Defi is powered by Blockchain technology.
Defi stands for decentralized finance. It is just a short way of saying it.
Decentralized: Can be defined many way but simply it is not controlled by central banks such as the federal reserve in the United States or equivalent in your country. Your country may or may not have a central bank.
Finance: The management, study, and discipline of money and investments. This also can be defined in several ways but I find this to be the most accurate in my opinion.
Defi is a combination of the above two words.
Defi is marketed a Web 3. The user experience programming for Web 3.0 is the same as Web 2.0.
DEFI Is a place to transact. Transactions can be as simple as sending money to someone or several around the world or locally.
It is much easier and faster than going through a bank once you get the hang of it. You can also purchase NFT's (Non fungible Tokens) such as a piece of digital art.
You can do many of the same things you can do at a centralized bank.
- Invest
- Earn yields on your assets
- Save
- Borrow
- Lend
- Get a loan
- Trade
- Swap your asset for another. Such as Polygon for Ethereum.
You can also do things like play games to earn money. The possibilities keep growing.
To simply define types of Cryptocurrencies:
Coins: Can include Bitcoin and altcoins. Some might say altcoins are anything other than Bitcoin. Without getting technical we will leave it at that. I suggest you do your own research.
Tokens: Represent an asset. Can be used for investment purposes such as NFT's. Represents the specific use, or assets issued on a blockchain.
Defi can be complex to define. And you will find conflicting information. Understanding the basics are important to understanding how it works. Once you understand how it works, and if you are interested in learning the technicals, find a blockchain engineer who is driven to explain these things to get the facts rather than opinions. Good luck and happy Defi.
If you know more use cases in Defi, or any helpful information for beginners comment below and please keep it as short as possible. Thank you.
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