The decentralised finance used in Bitcoin was revolutionary, especially at this historical financial landmark. The corrupt central authority of traditional banking, which operated via government channels, was blamed for the crash and so people were seeking alternatives.
The anonymous Satoshi Nakamoto inserted a message into the genesis block of Bitcoin. It was a headline from that day reading, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” In doing this, Satoshi directly positioned Bitcoin as an alternative to traditional banking and a response to the crash.
One huge (and very appealing) advantage of Bitcoin is its disconnect from government-controlled inflation. Instead, Bitcoin purely relies on supply and demand. Along with its decentralisation, meaning that it exists without a central governing body controlling the finance, cryptocurrency is an exciting alternative to credit card companies and big banks, all of whom were blamed for the economic crisis in 2008.
Considering that Michael Burry, best known for predicting the subprime mortgage crisis in 2008, has stated that the economic situation of 2022 is like ‘watching a plane crash’ - is now the time to be looking away from traditional banking, and instead investing in crypto?
Decentralised Finance Explained
After the genesis block was mined, Satoshi Nakamoto wrote, ‘The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.’ In this comment, Satoshi is addressing the politics ingrained in the banking system that led to a lack of confidence in its success.
As a result, Bitcoin is the antithesis of central authority finance. Decentralised finance or DeFi uses blockchain technology with smart contracts to organise it. This removes any need for third-party involvement and doesn’t require any paperwork, therefore payments processed via decentralised finance are much smoother and outside of any external control, like the government.
The blockchain is connected by a series of codes called smart contracts. Each smart contract has the unique number and date of the block both behind and in front of it. This blockchain is stored on thousands of different servers, making it virtually impossible to tamper with, as it would require hacking into every system and changing a whole network of codes.
The Future of Cryptocurrency
With the advent of hundreds of ‘alt-coins’, all using the same basis as Bitcoin (BTC), the future potential of crypto is exciting. It’s now easier than ever to buy, loan, and store crypto and many brands are starting to accept these cryptocurrencies as payment.
One exciting coin with lots of potential is Solana (SOL). This coin is widely considered the fastest blockchain in the world with an almost equally rapidly growing ecosystem. Solana (SOL) has thousands of projects in progress utilising DeFi, making it a coin worth keeping an eye on for those interested in decentralised finance.
Another potentially exciting coin, this time in its presale, isCalyx Token (CLX). Calyx Token (CLX) is a community-driven coin, meaning that its investors become a united society, democratically voting on the decisions about Calyx Token (CLX). This is a very appealing system for those looking to avoid centralised, governed finance, like traditional banking.
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