Blockchain technology is the underlying technology of Bitcoin. In the early days, not many people paid attention to the underlying technology of Bitcoin. But when Bitcoin is not operated and managed by any centralized organization, it has been operating very stably for many years, and there have been no problems. So many people have noticed that the underlying technology may have a great mechanism, and not only
In order to be used in Bitcoin, this technology may be able to be applied in many fields. So the Bitcoin technology is abstracted out and called blockchain technology, or distributed ledger technology. So from a certain point of view, Bitcoin can be regarded as the first application of the blockchain, and the blockchain is more similar to the underlying technology such as TCP/IP, which will be expanded in the future.
The more industries.
DeFi (Decentralized Finance): Decentralized finance, also known as open finance, is a decentralized protocol used to build an open financial system, designed to allow anyone to conduct various financial activities anytime, anywhere.
"Decentralized finance", as opposed to traditional centralized finance, refers to applications in various financial fields built on an open decentralized network. The goal is to establish a multi-level financial system with blockchain technology and cryptocurrency. As a foundation, re-create and improve the existing financial system.
DeFi (Decentralized Finance), translated as decentralized finance, is also called open finance. Fintech is rooted in bureaucracy and trust mechanisms, while DeFi is free and the need for trust is minimized. Fintech's operations are based on software whose majority ownership belongs to a company. The software and its operation are based on complete trust in the company that owns the software,
The file is checked by others and can be reviewed.
What is the difference between traditional finance and DeFi?
The difference between DeFi and traditional finance can be seen from some of its core characteristics. DeFi runs on a DApp based on smart contracts. There is no organization or employee to manage the DeFi protocol separately. Its code is usually transparent on the blockchain, which can be opened to find errors and transaction records can be viewed. Traditional finance is managed by a centralized institution, which is opaque, which is also very acceptable.
It is easy to cause information asymmetry.
The definition of DeFi indicates that it does not require permission, and anyone can create DeFi applications or use the platform. In traditional finance, you often need a lot of verification to establish a financial platform.
DeFi uses blockchain technology to protect the privacy of customers. Although transaction records can be checked, the personal information of the trader is completely anonymous. Traditional financial centralized institutions have the personal information of customers. When we want to remit or borrow money, we need to rely on apps such as banks, Alipay, WeChat, etc., and user information will also be collected and used by these apps.
Since DeFi is built on the blockchain, when you join this blockchain, you can gain the power of transactions and enable cross-border transactions. Traditional finance is often restricted by regional politics.