DeFi Emerges As Major Economic Force

When the working group that envisioned the idea of a Bitcoin blockchain released its seminal white paper, the possibility of developing apps on cryptocurrency networks was mentioned, but it is difficult to say that the BTC founders would have seen the rise of Decentralized Finance technology and its profound economic impact.

According to a recent report published by Delphi Digital, a company dedicated to the development of advanced DeFi projects such as side chains to complement the Ethereum Network, the advent of DeFi has resulted in a significant increase of the cryptocurrency economy, which now commands a 2% slice of the global economy pie. Virtually all DeFi projects are Ethereum side chains; this makes sense when we stop to consider that the ETH blockchain network is far superior than Bitcoin's, and this is where new tokens and special blockchain apps are being launched. When central banks start using digital versions of their fiat currencies, DeFi networks will be there to ensure smooth exchange transactions.

If we believe that many cryptocurrency networks exist or will exist for a period of years or decades (in fact, it will take the blockchain technologies of Bitcoin and other cryptocurrencies until then), we could easily see the emergence of major DeFi networks in the future.

Bitcoin and DeFi are related in other ways to the core of the world financial world. But even more significantly, these two cryptocurrencies are similar to each other, as well as the rest of the world. They can be used for many reasons and there is a direct correlation between the value and the price of them, but as far as their real world applications are concerned, they are very much alike, except one major difference is that the developers of Bitcoin have decided to use it for the purpose of investing only with fiat currency rather than bitcoin itself.

It could be argued that DeFi, to be successful in being a major economic engine, must be thoroughly developed first. Future DeFi networks would have to easily connect to each other; thankfully, this has already been taking place, and it is bound to continue in this fashion.