Technology has been advancing at such an exponential rate that there is something new being invented or introduced to society every other day. Plus, it has been integrated into every major industry. Currently, the use of technology is quite prevalent in the financial industry. We can transfer and receive money by just accessing our accounts through any electronic device.
But, it seems that technology doesn’t stop there. The current trending topic happens to be blockchain, cryptocurrency and NFTs. These are just a few of the rising fields that relate to the finance industry.
However, in order to understand DeFi, we need to grasp the concept of blockchain. Essentially, blockchain technology is a database that is shared within a certain computer network. It stores data in a digital format, and secures it forever. The main feature of blockchains is that it cannot be altered or hacked, and it does not need a third-party surveillance such as the government.
Now, how does DeFi come into all this? Well, DeFi is short for decentralized finance. Long story, short, it refers to the part of blockchain applications that allows peer-to-peer options for conventional institutions and financial services. Since it is an application of blockchain technology, it does not have third-party involvement either.
Here are the few benefits of DeFi that might be able to educate you on its attractiveness.
DeFi needs no permission
Decentralized finance allows people to make transactions without the permissions of banks, institutions or corporations. Ultimately, this makes dealings and collaborations easier between two individuals, since there is no third-party involvement. Blockchain technology is fully capable of carrying out the same duties banks and institutions do. They can keep data, provide server space and oversight transactions just as well. So, your finances will be available to you at all times. You wouldn’t need to seek permission from any other party to use it in any way.
DeFi is immune
As previously mentioned, blockchain has been developed in such a way that it is incredibly secure. It cannot be altered, hacked or changed so easily. The technology is able to record any additions made to it, so it is like a big history book that writes itself. So, when you carry out a transaction, it will be secure and safe.
DeFi is more efficient
A feature of DeFi, such as peer-to-peer alternatives, allows things to run smoother and faster. For instance, it encourages lending and borrowing between the two parties because it can be carried out without a centralized institution. You would not need to worry about DeFi verifying the transaction because both parties have been assured to be reliable and secure.
These are just a few of the many benefits of DeFi. If you intend on finding out more on DeF, you should carry out more in-depth research on it. However, if you think that you are ready to get into the game of blockchain, check out DeFi platform Malaysia.