Blockchain in Summary
Blockchain is needed in order to create a secure and tamper-proof record of transactions. This is especially important in industries where there is a lot of money or sensitive information involved.
There are a few key reasons why we need blockchain:
Blockchain enables trustless and permissionless financial transactions. This means that users can transact with each other without the need for a central authority or middleman.
Blockchain technology is immutable and transparent. This means that all transactions that take place on the blockchain are recorded on a public ledger. This makes it difficult to commit fraud or manipulate the data.
Blockchain-based decentralized finance applications are often built on top of smart contracts. This allows for complex financial transactions to be executed automatically and securely.
Decentralized Finance (DeFi) & Smart Contracts
Blockchain technology underlies cryptocurrencies and has many potential uses beyond digital currencies, including decentralized finance (DeFi).
DeFi is a catch-all term for financial applications built on a blockchain especially Ethereum that enable users to lend, borrow, trade, and invest without the need for a centralized authority.
In other words, DeFi applications are built on Ethereum and run on smart contracts, which are self-executing contracts that live on the blockchain. Because they run on the Ethereum Virtual Machine (EVM), DeFi applications are permissionless and decentralized, meaning anyone can use them without having to go through a centralized authority. This is in contrast to traditional financial applications, which are often centralized and require users to go through a bank or other financial institution.
DeFi will disrupt existing Financial System
DeFi applications have the potential to disrupt the traditional financial system by offering a more efficient, transparent, and accessible way of doing things. For example, DeFi applications can be used to trade cryptocurrencies, lend and borrow money, and even invest in traditional assets like stocks and bonds.
Decentralized exchanges (DEXes), which are built on Ethereum, are one type of DeFi application that has been gaining popularity in recent months. DEXes are decentralized exchanges that allow users to trade cryptocurrencies without having to go through