Protocols – Forex Academy

Introduction

When you hear the word ‘cryptocurrency,’ Bitcoin is the first thing that pops into your mind. For the longest time, bitcoin has been synonymous with cryptocurrency and regarded as the future currency. In the recent past, bitcoin’s monopoly has been diluted by the entrance of thousands of other cryptocurrencies.

The cryptocurrencies’ primary objective was to serve as an alternative, and down the line, a replacement to the global fiat financial system. This objective has failed to take off. This failure can be attributed to the skepticism cryptocurrencies have faced, which has slowed their role as a legitimate alternative to fiat currencies. DeFi has helped address some of these challenges and help make cryptocurrencies mainstream.

What is DeFi?

DeFi is the short form for Decentralised Finance. At its core, decentralized finance is the provision of conventional financial services on platforms built on the public blockchain. Specifically, DeFi is based on the Ethereum blockchain platform.

DeFi is heralded as the most suitable alternative to the global financial system. This new enthusiasm about the decentralization of finance is owed to the fact that DeFi is seen as being able to solve the problems that bitcoin failed to solve.

Advancements Made by DeFi

Here are some of the advancements made DeFi, which bitcoin failed to achieve.

Creation of issuance and investing platform

These platforms operate like an ordinary stock exchange. DeFi has made it possible so that cryptocurrencies can be issued and traded like conventional financial securities. The platform brings together broker-dealers, legal advisors, and custodians, who will advise issuers through the process. Furthermore, the platform also makes it possible for asset and investment managers’ proliferation for crypto-based financial assets.

Establishment of a decentralized prediction market

A prediction market is one where individuals can bet on any future occurrences. With decentralized prediction markets, there is no form of censorship whatsoever. Therefore, it offers an incredible opportunity to hedge against future risks financially and speculate on all forms of social events globally.

Growth of open lending protocols

Decentralized open lending championed by DeFi involves the following: collateralization of cryptocurrencies; elimination of credit checks among borrowers; lending and borrowing of cryptocurrencies for trading purposes; and real-time settlement of transactions. The financial inclusion resulting from open lending is unparalleled.

Facilitated the issuance of stablecoins

DeFi made it possible for the issuance of stablecoins by facilitating the auditing of crypto reserves and ensuring manageable volatility of such cryptocurrencies. With DeFi, stablecoins can be pegged on another asset. Categories of stable coins that have been spurred by DeFi include crypto-collateralized stablecoins, fiat-collateralized stable coins, and non-collateralized stablecoins whose stability depends on an algorithm controlling the expansion and contraction of its supply.

Bottom Line

DeFi undoubtedly offers a higher potential for financial inclusion, censorship-free transactions, and improved privacy. Although DeFi is offered as an alternative to the centralized financial system, it is almost impossible to envision an economy where the centralized financial system ceases to exist. Thus, it is prudent to co-mingle the two systems to ensure complementarity, which will tone down the inherent risks associated with either system.

Introduction

An efficient file storage method, decentralized file-sharing uses multiple nodes to store files instead of using a single centralized server. With the growing complexities on the internet due to the increasing rate of web data and files communicating through HTTP, it has become highly essential to use an efficient method to store data. When the online traffic is increased, the volume of information to be transferred mounts up automatically. As a result, if we want to transfer large files, we will need more bandwidth.

What Are The Issues And How Decentralized File Sharing Helps?

Addressing all these issues, decentralized file sharing emerged as a robust solution. Torrenting was the best solution for sharing available to the general public. It is used to transfer larger audio or video files over the internet without getting hampered by the challenges of HTTP. However, there were some drawbacks to the file-sharing protocols wherein the volunteers can restrict the services and disable the nodes that can limit the transfer.

With the help of blockchain technology, the decentralized file-sharing networks can be made robust. With this file-sharing network, users are provided with incentives for their contribution. This helps in ensuring that there are enough nodes to fuel the network.

The Potentials of MultiChain File Sharing

Multichain refers to an open-source structure, which enables users to deploy private blockchain for any enterprise. MultiChain supports Mac, Linux, and Window servers and offers a streamlined API as well as Command Line Interface.

This framework addresses the issues of privacy, openness, and mining through integrated user permission management. MultiChain is essentially a permission-based private blockchain that allows nodes to join and form a network. By enabling teams to create a well-integrated and secure network, MultiChain facilitates an efficient way of file-sharing.

Security Levels of Blockchain File Sharing

In the blockchain, we get enhanced security in file sharing. This technology offers multiple levels of security, including:

AES key encryption with RSA enables file access to merely by the receiver. Even if the files are accessible at all blocks, only specific receivers will have access to the file.
Files of equal size are divided and encoded through Hex encoding, which proves to be a potential way of sending files in the streams (blocks).
This is the most vital, powerful, and the highest level of security. Blockchain network offers the highest level of security by ensuring the fact that a file transfer occurs when all the nodes approve it within the network.
All nodes can certainly see when a transaction is happening between the senders and receivers without interfering with the process. The security level offers a guarantee that merely legitimate files can be transferred via the network.

The Bottom Line

By harnessing the full potentials of decentralized file sharing, we can enjoy stress-less and efficient file transferring that is not dependent on the nodes. Blockchain technology is an emerging technology that can make the file sharing process streamlined and more efficient. The above mentioned were some key highlights of decentralized file-sharing that we need to understand.