The word was never the same in 2009 when Satoshi Nakamoto revealed his plans for a digital coin that would be based on everything the current currencies lacked.

Bitcoin today has fundamentally changed how financial systems work. Based on an innovative data maintaining technology, Bitcoin offered cheap, economical, swift and highly secure means of transferring value of money from one person to another.

However great it is,Bitcoin was never intended to act as a whole replacement to thecurrent economic and financial setup, just as a digital currency.Today, people all over the world have realized that blockchain, thetechnology behind all cryptocurrencies, has a lot more potential inday to day finances and money matters.

Amongothers, Decentralized Finance, or DeFi, as it is known,is a phenomenon in which the power of decentralized networks isleveraged to transform traditional financial products into thedistributed data age. The networks create a trustless environmentthat does not require any middleman such as banks or other financialinstitutions.

In the last couple ofyears, DeFi has risen to prominence. The concept started during theheydays of the last crypto rush, where thousands of platform werelaunched to serve a variety of purposes. One of these services wascreating decentralized banks and financial firms. Today, people havethe option of obtaining loans, creating savings accounts and tradeusing DeFi services.

DeFi have become extremelypopular due to the advantages offered:

DeFi seem to be the bestthing that can happen to people in general. However, it is notwithout its risks. With hundreds of DeFi platforms, a person may notbe able to find the right services desired on a platform he or she isregistered on. The tokens used have price volatile in their nature,leading to a possibility that the token held, bought or lent willdevalue.

In the end, where DeFi hasrisks, it offers enormous benefits to the public.

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The Rise of DeFi, Potential and Risks - FinSMEs