In that article, Michael argued that the popularization of DeFi would only be possible with decisive political action (aside from the intrinsic challenges of decentralization itself, such as security and UX-related ones). That’s why I’m insisting on this topic—because only by making DeFi more visible will we push it into the public agenda.
And we need to do that because the very concept of decentralization can greatly expand the finance industry in amazing ways. Here’s how that could happen.
Traditional Financial Hurdles
According to the World Bank, approximately phone number list one-third of the world’s population can’t access financial services today. This situation is especially dire when it comes to lending, mainly because all those people lack access to credit (which can make a huge difference in terms of building wealth). That means that the traditional finance system has inequality embedded at its core.
Think I’m exaggerating? Consider the credit rating systems in place in many countries around the world. How can it be fair for such a system to determine whether someone is “worthy” of accessing financial opportunities based on hazy criteria? Such a system leaves out a considerable portion of people basically because they lack proper records or specific connections.
A Shift in Paradigm
DeFi is an answer to all those issues I’ve 8 tips for writing email marketing copy that converts just mentioned. In fact, DeFi’s promise is so big that it can usher in a paradigm shift for the entire financial industry. Thanks to the use of decentralized apps (dApps) and nodes connected through a vast network ecosystem, people and organizations alike can use smart contracts that self-enforce themselves automatically, collectively validating and recording every transaction in immutable records.
That might seem like a bunch of jargon, but it’s far from that. By using several interconnected networks of individual and independent computers with no central server, you eliminate the need for gatekeepers. Thus, all the financial transactions in that ecosystem are validated by the ecosystem as a whole rather than by the almost arbitrary criteria of a central figure or institution. This results in increased transparency and efficiency for all parties involved.
The core benefit of decentralization is the expansion of the whole system. That’s because anyone with a modern device can plug into one of the many networks of the financial system and start making transactions. Since there are no barriers to entry or central authority to deny that access, anyone can make deposits or borrow and lend money. The only requirement for participating is having that device. After that, everyone plays by the rules of the smart contracts in place.
The Future Looks Bright
In Michael’s article, he said that “the DeFi zn business directory ecosystem may become the future of the finance industry.” Right now, and given how quickly the general opinion is changing surrounding cryptocurrencies and decentralized finance, it feels like that future is more likely than ever. And that will certainly be a bright future.
