Let's recognize it! Fintech disappointed, DeFi saved the day

While the term “financial technology” was coined in the early 90s, a combination of “finance” and “technology,” venture capitalists began to sell stories from the future. Lightning-fast global cash flow based on usability and ease of use, lower costs and better financial performance.

But we only have Zelle. (traditional American online shipping software)

Although the technology has changed almost every industry in the United States, the financial markets have benefited without impact. Of course, there are ATMs and credit cards, but the goods are still in two days, the payment will take five days, and the loan lasts almost two months.

When I recently read a new book on financial management or "DeFi", I was surprised that it was not successful.

DeFi is a new company that uses blockchain technology and crypto tools like Bitcoin to create an alternative to traditional financial applications.

The book contains a copy of an old "telegram" sent by Western Union in 1873. Telephone records show that "CC Antoine" sent "Jason Ingraham" $ 300 on August 25 of the same year. The total cost for the period was $ 9.73, or just over 3%.

Western Union is still available today, so I went to their website to see how much they now charge for their services. The company has an interesting tool on their website that allows you to "transfer money 24/7" with just one click.

As CC Antoine did in 1873, I used their device to measure the cost of shipping $ 300 to another American. What is the total price today? 39 weary.

Think about it!

In almost 150 years, despite advancements in technology such as highways, airplanes, computers and the Internet, the cost of sending $ 300 nationwide has risen sharply, Western Union has quadrupled!

When you start your research, the signs of a slowdown are everywhere. Why is there a 2.5% cashback every time I use my Visa card? Why does it take 2 (or more) business days for international shipping? Where are Tesla, Amazon and Google in the financial markets?

It looks like we were still charging $ 1 per minute for long distance calls or dial-up Internet connection with loans of $ 56,000.

What causes congestion?

There are many reasons for this “major stagnation”. Management, traditional, etc. (The average age of 10 financial companies in the United States is 126!) But the main reason is simple. The results have not yet entered the digital age!

Of course, there are online banking and mobile apps out there, but financial recovery data is still in its infancy.

Once you understand how checks work, you can understand why. If I send you a check for $ 10,000 and you deposit it in the bank, your bank will not allow you to withdraw the money until the check is “deposited”.

It doesn't matter if your bank asks for $ 10,000 to be deducted immediately and you don't have $ 10,000 in your account, it will be on your bill. This is because my bank verified that I had $ 10,000 in my account, hadn't written multiple checks on one account, and other work was taking time.

This rigorous process is doomed to fail in most fintech tests. Despite our best efforts, fiat currency is still delivered at regular mail delivery speed.

Cryptocurrency solves this problem.

The Bitcoin blockchain and all subsequent blockchains, such as Ethereum, are developed through advancements in computing, allowing money to move and set speeds online at a fraction of the cost of using the existing product. .

Now you can exchange money at any rate from anywhere in the world and pay almost instantly for less.

Example: This $ 1.1 billion Bitcoin market appeared outside of bank hours and settled in 10 minutes with a value of 0.00001%.

Recently, developers have used this innovation to create a whole new financial ecosystem called DeFi or Decentralized Finance. DeFi uses blockchain technology and networks like Ethereum to allow developers to fund new applications like software. These programs operate on a stand-alone basis with no regular overhead costs.

It's still early days, but what people are doing is amazing. There are several DeFi offers available today that allow:

Get rid of hundreds of millions of dollars in mortgages in seconds, while loan programs take weeks.

· Market tokenized stocks 24 hours a day, 365 days a year and allow immediate ordering of these stocks, while stocks are normally traded from 9:30 am to 4:00 pm five days a week and decide on two business days.

· Send money fast to anyone in the world (even via Twitter!) And arrive almost instantly, almost for free.

· Invest in income that is not affected by the book.

These features are a bit crude, but some are already working on a large scale. The largest DeFi protocol, Uniswap (a decentralized competitor to Coinbase) achieved $ 52 billion in packaging business last month without a single employee.

Of course, there are major risks, such as business and management issues.

However, DeFi has proven that it can perform many traditional financial procedures with faster, lower costs, and better returns, thereby attracting investment and a layer of capital. (Venture capitalists invested a record $ 17 billion in this space in the first half of this year.)

It gives me hope. After years of waiting, the budget has finally arrived. He just changed his name to DeFi.