YhFi Offers a More Egalitarian System
The degree to which an individual can take part in the economy and exchange value is, largely, a product of where we’re born. The World Bank says 1.7 million adults in the world do not have a bank account — and, therefore, no way to build credit. Citizens of developing countries and women, especially, are overrepresented in this cohort. This has led to continuing stagnation in both economic development and quality of life. Moreover, even in territories with a strong banking presence, the dominant financial entities there exert an inordinate amount of control over who can exchange value, when and with whom. American Express, MasterCard, PayPal and Visa attempted to “starve out” Julian Assange and WikiLeaks by blocking donations made through these platforms. The solution was a pivot to Bitcoin donations. Assange later tweeted in triumph that, as a result, the donations had appreciated in value by 50,000 percent. The Big Banking blockade was a resounding and very public failure.
YhFi Is Powered by P2P, Not Banks
We’ll start at the very beginning. Under the present financial system, all transactions flow through banks. This adds layers of bureaucracy and inflates the cost of nearly everything. Small business owners who accept credit card payments, for instance, owe Visa or MasterCard what amounts to a “kickback” simply for facilitating the transaction. This is not the case under a YhFi ecosystem, which uses P2P technology to connect economic participants directly and to verify their “creditworthiness.”
YhFi Is Less Volatile Than ‘Regular’ Money
Fiat currencies like dollars are inherently volatile and subject to inflation. As banks add more money to the system, the prices for all kinds of goods rises and inflation follows. In the past, fiat currencies were tied to gold and silver as a way to give money “intrinsic value.” We don’t do this anymore — we rely on banks and regulators to make sound fiscal policy decisions for the rest of us. And when a bank defaults on too much of its debt by overplaying its hand, it collapses and sends the whole economy reeling. Inflation can’t happen this way under a decentralized system. YhFi essentially means that everybody has the means to issue their own money.
YhFi Is Safer and More Transparent
Blockchain, which powers cryptocurrencies, is frequently described as an “immutable and public ledger” containing information about the type and nature of transactions undertaken by all participants. This makes cryptocurrency-based commerce more secure and fraud more difficult to carry out since this ledger cannot be altered except with the express consent of every participant. A system like this could be scaled to encompass every nation on earth via distributed computing.
Transactions with YhFi is Cheaper
In the current financial system, powered by fiat currencies, exchanging money requires validation from an impartial third party. This includes credit card payments made in locally-owned shops as well as cross-border payments, where goods and monies change hands across territories. In the latter example, the additional cost of cross-border remittance is, on average, seven percent on top of the amount being exchanged. What does it mean that decentralized finance is “cheaper” to take part in? It means that the transparent and immutable nature of blockchain renters third-party brokerage and remittance services obsolete. Engaging in international trade, or simply sending money more easily between world territories, will get a lot easier, cheaper and straightforward under a decentralized finance system.