Bitcoin is just the beginning – why DeFi crypto is here to stay

DeFi stands for decentralised finance. It’s the central concept underlying Bitcoin and other cryptocurrencies.

It represents a dramatic shift from the way we’ve always handled money.

Traditional financial systems rely on payment processors, banks, and ultimately the government to administrate and regulate all financial transactions. DeFi takes power from institutions and instead relies on blockchain technology.

Blockchain technology provides the technical workings for cryptocurrencies. Instead of relying on a central authority, like a bank, to administer and record transactions, blockchain technology uses a public ledger.

The public ledger is a system in which transactions are verified not by a central authority but by the participants of the blockchain. Nobody has central power over transactions or balances.

Bitcoin is the beginning – but by no means the end

Bitcoin is, without a doubt, the most notable example of DeFi crypto today.

It was the first player in the market and is continuing today stronger than ever. For many people, Bitcoin is more of an investment product than an actual currency.

The staggering rises and falls in Bitcoin’s value have given many investors massive profits. While Bitcoin is unrivaled today, there are many competing coins offering new innovations.

The most prominent competitor is Ethereum, a cryptocurrency that has inspired many offshoots and alternative uses of its blockchain technology.

As Ethereum continues development, many believe that it could supplant Bitcoin with its more advanced features.

Decentralised applications make heavy use of the Ethereum network, and congestion at certain times can cause increased fees. Ethereum is currently moving towards solutions to these problems that could cement it as the dominant DeFi cryptocurrency.

What problems does DeFi cryptocurrency solve today?

The reason that decentralised finance is advancing at such a rapid rate is simple. It provides practical solutions to real problems.

Centralised control by financial institutions is one of those problems. With a traditional centralised institution, somebody has control over transactions and balances.

When you put your money in the bank, the bank has your money. Ideally, they will act honestly and in your best interest all of the time. In practice, this isn’t always the case.

With centralised control of currencies also comes government control.

The government of a country can print more money at any time. This leads to inflation, devaluing current funds.

In some cases, governments devaluing their currency can cause hyperinflation. This is disastrous, wiping out savings and catalyzing numerous other social problems.

With DeFi crypto, the government cannot simply decide to increase the money supply.

Centralised finance also gives both institutions and governments the ability to impose restrictions on citizens at will.

The government or your bank can freeze or even remove your assets. These methods are supposed to be for stopping criminals, seeing wide use against terrorist organizations.

However, some countries use these tools politically, defunding activists and protestors.

There is also a reliance on official payment channels with centralized finance. Even if the bank has not frozen your funds, payment processors reserve the right to deny services to people or ventures they do not support.

People can find themselves without any way to conduct business at the whim of the companies controlling payments, without any means of recourse.

Some companies such as the Immediate Edge software take advantage of these new payment systems and try to lure innocent victims into investing.

DeFi crypto solves all of these problems by removing centralised authority from the equation.

Using Bitcoin or other cryptocurrencies, there is no method to freeze or seize funds. Transactions are carried out through the blockchain, so there is no way to refuse payments to or from a certain person.

Where is DeFi Crypto Headed in the Future?

DeFi crypto certainly seems to be the future of finance.

Removing the limitations of centralised finance, like offering services 24/7 with no restrictions, already gives it a significant advantage.

But the main reason to be hopeful for the future is the continued innovation in decentralised finance.

There are ongoing projects across many areas that could provide more services through DeFi in the future.

Many efforts are going into providing accessible platforms to make blockchain technology more accessible to developers.

There are also numerous projects trying to bring more complex financial services to decentralized finance.

In the future, DeFi could provide loans and integrate interest rates within cryptocurrency frameworks. More than simply allowing more convenient transactions, decentralised finance could someday provide any and all financial services.

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Peter Williams
Peter Williams
7 May 2021 3:20 pm

As I understand the Blockchain effectively pays for people to enable it to happen so Blockchain related activities get charged. Moving to & from bitcoin, for example, appears to cost 2-3%

Siaw Benjamin
Siaw Benjamin
26 April 2021 6:36 pm


Siaw Benjamin
Siaw Benjamin
26 April 2021 6:35 pm

I have join

26 April 2021 11:43 am

Whilst you mention. In great detail bitcoin and ethereum it is notable to mention the “gas fees associated with ethereum. There are so many ways to earn a yield it a stake and in this fast moving asset class new opportunitys are always appearing. We are now seeing deflationary tokens that automatically give a yield whilst holding. The xrp currency is soon to take ethereum place. Also flare finance will launch soon and that wil be based on xrp and is going to give excellent opportunitys. If your new, find out about your tokens, do your own research and remember a token needs utility to be really successful

Denis Owens
Denis Owens
25 April 2021 1:32 pm

Crypto is the future, government throughout the world have got international finance in such a awful mess, it is wobbling right now, it is my personal opinion is that ultimately, cryptocurrencies will replace traditional ways of doing financial transactions.
Governments are now realising the benefits of Crypto and are creating their own, China leading the field, however, investors beware, jumping from the frying pan into the fire comes to mind. China’s crypto will be strictly controlled by the government, being able to literally control everyone who holds their crypto. Like a puppet on a string.
This is not what Cryptocurrency is all about, the Blockchain gives you total freedom, constant access to your money at any time, yes it is a volatile market place, but it’s all good fun.

Reply to  Michael Adelugba
25 April 2021 1:20 pm

Again use duckduckgo to search for info, never give out your wallet keys and invest wisely and you too could become richer from it, I’m also new to the world of crypto, Google tends to censor info that it doesn’t want or think you should be seeing, duckduckgo does not, have fun

Reply to  Michael Adelugba
25 April 2021 12:50 pm

Go to 99Bitcoins. You can take a crash course for free.

Hassan ahmxd
Hassan ahmxd
Reply to  Michael Adelugba
25 April 2021 8:33 am

Dude wat I have heard is all crackdown beginning n profit is getting older, me either new one on it

Dr. A S Johan
Dr. A S Johan
25 April 2021 1:19 am

Great well written article. Keep it up.
Dr. A S Johan
Creator – CryptRight

24 April 2021 8:59 pm

I love this but there’s one coin that is call TBC and is only coin that growth by number of people not by market value
What are will going to do with such coin

Simon white
Simon white
Reply to  Michael Adelugba
24 April 2021 10:59 am

Search “Trader University” on youtube, a chap called Mathew Kratter has been the most knowledge I’ve found on all things crypto, centralised finances and macro economics. Highly recommend.

E Agobah
E Agobah
Reply to  Michael Adelugba
22 April 2021 5:00 pm

Jump on Twitter, go on youtube, do not hand money to anyone and also not your personal crypto keys.

Michael Adelugba
Michael Adelugba
22 April 2021 11:07 am

I am a novice to Cryptocurrency, I am willing to learn as much as I can have.
Who is there to mentor me. Please.

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