Mastering Blockchain

Chapter 7. Decentralizing Finance and the Web

The growing popularity of cryptocurrency, blockchain, and smart contracts has ushered in a number of new use cases that provide specialized functionality, from increased privacy to the creation of a stable payments system to entirely new types of blockchain-based applications. This chapter explores the exciting possibilities being revealed in the realms of decentralized finance (DeFi) and decentralized apps (dapps).

Redistribution of Trust

Although they are trying to innovate, banks today are still slow and expensive. Sending money across borders takes more than a day. And for those who don’t have a bank account, sending money to family or friends living in other countries is costly. With a payment layer that uses cryptocurrency, blockchain can remove intermediaries. Over time, it may also allow users to own their data instead of that data being owned by big technology companies.

Identity and the Dangers of Hacking

Why is it important for users to have ownership of their data? Large companies in the technology and finance space have not been great stewards of data. They have repeatedly been breached, hacked, and otherwise compromised. In many cases they have then attempted to downplay or conceal these breaches, though they have often been caught (and fined) later. For example:

• Yahoo! disclosed 3 billion accounts had been compromised in 2013. It didn’t release information regarding the hack until 2017 and eventually reached a settlement ...