Imagining a Decentralized Global Financial System

DeFi is eating finance — Image by Ryan Sean Adams from Bankless

What would a Decentralized Global Financial system look like?

A decentralized system would likely look very different than now. For one, there would be no central authority controlling the flow of money. Instead, transactions would be processed and verified by a network of computers, making it much more difficult (if not impossible) for anyone to manipulate the system.

Decentralized Finance as a Revolutionary Banking System

The implications of using cryptocurrency to facilitate more efficient and secure transactions are enormous.

The Risks of Defi protocols to Traditional Finance

Although at the nascent stages of development, it is clear there are numerous issues with the adoption of a decentralized financial system.

Adopting Digital Assets

There are a number of potential benefits of adopting digital assets in the global financial system.

The citizens of the Phillippines adopted crypto payments very early on.

How to Improve Centralized Financial Institutions without Destroying Them

As it’s not a certainty that the decentralized financial system will entirely replace its centralized version, it is better to envision how to improve the current framework and how eventually the two systems can comingle. At least in as much as the capital and financial services sectors are willing to adopt technology and a shift in mindset about the customer-banker relationship. Here are a few basic ideas that need to be maintained and encouraged as we transition.

Understanding the underlying technology in the defi ecosystem - What are the real benefits of a decentralized network?

First, it is much more difficult for someone to hack or interfere with a decentralized network. This is because there is no central point of failure that can be exploited (Elon Musks’ favorite expression,”attack vector”).

dApps - The Banking Products of Decentralized Finance

dApps are different from traditional financial products in a few key ways

How Soon will Defi “Eat The World?”

Considering there is already more than 100 Billion dollars locked in liquidity pools and defi applications currently (also known as TVL), defi users are surely going to continue to grow no matter what the traditional financial sector does to block it.

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