Difference between revisions of "Decentralized Networks"
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==Notable applications== | ==Notable applications== | ||
| − | ===Decentralized finance=== | + | ===Decentralized finance (DeFi)=== |
| + | Decentralized finance applications use blockchain technology to provide access to financial instruments without the need of going through conventional financial intermediaries such as banks, brokerages, or exchanges. People may trade digital assets on these platforms much like in physical markets. DeFi allows for pseudo-anonymous cryptocurrency trading, market speculation based on derivates, borrowing and lending of cryptocurrencies. | ||
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| + | Decentralized finance operates on smart contracts, which are essentially software made to run on decentralized networks such as the Ethereum blockchain. Since the blockchain is publicly accessible, anyone may audit the smart contracts used in DeFi to ensure it is not malicious. This presents a stark contrast from traditional financial institutions, which typically do not release the source code of banking software, but also presents risk in that security vulnerabilities present in smart contracts may be exploited for individual gain. | ||
| + | |||
====Cryptocurrency==== | ====Cryptocurrency==== | ||
Revision as of 23:10, 26 January 2022
Decentralized networks are systems which inherently have no central authority or governance. These systems often operate on individual computers spread across the globe, interconnected by the Internet, also known as peer-to-peer networking. These computers act in unison towards a common goal.
Computers within decentralized networks are capable of operating independently of each other. As a result, the variety of services and applications built on decentralized networks are often difficult for third parties, such as governments, to shut down.
Contents
History
Notable applications
Decentralized finance (DeFi)
Decentralized finance applications use blockchain technology to provide access to financial instruments without the need of going through conventional financial intermediaries such as banks, brokerages, or exchanges. People may trade digital assets on these platforms much like in physical markets. DeFi allows for pseudo-anonymous cryptocurrency trading, market speculation based on derivates, borrowing and lending of cryptocurrencies.
Decentralized finance operates on smart contracts, which are essentially software made to run on decentralized networks such as the Ethereum blockchain. Since the blockchain is publicly accessible, anyone may audit the smart contracts used in DeFi to ensure it is not malicious. This presents a stark contrast from traditional financial institutions, which typically do not release the source code of banking software, but also presents risk in that security vulnerabilities present in smart contracts may be exploited for individual gain.
