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Why DeFi is better?
Decentralized finance (DeFi) is a recent innovation that came into sight with blockchain technology and cryptocurrencies. DeFi is essentially a new method in the financial industry where you can transact with someone, pay someone in a decentralized manner (for the first time) and in simple terms do everything that you can with centralized finance.
Centralized Finance (CeFi) is considered the money held by banks, money remittance services and merchants providing card merchandise services.
The problem with Centralized Finance is that there are high transaction fees and costs associated, there is a company running the system and whenever there is an issue with you or with your account they can freeze or remove you from their system without any notice, and lastly there are cases in our world where banks and governments just take your money away from you, again, without any notice (Greece and Cyprus).
All the above can be solved with Decentralized Finance.
In DeFi you do not need KYC to create any account, it’s decentralized, nobody controls the system so they can’t ban you from using it. You can send money to any account without questions or delays and lower transaction costs. You do not need to move from your chair and lose time as everything is online digitally on the internet, and lastly it works 24 hours per day, 7 days per week without any stop.
DeFi is not perfect, but it is a good (and better) way to move forward and transit from the old traditional systems to new ones.
In case you lose your private keys to your wallets, your funds are gone forever, there is no customer support to assist you. If you sent money by accident to another address, it is gone.
But that’s the reason is power, it’s decentralized, and you have complete control over your funds and your accounts.
My last thoughts of this article are about the ‘unbanked’. Unbanked people are among us that cannot participate in the current financial system (CeFi) because they do not have any bank account and cannot open one due to lack of appropriate id documents. These people are dependent on money remittance services to send or receive money.
Those people can now have access to the global financial system. These people can solve their problems with DeFi.
The major idea to leave here is that you can do everything that you do in centralized finance, banking, transactions, payments etc. by using decentralized finance.
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