When life throws you a curveball, it’s time to get innovative. Big banks knowingly gambled with their customers’ money in high-risk businesses in 2008, pushing the United States into a financial crisis. In the aftermath of this disruption, a crypto genius created blockchain, becoming a massive enabler of change to a broken system.

Blockchain is the system on which all cryptocurrencies and NFTs are built. Cryptocurrencies are digital currencies that use encryption and are stored on the blockchain, making them unchangeable, decentralized, and open to everyone.

Cryptocurrencies have become one of the most sought-after investment options because they enjoy high security, faster transaction times, scarcity, and potential for huge returns. The first significant blockchain innovation was Bitcoin, the first global currency. A worldwide currency that’s easily traded between countries without the need for exchange rates.

Understanding Bitcoin

Bitcoin is a digital currency that runs free of any central authority, oversight of banks, or government monitoring. Instead, it depends on peer-to-peer software and cryptography. Network nodes use cryptography to verify transactions, which are then stored in a public distributed ledger called a blockchain.

Satoshi Nakamoto, a pseudonym for an unknown individual or group of people, created the cryptocurrency in 2008, but the developers put the currency in use in 2009.

Bitcoin is by far the most well-known and most prominent cryptocurrency. But there are many others like Ethereum, Litecoin, Ripple, and Dash among the top ten cryptocurrencies in terms of market capitalization.

Bitcoin has undergone dramatic growth since its introduction in 2009. For instance, its value surged by about 30,000 percent from October 2013 to early June 2021. While this is impressive in and of itself, some analysts believe Bitcoin’s value will continue to rise as cryptocurrencies and the blockchain technology that underpins them become more prominent and integrated into people’s daily lives.

Investing in highly volatile assets such as cryptocurrency can be quite profitable, especially over time. Cryptocurrencies with a high utility, such as Bitcoin, tend to increase in value as their adoption and demand increase. However, while Bitcoin has seen incredible highs, it has also experienced devastating lows.

For example, after reaching nearly $20,000 in 2017, its value dropped and did not rise above half of that until 2020. Although it’s been trending upward since then, it’s still a highly risky investment.

What you Need to Know Before Investing In Cryptocurrency

Are you itching to buy Bitcoin but don’t understand how cryptocurrencies work?? Hold your horses and do your homework well! Digital currencies can be an exciting investment prospect, but inexperienced investors risk losing money if they are duped by scammers or invest in a cryptocurrency that has no history.

If you’ve decided to invest in the cryptocurrency market, you should do your homework first, just like any other investment. We’ll go through what you should know before investing your life savings in BTC.

Consider Why You Want to Invest

Are you interested in cryptocurrencies simply because it is popular? Is there a more substantial reason for investing in one or more specific digital tokens? Of course, different investors have different financial objectives, and for some, investigating the cryptocurrency space makes more sense than others.

But one key takeaway is that you should never invest in a digital currency without understanding its underlying technology and the market conditions.

Understand Crypto Investing and Trading

Although they appear identical, these are two different strategies for purchasing and selling cryptocurrency.

• Crypto Investing– Buying crypto to profit over a more extended period, such as months or years, or when values have risen significantly. Investing in cryptocurrencies is highly similar to stock, currency, and other financial assets.
• Crypto Trading– To benefit from the crypto market, crypto traders take advantage of the lower price increases. This is a more complex technique of crypto investment, held for expert traders with a thorough understanding of the volatile crypto market and trading tools such as Bots.

Understand the Blockchain

When most people think about Bitcoin or other cryptocurrencies, they only think about the currency aspect. However, blockchains are much more than just currencies. In fact, blockchains are so versatile that you can use them to create anything from digital assets (like cryptocurrencies) to decentralized applications.

So, if you’re not familiar with blockchain technology, you must take the time to learn about it. Doing so will help give you a better understanding of why some cryptocurrencies are worth more than others and how they work.

Read the White Paper

Most projects offer crucial information on their websites, such as their vision, team members, tokenomics, and social media accounts, but reading their white paper can be beneficial. The white paper is an excellent guide for fundamental research.

Every project should include a white paper that explains the specific problem the project is attempting to tackle and how it intends to do so.

Understand the Risks

Cryptocurrencies are incredibly volatile and risky investments. Prices can rise and fall dramatically in a short period, so you must understand the risks before investing. Additionally, most cryptocurrencies don’t have a backup of physical assets, so they’re not as stable as traditional investments.

Invest What You Can Afford To Lose

Don’t invest more money into cryptocurrencies than you’re willing to lose. Cryptocurrencies, like stocks, are highly volatile, and the value of tokens can collapse in a matter of hours due to supply and demand pressures.

Other variables that can cause the value of cryptocurrencies to rise include government regulations, media frenzy, and investor sentiments. Remember, this is a high-risk investment, and there’s always the potential for you to lose everything.

Use a Reputable Exchange

When buying Bitcoin or any other cryptocurrency, you must use a reputable exchange. There are many scams in the cryptocurrency world, so be sure to research before selecting an exchange.

With that stated, if you still want in on the game, here’s how to get your hands on some Bitcoin.

How to Buy Bitcoin in 4 Simple Ways

Here’s a guide on how to buy Bitcoin in four simple ways.

1.    Choose the Right Crypto Exchange

You’ll need a crypto exchange to acquire Bitcoin or any other cryptocurrency. This is where buyers and sellers meet to trade money for coins.

There are hundreds of exchanges to choose from, but as a beginner, you’ll want to go with one that offers a good combination of ease of use, minimal fees, and excellent security.

If you don’t already have a crypto exchange in mind, check out the top selections, including Coinbase, Gemini, and Binance.

Check if your exchange platform has a Bitcoin wallet. If it doesn’t, you’ll need to create your own. You can also buy crypto on a platform like Robinhood, Paypal, or Venmo, though buying crypto this way means you won’t be able to withdraw or move your coins to another platform. You’ll need to sell your crypto and then repurchase it on a different exchange if you want to keep it in a separate wallet.

• Select a Payment Method

Before you can start investing in Bitcoin, you must first fund your account with funds from an exchange. Depending on the exchange, you can finance your account with bank transfers from a checking or savings account, wire transfers, PayPal, a cryptocurrency wallet, or even a credit or debit card.

However, keep in mind that specific funding methods may incur additional transaction fees. When you make an electronic transfer from a bank account, Coinbase doesn’t charge a fee. It does, however, charge $10 for wire transfers and 2.5 percent for PayPal transactions.

• Make a Purchase

You can place your first order to acquire Bitcoin onceyou finance your account. Depending on the platform you’re using, you might be able to buy it simply by hitting a button, or you might have to type in Bitcoin’s ticker symbol (BTC). After that, you’ll need to enter the amount you want to invest.

You will own a fraction of a Bitcoin once the transaction is complete. This is because purchasing a single Bitcoin today necessitates a sizable initial commitment. To buy a Bitcoin at the current price of $38,000, you’d need to invest $38,000. If you put in less money, say $1,000, you’ll obtain a percentage of a Bitcoin, in this case, 0.026 percent.

• Choose a Secure Storage Option

Your crypto exchange most likely includes an integrated Bitcoin wallet or, at the very least, a favored partner where you may store your Bitcoin safely. On the other hand, some users are wary about leaving their crypto connected to the internet, where it could be taken more easily by hackers.

Most large exchanges have private insurance in place to reimburse customers in a breach, and they’re gradually holding the majority of user assets in offline “cold” storage. You can store your Bitcoin in an online or offline Bitcoin wallet of your choice if you want the highest level of protection. However, keep in mind that you may be charged a modest withdrawal fee if you withdraw cryptocurrency from an exchange.

Conclusion

Investing in a popular cryptocurrency can be tempting significantly when its price increases. However, even though it has the potential to be a profitable investment, you should proceed with caution: It’s a very volatile investment that experts advise against putting a large portion of your money into.

After suffering one of its worst-ever starts to a year, Bitcoin surged back to prominence in March with a 9% gain, nearly reversing losses from earlier in 2022 and beating U.S. stocks while spearheading a rise across broader digital-asset markets.

Now, suddenly, a day cannot pass without hearing about Bitcoin. Look one way, and there, Larry David and Matt Damon are advertising crypto firms. Swivel your head– oh, hey, it’s the mayors of New York City and Miami debating who loves Bitcoin more.

More and more individuals are interested in Bitcoin these days; after all, it’s the world’s leading cryptocurrency. Whether you’re a financial institution, an everyday investor, or just curious about all the fuss, you may want to know where to buy Bitcoin.

Cryptocurrency exchanges are one of the simplest ways to buy bitcoin, and this article will guide you to the 10 top cryptocurrency exchanges for buying Bitcoin.

What is a Cryptocurrency Exchange?

A cryptocurrency exchange is a market-house where you can buy and sell cryptos, like Ether or Bitcoin using different traditional fiat money options or other digital currencies. Cryptocurrency exchanges function similarly to other trading platforms you might be familiar with. They set up accounts for you where you can generate various order types to buy, sell, and speculate in the cryptocurrency market.

Advanced trading features like futures trading and margin accounts are accessible on some crypto exchanges, but they are less common for users in the United States. Others include crypto staking or crypto lending, which allow you to earn money on your cryptocurrency holdings. The leading exchanges provide educational resources to keep you informed on all things crypto.

In general, there are two categories of cryptocurrency exchanges: centralized and decentralized exchanges.

·        Centralized Exchanges

In a centralized exchange, a central authority handles all the order books and transactions. Users can transfer their fiat cash, such as dollars, directly into cryptocurrency on centralized exchanges, making it simple to get started with crypto trading.

Some bitcoin enthusiasts believe that centralized exchanges conflict with the decentralized nature of cryptocurrencies. Centralized exchanges may demand users fulfill Know Your Customer (KYC) standards— to reveal their identity to combat money laundering and fraud, like when applying for a bank account.

The downside to centralized exchanges is that they are prone to hacks. In January 2018, the popular centralized exchange Coincheck was hacked, losing $530 million worth of NEM. Following this incident, Centralized crypto exchanges have strengthened their security to counter breaches in recent years. They now store most customer funds offline and have insurance coverage in place to cover crypto losses in the event of a hacking, among other things.

·        Decentralized Exchanges

Network nodes handle order books and transactions in decentralized exchanges rather than a central authority. Anyone who joins a DEX network can certify transactions, similar to how bitcoin blockchains function. This may improve accountability and transparency while also ensuring that exchange can continue to operate regardless of the firm’s state.

The problem is that decentralized exchanges are far less user-friendly in terms of U.I. and currency conversion. Users can’t always deposit dollars and exchange them for crypto on decentralized exchanges. This implies you must either have cryptocurrency or utilize a centralized exchange to obtain crypto that you can use on a DEX.

You’ll undoubtedly be doing direct peer-to-peer exchanges as well. This implies it may take longer to locate someone interested in buying what you’re selling, and you may have to accept price concessions to purchase or sell low-volume crypto swiftly if liquidity is low.

The Best Cryptocurrency Exchanges

You can trade bitcoin and other digital assets on nearly 600 cryptocurrency exchanges worldwide. However, prices, quality, and safety differentiate them. Experts recommend that it’s best to stick with well-known, high-volume exchanges. Below is the best list of the top 10 cryptocurrency exchanges.

1.   Binance

Binance is the largest cryptocurrency exchange globally in terms of the daily trading volume of cryptocurrencies. It is a safe and solid marketplace for buying and selling cryptocurrencies, with a simple buy/sell process.

You can trade bitcoin or other cryptocurrencies using various payment methods, including bank transfer, credit or debit card, and cash. To give you a secure and flawless crypto-buying experience, Binance only works with verified and trustworthy partners.

Binance accepts several currencies and makes it simple to buy crypto with USD, AUD, EUR, and other fiat currencies. To acquire crypto, you can use a variety of accepted stablecoins like Binance USD (BUSD), Coinbase USD Coin (USDC), and Tether (USDT).

2.   Coinbase Exchange

Coinbase is a popular cryptocurrency exchange in the U.S. Fortunately; you can purchase Bitcoin using the Coinbase app wherever Coinbase is available. It’s quick, simple, and safe.

Notably, 98 percent of customer assets are held in cold storage in a global network of safe deposit boxes backed by digital and paper backups. Bank-level encryption and security protect its website. All accounts must also use two-factor authentication, which helps prevent anyone from accessing your account unless they have physical access to your phone. Coinbase makes it easy for investors to buy crypto with USD, AUD, EUR, INR, and RUB,

3.   FTX

This cryptocurrency exchange is ideal for experienced investors looking for low fees and advanced features. FTX offers margin trading, short selling, and a variety of order types. It also has a special feature that permits users to trade a basket of cryptocurrencies as if it were a single asset.

FTX accepts USD, EUR, GBP, JPY, and CNY payments. You can buy bitcoin or other cryptos on FTX with various payment methods, including bank transfers, debit cards, and credit cards. Every cryptocurrency exchange must prioritize security, and FTX.US is no exception. It offers a custom-built hot and cold wallet for holding customer crypto funds and agreements with industry-leading custodians and complete external backing of all hot wallet funds. Users can also utilize two-factor authentication (2FA) for logins and withdrawals to protect their accounts.

4.   Kraken

Kraken is a cryptocurrency exchange that authorizes users to buy and sell Bitcoin and Ethereum. Kraken is one of the first Bitcoin exchanges, and it offers over 120 different coins for buying, selling, and trading at low costs. It’s notable for supporting spot trading and cryptocurrency futures at current market rates. Kraken offers users margin accounts and futures trading, riskier products beneficial for particular trading strategies. There’s also a feature to secure your account from any changes if you’re concerned that hackers could breach it.

5.   KuCoin

KuCoin’s extensive features, cheap fees, and a wide choice of coins are ideal for experienced cryptocurrency traders. However, KuCoin does not have a license to operate in the United States, lowering its ranking.

KuCoin also has a mobile app that permits you to recruit trading bots. Trading bots can trade your cryptocurrencies, so you don’t have to keep track of the market. To secure the crypto assets stored on its exchange, KuCoin has teamed with Onchain Custodian. This includes Lockton insurance against crimes like hacking. It also has a bug bounty system to encourage ethical hackers to report system flaws.

6.   Huobi Global

Huobi Global provides an all-encompassing ecosystem for experienced crypto traders and investors, allowing them to buy, sell, stake, and borrow various cryptos, including Bitcoin. However, the exchange has yet to attain regulatory compliance in substantial areas, and beginners may struggle to use the platform’s numerous tools and features. It is not also available in the U.S.

Huobi secures client assets in multi-signature cold wallets and has a 20,000 BTC Security Reserve Fund to deal with serious security incidents to ensure its users’ safety.

7.   Gate.io

Gate.io will most certainly overwhelm inexperienced investors or those just getting started. They will be dissatisfied by the inability to deposit fiat currency, such as U.S. dollars, to buy crypto directly on the platform. If you don’t already have coins, you’ll need to buy them on another exchange and transfer them to the platform to start trading.

The Gate.io platform provides real-time market data to its consumers. You can view information like the current price, trading volume, liquidity, and price trends of all supported altcoins on the platform. Despite Gate.io’s hack in 2019, Cryptocurrency Exchange Ranking (CER), a third-party that reviews crypto exchange cyber security, ranked the platform as the best in August 2020.

8.   Bitfinex

Bitfinex is a famous cryptocurrency exchange globally known for its low fees. It’s also linked to the Tether stablecoin, which has caused the exchange to run into regulatory issues. The minimal costs on Bittfinex are favorable, but its shaky history may concern future customers.

To keep user accounts safe, Bitfinex uses different industry-standard security measures. Two-factor authentication, powerful APIs for linking third-party services, withdrawal protection mechanisms, and cold storage of customer assets are just a couple of the features available.

9.   Crypto.com Exchange

Crypto.com is a cryptocurrency exchange that offers trading, investment, staking, wallets, and non-fungible tokens (NFTs). This exchange has over 250 different currencies, low fees, and discounts for individuals in a significant position in Crypto.com Coin (CRO). Its ecosystem of crypto-related items may be a suitable fit for people trying to get the most out of their coin.

Crypto.com utilizes various security procedures to keep user accounts safe, including multi-factor authentication (MFA) and whitelisting.

10.               Binance.US

Binance.US is a cryptocurrency exchange for citizens of the United States. While Binance.US boasts lower trading costs than its competitors, it has a limited variety of digital assets to buy, sell, and trade. It isn’t available in every state in the United States.

Binance.US provides its users with industry-standard security features. To buy, sell, or exchange cryptocurrency, users must also authenticate their identity. Although the verification process is time-consuming, it is in place to prevent fraud and other illicit actions.

The world of Finance is rapidly evolving. With the rise of blockchain, the technology is going through another revolutionary phase. This is effectively cementing the transformation of the internet from being one of information to one of value. DeFi, or Decentralized Finance, is at the forefront of this transformation. To many, it’s just about providing liquidity, but it’s far more than that.

Since the legendary Medici Bank’s establishment in 1397, the financial structure has stayed intact. On the other hand, financial services remain unchanged despite software developments and the internet. While consumer expectations are shifting, financial institutions have responded with cosmetic innovations such as improved user interfaces and more excellent online products.

In contrast, several other businesses have seen complete disruption, including retail commerce, media, and hospitality. In the generation of rapid innovation, we will also see the traditional finance model giving way to new and better-operating methods: DeFi.

DeFi, or open finance innovation, is the game-changer in financial history. It is the new paradigm for how institutions should deliver financial products and services.

What is DeFi

Decentralized Finance, also known as (DeFi), describes financial applications built on top of public blockchains geared toward disrupting financial intermediaries.

DeFi automates centralized manual, inefficient financial services by converting them into smart contracts, which are blockchain-based applications. For the first time in history, markets do not require centralized financial intermediaries, as smart contracts connect buyers and sellers directly.

Several devastating historical incidents have demonstrated the effects of financial centralization, including the 1929 Black Friday, the 1989 S&L Scandal, the GameStop Stock Scandal, and the 2002.com crash.

Most of us can testify to this from our personal experience with the 2008 financial crisis, triggered by centralized Wall Street goliaths controlling the banking sector and refusing to keep their end of the bargain.

Do you notice the pattern here? Out of greed, centralized organizations have deceived the public, pushing us to invest our hard-earned money only to haul the rug out from under us. This concentration of power creates victims, obstructs accountability, and slows down evolution and innovation.

In a nutshell, the goal of decentralized finance networks is to distribute power among users. It’s a platform that makes financial products easily accessible to everybody without the corruption that comes with a centralized agency. Decentralized money is a game-changing and vital step toward actual financial freedom for the people.

The next step is to create an ecosystem that enables people to use their money the way they want. Imagine a world where you can borrow and lend without going through a centralized authority. This is what DeFi offers: A fair, open, and accessible financial system to all.

Why is DeFi Scaling so Fast?

We have seen an emergence of fintech businesses in the last decade, but they are all built on top of the existing finance system. Financial product and service development have historically been a top-down process dominated by a few large financial institutions such as asset management agencies, commercial banks, and insurance corporations.

DeFi is a bottom-up innovation that takes the component of centralized Finance and substitutes human trust with math-based trust, paperwork with smart contracts, legal enforcement with cryptographic enforcement, and third-party audit with open source code and a public ledger.

Additionally, there is the issue of collateralized lending services. DeFi members can borrow up to 85 percent of the value of their deposited crypto instantly, with no credit check and no interest. When you examine the annual rise of premium cryptocurrencies such as Bitcoin or Ethereum and overlay DeFi services, you can grasp the magnitude of the disruption that lies ahead. DeFi promises to be 10x better, faster, and cheaper than today’s financial services.

Decentralized Finance will do to centralized Finance what the internet did to information. Consider how quickly information is shared on social media today around the world. What if money is transmitted at the same rate as trades get executed and settled?

How Does DeFi Work?

Users interact with DeFi through dapps (“decentralized apps“) software. Most decentralized finance applications are built on Ethereum, the world’s second-largest cryptocurrency platform, which sets itself apart from Bitcoin by allowing users to create and execute smart contracts.

Dozens of DeFi applications run on Ethereum, with smart contracts at their core. Ethereum 2.0, a forthcoming upgrade to Ethereum’s underlying network, may help these apps by addressing Ethereum’s scalability issues.

Let’s look at DeFi’s most popular applications and how they work.

• Lending platforms– one of the first and most popular DeFi applications, decentralized lending platforms allow users to borrow and lend cryptocurrencies without a third party. DeFi lending is collateral-based, which means that to get a loan, a user must put up collateral, which is frequently ether, the Ethereum token. That means users don’t have to reveal their identity or credit score to get a loan, which is how traditional loans work.
• Stablecoins– stablecoins are cryptocurrencies designed to maintain a stable value. The most popular stablecoin is Tether, a coin pegged to the US dollar. Tether has been controversial because of its close relationship to Bitfinex, a cryptocurrency exchange accused of fraud. Other stablecoins include Dai, which is pegged to the value of the Swiss franc, and USD Coin, also pegged to the US dollar.
• Decentralized exchanges (DEXs)– decentralized exchanges allow users to trade cryptocurrencies without a third party. DEX is an algorithm (computer code!) that enables traders to trade 24 hours a day, seven days a week. Users not only trade or obtain liquidity through DEXs, but they can also seed this liquidity pool with their assets.
• “Wrapped” bitcoins (WBTC)- wrapped bitcoins are Bitcoin tokens backed by ether and used directly on the DeFi system. WBTCs allow users to earn interest on the bitcoin they lend out through decentralized lending networks.

New DeFi concepts have sprung up around these apps, such as “DeFi Credit,” a way of earning interest on your cryptocurrencies without locking them up in a lending platform. Other DeFi concepts include;

• Yield farming– here, users scan through multiple DeFi tokens in search of prospects for more significant returns like charging interest when they lend idle their assets. In short, it’s a way to make more crypto with your crypto. This is for experienced traders who are willing to risk their assets.
• Composability– DeFi apps are open source, which means that anyone is free to look at the code that powers them. As a result, anyone can use these apps to “assemble” new apps with the code as building blocks.
• Liquidity pools– Any user can deposit their tokenized assets (assets converted into a smart contract) in this pool and earn fees as a liquidity provider, no matter how modest the amount is. Liquidity providers can make benefit from the underlying DeFi platform in addition to fees, such as the interest for lending or governance tokens for the protocol, which have a tradable value.

What are the Benefits of DeFi?

One of the notable benefits of DeFi is that it enables the development of interoperable financial applications on public blockchains. This means developers can build products that work with any blockchain rather than being restricted to a single platform. As a result, DeFi is seeing rapid growth as developers race to create new products and services. Other benefits include;

• Pseudonymous -You don’t have to give your name, email address, or other personal information.
• Flexible– You can relocate your assets anywhere at any moment without obtaining authorization, waiting for lengthy transfers to complete, or paying high costs.
• Increased security– Decentralized applications are much more difficult to hack or steal since there is no central point of failure. This makes them perfect for storing valuable assets such as cryptocurrency.
• Reduced fees– DeFi applications are often cheaper than traditional financial services since they do not rely on centralized intermediaries.
• Increased transparency– DeFi applications are transparent and auditable due to their use of public blockchains. This makes them ideal for financial transactions that require trust.

Why Should You Invest in DeFi?

With global markets volatile and traditional finance institutions giving lower monthly yields, it’s only a matter of time until DeFi becomes a go-to investment option for individuals and businesses alike.

Being an early investor in a large-scale disruption pays out handsomely. Revix (a Cape Town-based investment platform sponsored by JSE-listed Sabvest) has created an easy-to-use and customer-friendly interface to all things crypto to facilitate this early access.

Revix announced a new themed DeFi Bundle on Friday, March 25th, giving customers access to the cryptocurrencies shaping the future of Finance.

The DeFi Bundle encompasses a number of the world’s most popular DeFi tokens into a single, convenient investment. The DeFi Bundle gives you access to cryptocurrencies from the world’s leading decentralized exchanges, loan services, and payment networks.

The Bundle automatically rebalances on the 1st of every month. It buys and sells each commodity to take advantage of the opportunities offered by the most recognized DeFi coins.

This dynamic, fully automated strategy makes investing simple, allowing you to maximize your returns while conserving time.

Conclusion

For many people, decentralized Finance is unsettling since it contradicts traditional government structures. However, the truth is that DeFi is inevitable and will play a significant role in the future of our economy.

Always keep in mind that cryptocurrencies are high-risk investments. You should not invest more than you can afford to lose. You should evaluate your level of experience and investment objectives and, if necessary, seek independent financial advice before investing.

DeFi: Your Window to The Next Financial Revolution

The world of Finance is rapidly evolving. With the rise of blockchain, the technology is going through another revolutionary phase. This is effectively cementing the transformation of the internet from being one of information to one of value. DeFi, or Decentralized Finance, is at the forefront of this transformation. To many, it’s just about providing liquidity, but it’s far more than that.

Since the legendary Medici Bank’s establishment in 1397, the financial structure has stayed intact. On the other hand, financial services remain unchanged despite software developments and the internet. While consumer expectations are shifting, financial institutions have responded with cosmetic innovations such as improved user interfaces and more excellent online products.

In contrast, several other businesses have seen complete disruption, including retail commerce, media, and hospitality. In the generation of rapid innovation, we will also see the traditional finance model giving way to new and better-operating methods: DeFi.

DeFi, or open finance innovation, is the game-changer in financial history. It is the new paradigm for how institutions should deliver financial products and services.

What is DeFi

Decentralized Finance, also known as (DeFi), describes financial applications built on top of public blockchains geared toward disrupting financial intermediaries.

DeFi automates centralized manual, inefficient financial services by converting them into smart contracts, which are blockchain-based applications. For the first time in history, markets do not require centralized financial intermediaries, as smart contracts connect buyers and sellers directly.

Several devastating historical incidents have demonstrated the effects of financial centralization, including the 1929 Black Friday, the 1989 S&L Scandal, the GameStop Stock Scandal, and the 2002.com crash.

Most of us can testify to this from our personal experience with the 2008 financial crisis, triggered by centralized Wall Street goliaths controlling the banking sector and refusing to keep their end of the bargain.

Do you notice the pattern here? Out of greed, centralized organizations have deceived the public, pushing us to invest our hard-earned money only to haul the rug out from under us. This concentration of power creates victims, obstructs accountability, and slows down evolution and innovation.

In a nutshell, the goal of decentralized finance networks is to distribute power among users. It’s a platform that makes financial products easily accessible to everybody without the corruption that comes with a centralized agency. Decentralized money is a game-changing and vital step toward actual financial freedom for the people.

The next step is to create an ecosystem that enables people to use their money the way they want. Imagine a world where you can borrow and lend without going through a centralized authority. This is what DeFi offers: A fair, open, and accessible financial system to all.

Why is DeFi Scaling so Fast?

We have seen an emergence of fintech businesses in the last decade, but they are all built on top of the existing finance system. Financial product and service development have historically been a top-down process dominated by a few large financial institutions such as asset management agencies, commercial banks, and insurance corporations.

DeFi is a bottom-up innovation that takes the component of centralized Finance and substitutes human trust with math-based trust, paperwork with smart contracts, legal enforcement with cryptographic enforcement, and third-party audit with open source code and a public ledger.

Additionally, there is the issue of collateralized lending services. DeFi members can borrow up to 85 percent of the value of their deposited crypto instantly, with no credit check and no interest. When you examine the annual rise of premium cryptocurrencies such as Bitcoin or Ethereum and overlay DeFi services, you can grasp the magnitude of the disruption that lies ahead. DeFi promises to be 10x better, faster, and cheaper than today’s financial services.

Decentralized Finance will do to centralized Finance what the internet did to information. Consider how quickly information is shared on social media today around the world. What if money is transmitted at the same rate as trades get executed and settled?

How Does DeFi Work?

Users interact with DeFi through dapps (“decentralized apps“) software. Most decentralized finance applications are built on Ethereum, the world’s second-largest cryptocurrency platform, which sets itself apart from Bitcoin by allowing users to create and execute smart contracts.

Dozens of DeFi applications run on Ethereum, with smart contracts at their core. Ethereum 2.0, a forthcoming upgrade to Ethereum’s underlying network, may help these apps by addressing Ethereum’s scalability issues.

Let’s look at DeFi’s most popular applications and how they work.

• Lending platforms– one of the first and most popular DeFi applications, decentralized lending platforms allow users to borrow and lend cryptocurrencies without a third party. DeFi lending is collateral-based, which means that to get a loan, a user must put up collateral, which is frequently ether, the Ethereum token. That means users don’t have to reveal their identity or credit score to get a loan, which is how traditional loans work.
• Stablecoins– stablecoins are cryptocurrencies designed to maintain a stable value. The most popular stablecoin is Tether, a coin pegged to the US dollar. Tether has been controversial because of its close relationship to Bitfinex, a cryptocurrency exchange accused of fraud. Other stablecoins include Dai, which is pegged to the value of the Swiss franc, and USD Coin, also pegged to the US dollar.
• Decentralized exchanges (DEXs)– decentralized exchanges allow users to trade cryptocurrencies without a third party. DEX is an algorithm (computer code!) that enables traders to trade 24 hours a day, seven days a week. Users not only trade or obtain liquidity through DEXs, but they can also seed this liquidity pool with their assets.
• “Wrapped” bitcoins (WBTC)- wrapped bitcoins are Bitcoin tokens backed by ether and used directly on the DeFi system. WBTCs allow users to earn interest on the bitcoin they lend out through decentralized lending networks.

New DeFi concepts have sprung up around these apps, such as “DeFi Credit,” a way of earning interest on your cryptocurrencies without locking them up in a lending platform. Other DeFi concepts include;

• Yield farming– here, users scan through multiple DeFi tokens in search of prospects for more significant returns like charging interest when they lend idle their assets. In short, it’s a way to make more crypto with your crypto. This is for experienced traders who are willing to risk their assets.
• Composability– DeFi apps are open source, which means that anyone is free to look at the code that powers them. As a result, anyone can use these apps to “assemble” new apps with the code as building blocks.
• Liquidity pools– Any user can deposit their tokenized assets (assets converted into a smart contract) in this pool and earn fees as a liquidity provider, no matter how modest the amount is. Liquidity providers can make benefit from the underlying DeFi platform in addition to fees, such as the interest for lending or governance tokens for the protocol, which have a tradable value.

What are the Benefits of DeFi?

One of the notable benefits of DeFi is that it enables the development of interoperable financial applications on public blockchains. This means developers can build products that work with any blockchain rather than being restricted to a single platform. As a result, DeFi is seeing rapid growth as developers race to create new products and services. Other benefits include;

• Pseudonymous -You don’t have to give your name, email address, or other personal information.
• Flexible– You can relocate your assets anywhere at any moment without obtaining authorization, waiting for lengthy transfers to complete, or paying high costs.
• Increased security– Decentralized applications are much more difficult to hack or steal since there is no central point of failure. This makes them perfect for storing valuable assets such as cryptocurrency.
• Reduced fees– DeFi applications are often cheaper than traditional financial services since they do not rely on centralized intermediaries.
• Increased transparency– DeFi applications are transparent and auditable due to their use of public blockchains. This makes them ideal for financial transactions that require trust.

Why Should You Invest in DeFi?

With global markets volatile and traditional finance institutions giving lower monthly yields, it’s only a matter of time until DeFi becomes a go-to investment option for individuals and businesses alike.

Being an early investor in a large-scale disruption pays out handsomely. Revix (a Cape Town-based investment platform sponsored by JSE-listed Sabvest) has created an easy-to-use and customer-friendly interface to all things crypto to facilitate this early access.

Revix announced a new themed DeFi Bundle on Friday, March 25th, giving customers access to the cryptocurrencies shaping the future of Finance.

The DeFi Bundle encompasses a number of the world’s most popular DeFi tokens into a single, convenient investment. The DeFi Bundle gives you access to cryptocurrencies from the world’s leading decentralized exchanges, loan services, and payment networks.

The Bundle automatically rebalances on the 1st of every month. It buys and sells each commodity to take advantage of the opportunities offered by the most recognized DeFi coins.

This dynamic, fully automated strategy makes investing simple, allowing you to maximize your returns while conserving time.

Conclusion

For many people, decentralized Finance is unsettling since it contradicts traditional government structures. However, the truth is that DeFi is inevitable and will play a significant role in the future of our economy.

Always keep in mind that cryptocurrencies are high-risk investments. You should not invest more than you can afford to lose. You should evaluate your level of experience and investment objectives and, if necessary, seek independent financial advice before investing.

Last weekend, an outfit called Afterparty set out to establish that NFTs have real-world utility. They held an event named Afterparty NFT Art & Music Festival in Las Vegas, gathering nearly 6,000 people. According to reports, 40 musical acts, DJs, and digital artists were on the line-up. What does that tell you?

NFTs are still gaining notoriety since they exploded out of ether earlier this year. These digital assets sell like the 17th-century exotic Dutch tulips on anything from art and music to tacos and toilet paper for millions of dollars.

The developers of NFTs typically used the same programming like that of cryptocurrency. So why is everyone so eager to jump on the NFT bandwagon? Is it worth the hype, or is it a bubble poised to pop? Here is all you need to know about non-fungible tokens.

What Are NFTs?

Non-fungible tokens (NFTs) are digital assets that are not interchangeable. These digital assets represent real-world objects such as art, music, in-game items, and films. You can buy and trade them online, often using cryptocurrency since they’re usually encoded with the same software as many other cryptos. NFTs include a unique code string kept on a digital ledger known as a blockchain, and their value changes depending on the demand.

In the digital world, NFTs are “one-of-a-kind” assets that may be purchased and sold like any other piece of property but have no physical form of their own. But, anyone can still check out the artists’ work online. So why are people willing to spend millions on an item they could easily download?

Buyers want to claim ownership of the original item, which was previously impossible with digital art before the invention of NFTs in the mid-2010s.

Today, each token comes with built-in authentication, which acts as proof of ownership. The “digital bragging rights” are almost as valuable as the item itself to collectors.

Even though they’ve been there since 2014, NFTs are currently gaining popularity as a popular means to buy and sell digital artwork. Since November 2017, a whopping $174 million has gone into NFTs.

Dieter Shirley, CTO of Dapper Labs, the company behind numerous popular blockchain platforms, told CBS News that “NFTs are the first-way blockchain technology has engaged with many people. With NFTs, we can have meaningfully scarce or unique treasures as part of our digital lives for the first time.”

This stands in sharp contrast to most digital products, which are nearly always available in endless quantities. If a particular asset is in demand, cutting the supply should theoretically increase its value. In short, creators of these types of NFT collections incorporate different traits of varying degrees of rarity further to increase the value and scarcity of their pieces.

Artists worldwide are ecstatic: NFTs allow them to earn significant money from their work, reach a global audience, and link a digital file to its creator, guaranteeing authenticity.

For example, acclaimed digital artist Mike Winklemann, better known as “Beeple,” created a composite of 5000 daily drawings to create “EVERYDAYS: possibly the most famous NFT today, which sold at Christie’s for a record-breaking $69.3 million.

According to Max Moore, who oversaw the first NFT auction at Sotheby’s, “As contemporary society absorbs and integrates technology into every part of life, it’s only natural for artists who are commentators on society to respond and use the media at their disposal to explain what’s going on.” He adds, “I believe it is simply a part of natural evolution.”

Other Summarized Features of NFTs

Non-fungible – blockchain-based cryptographic assets with unique identifying codes and metadata that separate them. Users cannot trade or exchange them for equivalency, unlike cryptocurrencies.

Indestructible– Each token cannot be destroyed, withdrawn, or reproduced because the platform saves all NFT data on the blockchain via smart contracts. The ownership of these tokens is likewise unchangeable, implying that players and collectors own their NFTs rather than the firms that create them.

Verifiable– Another advantage of maintaining historical ownership data on the blockchain is that buyers can trace items like digital artwork back to their original creator, eliminating third-party verification.

How Do NFTs Work?

NFTs get stored on a blockchain, a decentralized public ledger that keeps track of transactions. Most people are familiar with blockchain as the underlying technology that allows cryptocurrencies to exist without a centralized authority.

NFTs are essentially digital versions of tangible collector’s artifacts. As a result, the customer receives a digital file rather than receiving an actual oil painting to put on the wall.

When an NFT is transferred, the blockchain updates to reflect the new ownership. This makes it possible to track the movement of digital assets and prevents them from being double-spent. Each token also has its unique metadata, including the description of the asset, title of a work, and artist’s name.

This data is stored on the blockchain in a tamper-proof way, meaning it can’t be changed or removed without being detected. This makes it possible to verify the authenticity of an NFT and track its ownership history.

NFTs, unlike all other cryptocurrencies, cannot directly be listed on centralized or decentralized exchanges. Instead, users must participate in the listing and selling these assets through custom-built NFT marketplaces. OpenSea and Rarible are two of the most popular. However, other options are available depending on which NFT collection you’re interested in.

Why Do NFTs Matter?

The comparatively basic concept of cryptocurrency has evolved into non-fungible tokens. Modern financial systems include complex trading and lending systems for various asset categories, including real estate, lending contracts, and artwork. NFTs are a step ahead in the reinvention of this infrastructure since they enable digital representations of physical assets.

Artists and content creators have a one-of-a-kind opportunity to monetize their work thanks to blockchain technology and NFTs. Artists, for example, no longer have to sell their work through galleries or auction houses. Instead, the artist can sell it as an NFT straight to the consumer, allowing them to keep a larger portion of the profit.

Additionally, artists can integrate royalties into their programs to receive a share of sales when their work gets sold to a new owner. This is a desirable feature because most artists do not receive subsequent proceeds after their first sale.

William Shatner, who played Captain Kirk in “Star Trek,” entered the digital collectibles market in 2020, issuing 90,000 digital cards on the WAX blockchain with various photos of himself. Each card initially went for around $1 and now generates passive royalty income for Shatner every time one gets a new buyer.

Making money using NFTs isn’t limited to art. For instance, brands like Taco Bell and Charmin auctioned off themed NFT art to raise funds for charity. Taco Bell’s NFT art sold out in minutes, with the highest bids at 1.5 wrapped ether (WETH)—equal to $3,723.83. On the other hand, NBA Top Shot generated more than $500 million in sales in March.

How Do You Buy NFTs?

You can purchase NFTs on Ether, but you’ll need to buy a digital wallet that can hold both NFTs and cryptocurrencies. After that, you can buy NFTs from any online NFT marketplaces, such as OpenSea, Rarible, or SuperRare. When researching your alternatives, keep fees in mind. Most exchanges charge at least a percentage of your transaction when purchasing crypto.

NFT Market Places

The largest NFT marketplaces include;

• Opensea– This peer-to-peer marketplace offers to sell “rare digital products and collectibles.” To get started, create an account and browse the NFT collections. You may also sort pieces by sales volume to find new artists.
• Foundation– In this platform, artists must get “upvotes” or an invitation from other creators to upload their work. Because of the community’s exclusivity and high admission cost—artists must also acquire “gas” to mint NFTs—it is likely to attract higher-quality work.
• Rarible– Rarible is a democratic, open marketplace that lets artists and producers issue and sell NFTs. RARI tokens allow members to select features such as fees and community regulations.

Note: The verification methods for creators and NFT listings vary by platform, some being more strict than others. For NFT listings, OpenSea and Rarible, for example, do not require owner verification. Buyer safeguards appear to be limited at best. Therefore, it’s wise to remember the adage “let the buyer beware” when buying NFTs.

The Future Of NFTs

NFT technology is still in its early stages, and companies and projects are now “throwing things at the wall to see what sticks.” Various situations have employed NFTs, which is essential for any technology’s development. Soon, we should have a clearer understanding of how humans will use NFTs in the future. But, for the time being, we’ll have to settle for NFTs getting utilized in as many projects and industries as possible.

Final Thoughts

NFTs are risky because their future is unknown, and there isn’t enough data to gauge their performance. As a result, treat NFTs the same way you would any other investment. So, do your homework, be aware of the hazards, and proceed with caution if you decide to take the plunge.