives of billions of people around the world.

 

decentralized finance

wHat is decentralized finance?

What is Cryptocurrency 

What is Blockchain