Crypto

DeFi, an abbreviation for “decentralised finance,” describes a wide range of P2P financial services that run on public blockchains like Ethereum or Terra LUNA Classic.

Published

2 years ago

February 1, 2023

D Y

DeFi, short for “decentralised finance,” is a catchall name for the various types of banking that can be conducted on public blockchains like Ethereum. Earning interest, borrowing, lending, purchasing insurance, trading derivatives, trading assets, and many other banking services are all possible through DeFi, but with less hassles and in less time than through traditional banking. DeFi, like other forms of crypto, is accessible worldwide, operates on a decentralised, anonymous, peer-to-peer (P2P) basis, and is anonymous to the public.

To what end is DeFi useful?

DeFi builds on the concept of Bitcoin’s digital currency to provide a low-cost, fully digital alternative to Wall Street (think office towers, trading floors, banker salaries). This has the potential to make it so that everyone with access to the internet can participate in secure, transparent, and free financial markets.

For what reasons would this be advantageous?

No application or “opening” of an account is required. Simply making a wallet will get you access.

Anonymity: No real name or email address is required.

To put it simply, you may move your assets wherever you want, whenever you want, without having to wait for lengthy transfers to complete or pay hefty costs.

Rapid: Interest rates and prizes are frequently adjusted (sometimes every 15 seconds), and they may be much greater than those on traditional Wall Street.

This system is completely open and accessible to all parties concerned (private corporations rarely grant that kind of transparency)

In what way does it function?

Dapps (short for “decentralised apps”) are the primary means by which users interact with DeFi, and at present, the majority of these apps are built for and deployed on the Ethereum network. There is no need to fill out paperwork or open an account like at a regular bank.

Currently, people are using DeFi in the following ways:

Money lending: Put your cryptocurrency to work for you and get paid back in interest and rewards every minute of the month.

Borrow money without ever having to fill out any paperwork, even for short-term “flash loans” that banks and credit unions won’t touch.

You can purchase and sell equities directly with other investors using crypto assets in a peer-to-peer trading model.

Invest some of your cryptocurrency in alternatives to traditional savings accounts to get higher interest rates.

Making a long or short bet on an asset by purchasing a derivative. These are the cryptocurrency equivalent of stock options or futures.

Can you tell me the drawbacks?

Active trading on the Ethereum blockchain might become costly because to the fluctuating transaction rates.

Due to the immaturity of the technology, your investment could be highly volatile depending on the dapps you use and how you use them.

When it comes to the Tax, you’re on your own to keep track of things. The rules may change depending on where you are.

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. CoinReporter.io and EUReporter.co does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Bitcoin

Coinbase Teams Up with Apple Pay to Simplify Cryptocurrency Purchases

Published

5 days ago

December 4, 2024

Editor

In a significant stride towards mainstream adoption of cryptocurrency, Coinbase, one of the largest and most recognized crypto exchanges in the United States, has announced a partnership with Apple Pay. This collaboration marks a pivotal moment in the integration of traditional payment methods with the burgeoning world of digital currencies, making it easier than ever for consumers to enter the crypto space.

Streamlined Access to Cryptocurrency

The integration of Apple Pay into Coinbase’s Onramp platform means that users can now purchase cryptocurrencies like Bitcoin, Ethereum, and others using Apple’s payment service directly within third-party apps. This move is aimed at simplifying what has historically been a complex process of converting fiat currency into crypto. Coinbase Onramp, formerly known as Coinbase Pay, now supports Apple Pay, offering an almost instantaneous method for users to fund their crypto purchases. This is particularly beneficial for those new to the crypto ecosystem, reducing the barriers to entry by eliminating the need for multiple exchanges or lengthy KYC (Know Your Customer) procedures.

A Leap Towards Mainstream Adoption

This partnership signifies more than just a technical integration; it’s a clear signal of cryptocurrency gaining legitimacy in the eyes of major corporations. With Apple Pay boasting approximately 640 million active users worldwide, and over 90% of retailers in the U.S. accepting it, this integration could potentially expose millions to the world of cryptocurrency. The move also comes at a time when the crypto market is experiencing renewed interest, with Bitcoin nearing $100,000, fueled by pro-crypto sentiments from incoming political administrations.

Benefits for Developers and Users

For app developers, this integration is seamless. Those already using Coinbase Onramp don’t need to take any extra steps; Apple Pay will automatically appear as an option for eligible purchases. This is particularly advantageous for developers of blockchain and crypto-focused apps, who can now offer their users a familiar and trusted payment method. Users benefit from a faster, more secure, and straightforward payment process. The convenience of using Apple Pay for crypto transactions is expected to encourage more frequent and less cumbersome trading activities.

The Broader Impact

The collaboration could serve as a catalyst for other tech and financial giants to explore similar integrations, potentially leading to a broader acceptance of cryptocurrencies in everyday transactions. However, it’s important to note that while Apple Pay can now be used for buying crypto, it does not yet support selling or converting crypto back into fiat through this method, showing that while the integration is innovative, it’s a step in what might be a longer journey towards full crypto-fiat interoperability.

Conclusion

Coinbase’s partnership with Apple Pay is a testament to the evolving landscape of digital finance where traditional and new-age technologies are merging to create more accessible, secure, and efficient financial systems. As cryptocurrencies continue to gain traction, such integrations could play a crucial role in normalizing digital assets within the mainstream economy. This development not only underscores Coinbase’s commitment to enhancing user experience but also reflects Apple’s nuanced shift towards embracing the crypto industry, potentially foreshadowing further innovations in this space.

This integration is not just about simplifying transactions; it’s about shaping the future of how we interact with money, blending the security and convenience of established payment methods with the innovation of blockchain technology.