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UncategorizedWhat is DeFi? : Why the fading of intermediaries could be the...

What is DeFi? : Why the fading of intermediaries could be the future of the financial world

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During a cryptocurrency market downturn like today, it’s not that investor can’t find a way to make a profit. On the contrary, in the world of digital assets, around the same time the crypto market fell, it turned out to be the golden minute of ‘DeFi’, or decentralized finance. This word is new. Of course, it may never pass many people’s ears. But at the same time, this word is likely to have caught many netizens in recent times. DeFi stands for Decentralized Finance’ Decentralized Finance. There is much software that can help you find out the actual value of bitcoin. If you are interested in bitcoin trading check ethereum classic advantage and disadvantage

What is the distribution centre?

 It may be explained from the birth of ‘Bitcoin’, the world’s first digital currency, which is now known as the gold of the crypto world because its value is based on mutual investor valuation. Bitcoin was created as a digital currency without any ‘intermediary’ of transactions because the creators did not trust the policy director.

When going to a bank, staff will be waiting for deposits and withdrawals. Therefore, the bank here is the intermediary in the transaction. It serves as a service and guarantees the trust of everyone in the property society. Therefore, cryptocurrency transactions are based on the idea that All intermediaries, whether banks, states or policymakers, cannot intervene, authorize, freeze a transaction, or prohibit us from holding the property.

If so, who will verify transactions in the crypto world? The answer is that bitcoin operates on blockchain technology. Technology divides data into blocks and connects them to form a chain. When transactions take place on the blockchain, Transaction data is saved, and a duplicate is shared among everyone on the blockchain, thus being transparent and traceable. However, fraud or alteration of information is complex. In other words, the transaction has the ‘computer’ keeping a code recording every step of the way.

The function of bitcoin is to be an exchange currency.

So what Bitcoin can only do is transfer assets back and forth between people. But in the digital asset world where technology is the heart, investors and developers believe technology will answer the future of global finance. Blockchain’s ‘more advanced technology is known as a ‘smart contract’, a set of computer instructions or programs that can execute by itself once the terms agreed upon before writing are met.

Explain further that assuming Mr A buys property from Mr B on a smart contract, using the standard transfer method, Mr A must check if the money has come in before proceeding with the Transfer of Ownership. But with this technology, the computer verifies that the transaction is confirmed. As a result, ownership will be transferred immediately without any intermediary for transferring, stamping or signing documents. An example of an intelligent contract is ‘Ethereum’. The second most popular after Bitcoin) was created by ‘Vitalik Buterin six years ago. Ethereum is a blockchain technology that allows other developers to use the complex programming space. Alternatively, you can plug in other platforms with Ethereum blockchain to create your business platform. For example, many popular NFT art websites are exciting in this era. It also operates on Ethereum. The exchange is, of course, with Ethereum coins.

And on smart contracts, that’s where DeFi was born.

Many developers say that if they transfer funds without an intermediary, other transactions do not require an intermediary. Whether a loan currency exchange, various guarantees can only happen if we trust each other in the code.

DeFi platforms run on a reliable blockchain-based or executable code (smart contract). Suppose the code indicates that only we, the owner, can deposit and withdraw our funds. It will always be like that. So there is no way the owners of the DeFi platform can steal or withdraw our money. And no need to trust humans. We trust the code.

“On the contrary, if the code of the DeFi platform is intentionally written to steal our money, and we didn’t check it well. Then, we can also lose money. So I define the world of DeFi as ‘Code is law’. Here is a description of Kannithi Thong Thanakul, founder of the Facebook page Kim DeFi Daddy and Bitcoin Addict Thailand, which he wrote in an article by Techsauce.

One business was born because of the world of crypto financial transactions. Need liquidity, a business that is open to crypto holders to deposit money because if you keep it, the value of the tokens remains the same? But if deposited on the platform, when someone borrows or exchanges money (Which has to pay interest or fees already), people who deposit it will eat such interest or fees as well.

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