The disadvantage of the most common cryptocurrency is that it does not generate any yields per se. However, this partially changes the DeFi and technological possibilities of the Ethereum blockchain.
Bitcoin holders have the option of “tokenizing” their virtual coins thanks to Ethere and then lending them very easily. Of course, for interest reaching several times the current rates offered by banks. And more and more speculators are using that.
In a week, the number of bitcoins lent increased by less than a third to nearly 80,000, valued at $ 800 million.
From the point of view of the total amount of bitcoins in circulation, however, it is still only minor. There are currently more than 18 million virtual coins of the most common cryptocurrency.
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But if you want to play your bitcoins on a banker, you should take into account that this means, among other things, the need to deposit your virtual coins as collateral. Such action goes against, among other things, the still strong ethos of the bitcoin community, which critically assesses any reliance on third parties to cryptocurrencies. “It simply came to our notice then. I think it’s also bitcoin, ” said in an interview for E15 Premium on the topic of DeFi SatoshiLabs boss Marek Palatinus. In addition, experts warn against reckless investments in DeFi.
“It’s still code that, although transparent and open, has a flaw here and there,” Dominik Stroukal, Roklen’s chief analyst, told E15 earlier.
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Dictionary of cryptocon terms Blockchain – a public ledger in which data on virtual currency movements are recorded. It is distributed among a large number of mutually independent computers, which also verify the accuracy of the data contained in it. Therefore, there is no need for a central authority to be responsible for the data in the blockchain. Token – a virtual currency that was created primarily for the needs of one specific project. It works as a game token. DeFi – an abbreviation for decentralized finance, ie financial services that use blockchain and tokens. Due to their technological nature, they do not need classic central control in the form of a bank or office. Smart contract – a virtual contract written in the blockchain, which is automatically activated when the conditions of performance are reached. An example is the accrual of interest. Stablecoin – a virtual currency firmly pegged to the exchange rate of the dollar or other standard currency. As the name suggests, the main advantage is the stability of the value of these digital coins. ICO – The abbreviation Initial Coin Offering describes a forgotten trend where start-ups and other projects offered the public to buy their own tokens. It was another way for entrepreneurs to raise capital. |
