Many have asked, what is the difference between traditional, centralized and decentralized finance? And if DeFi just a fad or here to stay?
In today’s digital age, new technology and innovation have enabled new and more efficient solutions and processes for old existing services. As new systems emerge, it is challenging for users to understand the differences, therefore shunning the inevitable change only to miss out on early adopter benefits.
To clearly see the evolution of the financial system from TradFi to CeFi, and soon, DeFi, we take a journey back through history. Here, we compare the advantages and disadvantages of each system to understand why DeFi provides new irreplaceable value and is here to stay.
What is Traditional Finance (TradFi)?
In ancient markets, people bartered for goods using shells or beads as a medium of exchange, where people come to a mutual agreement for exchange such as tomatoes for meat....