Understand the role of decentralized finances in the rise of bitcoin
The rise in power of Bitcoin, often called “original cryptocurrency”, was a remarkable phenomenon that has shaken the world of finance. With its decentralized and borderless nature, Bitcoin drew the attention of investors, traders and financial institutions around the world. But what is behind this sudden increase in popularity? In this article, we will immerse ourselves in the role of decentralized finance (DEFI) in the rise of bitcoin.
** What is decentralized finance (DEFI)?
Decentralized finance refers to a class of financial services and products that operate on blockchain technology, which allows peers transactions without the need for intermediaries such as banks or governments. DEFI platforms use smart contracts, self-executing software that automates many tasks, to provide a range of financial services, including loans, borrowing, trading and investment.
Bitcoin’s rise
The Bitcoin value has been on an incredible trajectory since its launch in 2009. The initial supply of coins (ICO) has lifted $ 18 million, but it is the adoption underused by traditional investors who have seen the price soar. In 2017, Bitcoin had reached a record level, with a market capitalization of more than $ 20 billion.
So what’s behind this sudden push? Several factors contribute to Bitcoin’s success:
- Decentralization : Bitcoin is a decentralized currency, which means that it is not controlled by any government or institution. This allows greater security and transparency.
- Transactions without border : With Bitcoin, individuals can transfer money beyond borders without the need for intermediaries such as banks.
- Low costs : Compared to traditional payment systems, Bitcoin has relatively low transaction costs.
- Safety : The use of advanced cryptography ensures that transactions are secure and secure.
Decentralized finance (DEFI) in the rise of bitcoin
Now let’s explore how Defi played an important role in the rise of Bitcoin:
- Lend and borrowing : DEFI platforms allow users to lend or borrow Bitcoin with relatively low interest rates, which makes it accessible to people who may not have access to traditional financial institutions.
- Decentralized exchanges (DEX) : Dex allow trading between peers without the need for intermediaries such as brokers or exchangers.
- Stablecoins : Stablecoins are a cryptocurrency that maintain stable value compared to traditional currencies, which makes them attractive for investors looking for diversification.
- NFTS and game platforms : DEFI platforms have also led to the creation of NFT (non-buttons) and game platforms, which have become popular with users.
The future of Bitcoin
While Defi continues to evolve and mature, it is likely that his role in the rise of Bitcoin will only grow. Here are some potential trends to look at:
- Increased adoption : As more and more users adopt DEFI platforms, we can expect an increased adoption of Bitcoin as a reserve of value.
- Regulatory clarity : The regulatory environment of DEFI is always evolving, and clarity on the way it will be regularly can lead to a greater investment in this space.
- Interoperability : The development of interoperable solutions between DEFI DEFI platforms and traditional cold financial systems Unlock new cases and use applications.
Conclusion
In conclusion, the rise of bitcoin was motivated by a combination of factors, including its decentralized nature, its transactions without borders, its low costs and its security features. Decentralized Finance (DEFI) played an important role in this phenomenon, offering users access to a range of financial services and products that were not available before.