How DeFi can improve the e-commerce sector
We are in the era of digitalization. With new advancements in technology, the youth is eager to work along with the trend and exploring a more innovative approach to replace the traditional ways of almost every industry. When the world was hit by the COVID-19 pandemic, one thing became certain that some drastic changes will come. The most vulnerable sector during the pandemic is retail. Surely it has affected many others sectors as well. But there is something good that has emerged from this. And this is the growth of blockchain technology.
As things weren’t available in the markets due to lockdown in many areas the online business flourished. E-commerce has a significant rise during these difficult times. With more and more start-ups and the increasing trend of online purchasing, the need for more finance options has also increased.
DeFi, the game-changer
DeFi or we can say decentralized finance is the trend leader for the finance sector. DeFi is based upon the blockchain technology. Being in its initial stages, DeFi sounds like something which is bound to fail. But as the world is becoming more familiar with cryptocurrency and blockchain is leading the business world into new domains the idea of decentralized finance doesn’t seem to be a failure.
DeFi is working on its way out to supersede traditional finance by being a single alternative to every financial service from saving accounts to loans and trading. It is an open global system that abandons the need for a highly controlling central authority to control the financial system. With DeFi, one is the owner of his money and can decide how to spend it. As a blockchain, it makes sending money around the globe really affordable as easy as sending a mail. Moreover, money transfers which could even take days, are now a matter of seconds. And all of this demands just an Internet connection.
The beginning of DeFi can be credited to bitcoins, but its functions include providing many more financial services beyond storing and sharing values. It allows for decentralized exchanges, wherein users can trade digital assets without needing an exchange to hold their funds. DeFi has overcome the volatility issue of cryptocurrencies. Its values remain pegged to other assets, most famous currencies like USD. The option of digital money programming through smart contracts has increased the potential of DeFi to a very large context, financial inclusion being yet another benefit. And, possibly it is the reason for the ever-growing acceptance of DeFi among people.
But, just like any other digital financing activity, DeFi also faces security issues, Incidents of hackers stealing money from DeFi projects have been the biggest reason people not trusting and approving the use of DeFi. However, smart contract insurance is a solution to this problem, it reduces the risk for the users and makes them feel secure and confident while using DeFi.
Every new technology faces certain challenges in its initial stages, but once it overcomes those challenges, it opens the doors to new opportunities and possibilities never thought of before. Clearly, the potential of DeFi is enormous and it is proving to be a solution to all the current financial system problems, and changing the way we transact. Its transparency and easy using conditions are yet another reason for its potential success. Countries experiencing inflation issues possibly being the early adopters, DeFi is set to set a wide and diverse user base. Blockchains are sure to have a huge impact on society, by changing the face of the financial system of the world. Due to this fact the number of blockchain courses is decreasing day by day and one should learn blockchain online so that they can exploit the coming opportunities in the blockchain platform.
