Hanging Out on D’ Block: Blockchain technology for Decentralized Finance
Author: Jason Dookeran
A blockchain is, in essence, a series of blocks linked together. Check our series on blockchains here.
It could also be the neighborhood around the recreation ground where you and yuh pardners does hang out on a Friday night. But we’re focusing on the former, not the latter, in this article.
Investopedia tells us that a blockchain is the basis of a trustless financial system, which is basically what De-Fi is. But what you mean trustless? It means that the only person you need to trust is yourself. Blockchains make it so that nobody can tamper with the records without everyone realizing what they doing. That way, your cocoa never in the sun. 😮💨
Uses of a Blockchain
Blockchains rose to prominence because they’re the backbone of all cryptocurrencies. The thing with blockchains is that they have more uses than just housing cryptocurrencies. The sandwich franchise Subway has already been using blockchain for years to allow them to trace the source of their raw materials. A public blockchain is different from Subway’s in that anyone can create dapps on the chain and monetize them. The most sophisticated blockchains like Polkadot and Ethereum allow almost anyone to write a decentralized app. 😲
What this Means for Us
As individuals who want value for their money, we can quickly spot investment opportunities based on how many dapps a particular blockchain supports. The question of “do you like it” is a big one for investing in decentralized finance. If a blockchain offers good value, it’s probably a good bet to stake your money in it. Hackernoon provides some good insight into how staking works in decentralized finance for those interested in learning more. In the next article, we’ll explore yield farming and what you can do with it.
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