Is blockchain technology supposed to solve each and every problem humanity has? Most definitely not.
But for certain problems, it represents an excellent fit and financial services are perhaps the elephant in the room in terms of obvious examples.
If Bitcoin has proven to be such a good option for the decentralization of money, why should things be taken one step further so as to also decentralize… well, finance?
As the name “decentralized finance” suggests, that’s precisely the name of the game when it comes to DeFi. As complex as the term may seem, understanding how things work doesn’t involve rocket science. The main goal is essentially eliminating the middleman by making it possible to receive financial services without depending on a central authority.
Just like Bitcoin can be stored and sent without there being a central authority such as PayPal which has the right to shut down your account at any point, DeFi technically makes it possible to receive banking services without a centralized bank. Or services pertaining to buying/selling assets. Or insurance… the list could go on and on.
In one minute, it’s time to make what many believe to be an ultra-complicated term simple to understand 🙂