Decentralized Finance: Emerging Frontiers | Author: Abiodun Ajayi | The Capital | September 2021


Bank vault with safe

What is decentralized finance and why do you need it? The promise of cryptocurrency is to make money and payments available to anyone, no matter where they are.this Decentralized finance (DeFi) or the Open Finance Movement takes this promise a step further.

Decentralized finance aims to make financial services available to anyone in the world who has a smartphone and Internet connection. French poet and novelist Victor Hugo once said: “There is nothing in the world…not all armies…as powerful as ideas that an era has come.” Can this be said to be about cryptocurrency?

“There is nothing else in the world…not all armies…as powerful as an idea when the time is right.”-Victor Hugo

Since the beginning of the industrial era of finance, the banking system has been dependent on institutions. This is most obvious in developed markets.

Financial institutions, law firms, and regulatory agencies are the basic “layer of trust.” This structure is necessary to prevent systemic risks. To support this system, all aspects of financial services have intermediaries. We have payment service providers, third-party administrators, trade clearing houses, brokers, etc.

Canary Wharf at dusk

The intermediaries in the traditional financial industry are strong. They include investment bankers, stock brokers, etc. They will not surrender without a fight. They know what will happen. They know that cryptocurrency can cause major damage to the financial ecosystem. They will do their best through lobbying, supervision or any possible means. Even if it means spending more time.

Nonetheless, encryption enthusiasts realize that some companies tend to dig unnecessary and often interfere with their personal affairs. This is no different from tracking cookies over the Internet. When it comes to financial information, we need to draw a line.

When you don’t know the normal use (purpose) of a thing, you abuse it. Abuse stems from the abnormal use of words. In other words, when you don’t know why something exists, you abuse it because it is not used or consumed in the way it was designed or created.

If cryptocurrency is to disrupt the status quo, we must agree that the transaction is public, not for criminals. Regulators need to protect people’s privacy. Today, banks protect privacy to a certain extent by making transactions invisible to third parties. The same applies to blockchain.

The reason why transactions on the blockchain are attractive is that the block changes transparency. This is both a blessing and a curse. Without transparency, blockchain may lose its value proposition because transaction tracking brings many benefits, such as voting, transportation, payment, tracking, and order tracking.

In a sense, the names and locations of individuals are not tracked, but their clothes, and the funds held can be tracked, which is anonymous to a certain extent. Blockchain intelligence succeeds by considering other factors to associate addresses with real-world identities. These include links to identification methods and other functions.

From this perspective, the hope of obtaining a perfect system suitable for national and international needs in a secure blockchain seems out of reach.

Bitcoin is the best money in the world: it is the people’s money supported by the people. Bitcoin allows you to regain the power to control money, which has a huge impact on your life. Thanks to Bitcoin, you can live your own way.

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Blockchain is an obstacle to ransomware.The most important reason is Blockchain solution It is decentralized, which means there will be no duplication of any information that might be ransomed. Knowledge can be accessed securely from various privileged clients.

In addition, the blockchain is immutable. When information is written to the blockchain, no one, even system administrators, can change it. This also ensures the advantage for audit purposes.

As the data provider, your information has not been changed, and as the receiver, you can ensure that the information has not been changed.

Blockchain utilizes sequential hashing-transaction blocks are linked with the help of hashing to create a specified historical past, evaluating and ensuring the integrity of the chain every 10 minutes.

Together with knowledge encryption, it is almost impossible for anyone to unilaterally change the information on the ledger without being immediately noticed. Therefore, companies dealing with sensitive expertise can ensure the integrity of the data.

Therefore, even if Bitcoin payments are currently being used by attackers, other blockchain implementations can also help companies fight ransomware attacks. Because of the use of blockchain, there is no single point of failure that can be attacked.

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