Reading 1.3 Flashcards
3 stages of Financial Services
1) FS 1.0 - traditional financial institutions serve as intermediaries, bring together buyers and sellers to trade financial assets
2) FS 2.0 - Fintech automates traditional financial services, orders placed over a network with financial intermediaries
3) FS 3.0 - DeFi, uses smart contracts on blockchain and provides P2P fin services
WEB 3.0
3rd gen of WWW on distributed ledger tech (DLT) = decentralized interconnected protocols, privacy preserving and blockchain technology
Tokenization definition
Issuing a token that is a digital representation of an asset, secured on the blockchain
Fungible and non fungible
Fungible - indistinguishable from each other and mutually interchangeable (ex USD bill)
Non fungible - unique, not interchangeable (ex diamonds)
DeFi shifts the industry from who to whom?
From “oligarchies” underpinned by fiat currency to digital “cooperatives”
2 classifications of DeFi
1) Contemporary - current state of DeFi - tokenization of traditional financial services
2) Universal - potential DeFi - tokenization of any asset and trading on specialist P2P network
Initial Exchange offering
Public Offering of tokenized securities
Where is financial regulation now and where will it be with DeFi?
1) Now: focuses on intermediaries
2) Future: Focuses on registered platforms
Ownership economy
Economic system in which participants also hold ownership or financial stake in the system
Decentralized data (DeData)
Tokenized data - which addresses society’s concern about issues of ownership, privacy and personal data monetization
Decentralized applications (DApps)
Applications built on Web 3.0 using tokenization, smart contracts, other decentralized computing and storage protocols
Traditional vs Decentralized Finance on
Economy, financial services, assets, money, control, data ownership, infrastructure
1) Corporate economy vs Ownership economy
2) Intermediary-based vs Peer-to-peer
3) Securities vs Tokenization of any digital or physical asset
4) Fiat currencies vs Cryptocurrencies and tokens
5) Big corporates vs Consumers
6) Corporate vs Citizen
7) Web 2.0 + cloud vs Web 3.0 + blockchain
3 stages of DeFi
1) DeFi 1.0 - bitcoin era: basic cryptocurrency transactions, slow, expensive
2) DeFi 2.0 - fintech era: automates traditional financial services using blockchain and tokenization
3) DeFi 3.0 - web 3.0: a future decentralized economy with a system of blockchains and protocols
Crypto coin vs Blockchain token
1) crypto - digital currency (all coins)
2) blockchain token - digital asset created, traded and stored in digital format (meta data)
6 different roles of tokens
1) asset tokens - backed by physical or digital asset
2) payment tokens - crypto coins
3) security tokens - digital shares issued at ICOs
4) Utility tokens - access to a certain blockchain based product or service
5) governance token - decision making rights among token holders
6) reward tokens - rewards for participation
Data economy
Digital environment where data is organized so that is can be bought and sold
Differences between Web 1,2,3?
1) access: read only, purpose: connecting info, content: curated by experts, web type: simple
2) access: read-write, purpose: connecting people, content: blogging and social media, web type: social
3) access: read-write-execute, purpose: connecting vaue, content: peer to peer, web type: tokenized
DID definition
Decentralized Identifiers that enable verifiable, decentralized digital identity of any object
Developed by the W3C (www consortium)
DOI definition
Digital object identifiers - used to identify things on the internet and resolve their location
UOI Def
Universal Object Identifier - all digital and physical identifier - USED IN NFTs
Edge computing and storage
Data is processed on the periphery (users PC) as close as possible to the source of data (instead of a central data center)