Twenty-first-century technology is not only infiltrating every aspect of the economy, but it’s also revolutionizing the way people live their lives. It’s evident in the prevalence of smart homes and the Internet of things (IoT), artificial intelligence in the workplace, and now, decentralized finance is proving to be a greater alternative to the current financial systems in place.
This is all thanks to the invention of blockchain technology, which paved the way for the creation of cryptocurrencies. In essence, cryptocurrency, or simply, crypto is a digital currency that works in the same way as fiat currencies—those that are controlled by the governments, like dollars or euros.
However, the main advantage that cryptocurrencies have over fiat currencies is that they don’t have to go through traditional financial institutions. Instead of being held in banks, cryptocurrencies are registered in open-sourced ledgers that can be accessed by anyone and can be traded through blockchain technology.
Crypto is also a key player in the alternative decentralized finance (DeFi) system that uses Ethereum, which allows financial activities to be done without any involvement from traditional banks. DeFi services are transparent, algorithmic, and can be accessed by anyone with an internet connection.
Why Is Crypto Growing in Popularity?
The existence of cryptocurrencies returns the autonomy of consumers to them because they no longer have to depend on traditional financial institutions like banks for their day-to-day transactions. Consumers today will no longer have to deal with the insufferable requirements that often come with using traditional financial services.
Most transactions that use DeFi services and cryptocurrencies are pseudonymous, unlike in traditional finance where everything is tied to a person’s identity. This means that if they were to borrow funds, all they would have to do is use a smart contract and provide another crypto as collateral.
Fund transfers through DeFi services are almost instantaneous, especially because the markets aren’t limited by office hours. Borrowers won’t have to wait days or weeks to be approved for a loan, nor will they have to provide stringent requirements such as their credit scores and history.
And because there are no governing bodies that could deny people from using the financial services available in the market, they are free to control where their money goes or how it’s being spent. This can be why more consumers are turning to DeFi and crypto for their transactional needs.
How Can the Average Consumers Use DeFi Services?
As with the rise of digital wallets and e-payment methods, DeFi services are slowly making their way into the mainstream by facilitating peer-to-peer transactions among consumers. With the right mobile applications, consumers can send or stream money across the world, borrow funds, trade tokens, or even start saving with cryptocurrencies.
Of course, there is still a huge gap that needs to be filled. So many people lack the resources and financial acuity to access traditional finance services, let alone those in more advanced settings. However, if crypto startups and blockchain organizations focused on raising awareness about the services they offered, maybe more people will be encouraged to learn about crypto themselves.
It also won’t hurt if these established industry leaders work with a crypto marketing agency to make their brands more accessible to the public. This way, they are not only spreading financial wisdom to the less privileged through easy-to-digest content, but they are also improving their overall online presence because they’re making themselves known at a wider scale.
Besides, doing so has the potential to reap unprecedented rewards for their businesses considering that the average consumers nowadays are keen on making almost all their transactions through their mobile devices. It won’t be surprising if they turned to digital currencies and wallets as their main modes of payment for their day-to-day transactions.
The Future of DeFi and Cryptocurrencies
DeFi services and digital currencies are becoming much simpler for everyday consumers to use. There was a time when the world of cryptocurrency can be likened to that of unicorns—something that people have only theorized about but has never seen the light of day. That was, until now.
With DeFi services, consumers no longer have to subject themselves to the outdated processes of traditional financial institutions. They can move and use their money when they want without having to spend on fees because of intermediaries. Plus, they will be free to transact without fear of being traced back to the source.
The DeFi movement may still be in its burgeoning era, but it brings about a promising change in the way everyday consumers are using their money. Continuous developments in blockchain technology are making cryptocurrencies and DeFi services much easier to understand, which means that it’s only a matter of time before everyone joins in on the hype.