Kimberly Rosales explains the role decentralized finance is playing in changing the financial space


The technological environment is transforming the financial world. According to the Central Bank of Argentina (BCRA) Financial Inclusion, more than 85,000 transactions per adult using electronic payment methods, such as digital transfers and debit cards, were made in June 2021. The total transactions increased by 40% compared to the same period in 2020. Kimberly Rosales, expert in digital payments, explains how decentralized finance (DeFi) can become the solution that promises to solve the problems of the current system.


This development is still within the conventional finance ecosystem, which is made up of financial institutions, such as banks, stock exchanges and brokers, which allow lending and borrowing of money and the exchange of financial assets. . The real change will come with DeFi, which includes the use of blockchain and other IT-based processes that are set to revolutionize the industry.


For Rosales, DeFi is a circuit of financial products that use this new technology and others such as cryptography, consensus algorithms, peer-to-peer systems and smart contracts to avoid having to rely on an entity. central as those that predominate in the conventional financial environment. This is only possible through the use of decentralized applications (DApps), which are nothing more than programs that do not depend on a single counterparty interacting with a central server, such as WhatsApp, Instagram, YouTube, Twitter and virtually any conventional application. today.


Since there is no company, no central entity, that needs to verify the sending or generation of transactions, each of the DApps users acts as a node in a decentralized network of transactions, explains Rosales. Then, in this way, it is verified and assured that the transactions made through these DApps are authentic, original, all in a highly private environment.


The expert points out that all these DApps have the ability to interact with each other, forming a kind of, as it is called in the industry, Lego money. Rosales also points out that what DeFi does is try to ensure that financial processes such as the exchange of assets, money and loans are automated in a blockchain through a series of business rules that dictate how the entire operation of these markets is going to be Gone.


In this context, she specifies that there is not quite a team, a company, behind it, because this software directly connects the parties entering into the transaction. At first glance, it might seem like DeFi doesn’t bring much more than IT change. However, proper implementation could have a very positive impact on the company’s economy.


First, Rosales points out that all transactions and transfers of value made in the DeFi environment are public and verifiable, which provides unprecedented transparency, which translates into high security and reliability. The specialist maintains that the fact that the exchanges are visible and exposed allows any user to verify them in the same database which interprets them in encrypted form. In addition, only the public addresses where the assets forming part of each transaction are hosted are disclosed, so that the parties maintain their confidentiality.


On the other hand, since it is a solid construction of computer codes that automate operations, the risks are only found in failures or vulnerabilities, but not in the system itself, which guarantees the efficiency of exchanges. Likewise, the ecosystem is very efficient because it is highly interoperable and dispenses with financial intermediaries.


The ability of DeFi to cross borders is linked to the lack of central counterparties tied to the rules and laws of each region, as well as the proprietary systems they must use. If I have an internet connection and I’ve been trained in how these things work, I can use any of these apps without anyone being able to censor me and on equal footing with whoever is in New York, London, Singapore or any financial center country, explains the expert, referring to the fact that it is not necessary to be in a privileged area because the DApps are global.


Specifically, the big change brought about by the advent of decentralized finance is the greater financial inclusion that will take place in the world. Rosales concludes that DeFi’s potential for inclusion is spectacular and offers literally everyone the opportunity to participate in the financial system.


About Kimberly Rosales


Kimberly Rosales is an entrepreneur and tech enthusiast who early on understood all the capabilities that cryptocurrency had to offer. She founded ChainMyne, a FINTRAC-registered company, in 2020 to provide an easier method of accessing digital currency, as well as empowering cryptocurrency holders. While the majority of her time is taken up with keeping her business activities running smoothly, when she has free time she enjoys spending time with her family and exploring new places.

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