What is DeFi? | Decentralised Finance Tutorial For Beginners | Decentralised Finance | Simplilearn #Finance

ria is a phenomenal baker who runs a bakery in new york on seeing the great success of her business she thought of growing it even bigger and launching a new franchise of her bakery in la so for the funds she applied for a Loan of fifty thousand dollars from the central

bank after completing her documentation for the Loan she comes to know that the bank is rejecting her Loan application due to her Loan borrowing limit of the amount decided by the central financial system furious with this situation she talked to a

friend lisa a Finance expert to understand how this whole centralized financial system of banks works and why did her Loan get rejected lisa explained to her

that in centralized Finance banks and businesses use the money that you invest or lend to make Profits and their overriding objective is to make money third

parties or merchants like debit Credit card providers control money transfers between the two end parties in the financial system each charging a fee for their services and that is why her Loan got rejected because the Loan amount exceeded the

limit decided by the bank or third parties for her ria was upset with the thought of not being able to grow her business and that is when lisa suggested ria to opt for decentralized none;">Finance or defy ria got a little confused by the term and asked what is decentralized Finance lisa answered the decentralized

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance is a piece of code that eliminates middlemen or banks by allowing individuals business merchants and corporations to perform financial transactions using developing technologies

peer-to-peer financial networks that provide security protocols and connectivity to the transactions are used to accomplish this stablecoin is a Cryptocurrency backed by an asset or tied to a

fiat currency like the dollar is at the concept’s core ria was fascinated and asked how it works and how exactly defy could help her get her Loan approved lisa further added that defy uses the consensus mechanism to eliminate centralized

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance models by allowing anyone or everyone to utilize financial services regardless of who they are or where they are the consensus mechanism refers to the methods used to achieve

agreement trust and security across a decentralized computer network now this defy mechanism runs in a decentralized environment and this is where blockchain comes into the picture it provides the environment where you can simply create your decentralized programs or d apps according to your

requirement in the blockchain network transactions are stored in blocks and other users in that network can verify them if a transaction is verified by all its verifiers the block is closed and encrypted and a new block is created containing information from the previous block thus creating a chain

of blocks and these transactions are handled by decentralized applications or say d-apps lisa further explained that ria’s Loan got rejected due to the lower limit by the centralized financial system but in d5 she can submit her Loan requirements into a

decentralized Finance application dapp and an algorithm would match her up with peers who could help her after that she’ll have to agree to the lender’s terms to

get her Loan the transaction is then recorded in the blockchain where it will be securely stored in a ledger that will make it impossible to hack or any kind of malicious intervention and after that she’ll receive her required amount of money once it is verified by the

consensus mechanism the lender can also then begin collecting their payments at the agreed-upon intervals from her when she makes the payment using her d app it goes through the same blockchain process and the money is transferred to the lender ria was impressed and relieved that she now could grow

her business in a much more secure and cheaper way all thanks to defy defy is meant to conduct transactions using Cryptocurrency because technology is still evolving it’s difficult to

say how if at all existing Cryptocurrencies will be applied so here’s a question for you which concept does defy use for its implementation a smart contracts b consensus algorithm c d

apps d none of the above please give it a thought and drop your answers in the comments section below three lucky winners will receive amazon gift vouchers decentralized none;">Finance is still in its early stages of development yet it is rapidly changing and expanding to replicate the traditional financial services ecosystem whether through decentralized exchanges lending and borrowing of various asset types or Insurance products and

it could have an impact on the future of centralized financial companies with defy being considered as a cheaper faster and more relevant alternative we hope you enjoyed this CashNews.co if you did a thumbs up would be really appreciated here’s your reminder to subscribe to our channel and

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