Anyone interested in the fintech industry must be aware of the cryptocurrency world and the huge return it promises when invested in properly, with substantial research. For anyone unfamiliar with the crypto world, cryptocurrencies are decentralised finance (DeFi) that are not run by any institute or any organisation.

Decentralised finance promises many benefits such as:

• Fast Transactions
• Secure Transactions
• Complete Transparency
• Wide Range Of Utility
• Easier
• Fewer Transaction Charges

Blockchain

This is all possible due to the technology that the cryptocurrency is based on, known as blockchain technology. Blockchain can be regarded as a decentralised ledger, that records any form of transactions that occur on it. It comprises a network of computers connected, which seamlessly carry out any transaction on the network.

As the blockchain is connected, it has many advantages like secure transactions, faster speed of transactions, global reach, and transparency. All these advantages have led to many developing applications and assets on this blockchain, like cryptocurrencies, decentralised applications, smart contracts, and NFTs.

The first blockchain was developed by pseudonymous identity, Satoshi Nakamoto, in 2008 for Bitcoin, which is the top-ranked cryptocurrency by market cap today.

Purpose Of Decentralised Finance (DeFi)

Many traditional financial institutions, like banks and governments, run on a centralised system and therefore have control over how the financial transaction plays out. This is not the case in decentralised currencies such as crypto. These cryptocurrencies are not under the control of any entity, making them available to anyone who wishes to use them.

These currencies can be looked at as an:

1. Investing Asset: These assets have promised huge returns on investment when properly done. The crypto market is open 24 X 7, unlike the traditional equity markets. It has a lot of volatility and a lot of potential use cases which promise higher returns in the future.
2. Developing And Operating Decentralised Application: To promote the decentralised nature and use the blockchain technology to its full capability, DApps are being developed which will have attributes of the underlying respective blockchain technology.
3. Single World Wide Currency: Think of a cryptocurrency as what the English language is to the world. As the English language is used to communicate in most of the world and hence adopted worldwide, imagine a currency which can be accepted by the whole world. This is where cryptocurrencies come in. The users won’t have to go through a tedious process of changing from one currency to another, paying extra charges for international services, etc.