Coinbase Says Cryptocurrency Creating ‘Quantum Leap’ in the Functionality of Money
Leading digital asset exchange Coinbase says the growing decentralized finance movement is creating a globally accessible and more open alternative to traditional financial platforms.
DeFi platforms are designed to transform typical savings, loans, trading and insurance practices by offering automated alternatives that remove middlemen and give access to anyone with a basic internet connection.
Coinbase says smart contract-based blockchains, like Ethereum, allow developers to create “far more sophisticated functionality than simply sending and receiving cryptocurrency.”
These software programs are called decentralized applications, or DApps, because they run on blockchain-powered platforms creating immutable records that are cryptographically secured and can’t be manipulated.
The exchange says DApps are different from legacy systems in several ways.
- Business operations are not controlled by a single organization. The business rules are programmed using smart contract languages.
- The source code resides on the blockchain, making it more transparent and auditable.
- DApps are designed to run globally, instead of being restricted to specific locations.
- Most DApps are interoperable with other platforms and permissionless, meaning anyone can contribute to their development.
Coinbase also tracks the emergence of decentralized prediction markets, synthetic assets, token exchanges and more, and says a potential revolution is brewing that could fundamentally change the way we interact with money.
“Something magical is happening in the open financial system — crypto is bringing money online, and we’re seeing a quantum leap in what’s possible when it comes to the functionality of money. It’s a rare opportunity to see an entirely new industry blossom from scratch. The DeFi space will at first play catch up with today’s financial services industry. But over time, it’s hard to even fathom what innovations will come about when the power to build financial services is democratized to anyone who can write code.”
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