Okex is a cryptocurrency exchange platform for buying and selling various cryptocurrencies. Originally from China, with its headquarters in Malta, it is a decentralized crypto exchange and one of the largest in the world. Okex is one of the biggest traders of cryptocurrency. It topped Binance, another cryptocurrency exchange giant in 2018, after handling a staggering 2.5 billion dollars of cryptocurrency trades in 24 hours, making it at the time the world's largest cryto exchange by reported turnover. Okex is a decentralized platform that uses the concept of DeFi i.e. decentralized finance.
What is decentralized finance or DeFi?
We live in a world where the demand and supply of money is controlled and regulated by the big guys such as the government and banks. We're trapped in a faulty system where our banks take more than they give to us. Yes, they shove bits of profits from the money we save with them as interest gained on our savings. But in real sense this isn't any near the fat profits they make when they lend out our fixed savings at high interest rates.
The more frightening fact about this controlled or centralized finance system is that it's prone to inflation because it's backed by a commodity (something you can touch). This affects the purchasing power of your assets. As if that's not all, the lack of transparency in centralized finance system makes it vulnerable to plenty of costly errors. The bulk of this mistakes fall on small investors.
In a DeFi system, otherwise known as decentralized finance system, this isn't the case. In this system, you have absolute control over your assets. There's only one regulator... that's you!
Why is DeFi better?
The aim of DeFi is to remove third-party snoopers like the government and banks who regulate how you get and spend your money. This iin turn gives you full control of all your assets. This is possible because DeFi uses the blockchain technology that's used by Okex and other crypto-exchange platforms.
DeFi is not only used in crypto exchange platforms, it is used in cryptocurrency as well. Cryptocurrencies are decentralized digital assets that can be used as a medium of exchange (for buying and selling) like government issued fiat money such as dollar or euro. Here, users account info are stored in heavily encrypted ledgers or record books referred to as a blockchain.
The most popular cryptocurrency is the Bitcoin, which has been around since 2008.
However, a new crop of cryptocurrencies have emerged known as "Altcoins" or "Alternative coins". Today, there are over 5000 different alternative coins in the market.
Alternative coins or Altcoins: "What you need to know"
There's been a lot of talk about Altcoins or alternative coin and what they're exactly and how they differ from the cryptocurrency Bitcoin.
What are altcoins?
Altcoins or "alternative coins" if you hate acronyms, are cryptocurrencies that sprung up shortly after Bitcoin took over the digital space in 2008. Currently, the number of altcoins in the market is capped at over 5,000. As at February 2020, altcoins account for 34 percent of the total cryptocurrency market, according to CoinMarketCap. They are modelled after the blockchain technology used to design the Bitcoin. But they offer more flexible options and have less limitations than the Bitcoin. They're also inexpensive and consume less mining and computing power than the Bitcoin.
Types of altcoins
It's easy to think all cryptocurrencies like the Bitcoin are solely meant to be mined. While this isn't untrue, over the years altcoins have evolved beyond just mining. Altcoins can be grouped into mining-based cryptocurrencies, stablecoins, security token and utility tokens.
Mining-based cryptocurrencies
These altcoins like Bitcoin are generated through a mining process which involves solving tough mathematical problems on the blockchain to unlock new blocks. The best known mining-based coin is Ethereum as at February 2020.
Stablecoins
Cryptocurrencies are very volatile i.e, their prices are unstable and can rise or fall at any time, which make investing in them highly risky. Stablecoins are altcoins seeking to remove the volatility in cryptocurrencies. This is achieved by tying the value of the altcoin to an existing government issued currency or commodities. Favored backup currencies for the stablecoins are the US dollar, the Euro and gold. Facebook Libra is an example of a stablecoin (although it's development is still in the works).
Security tokens
These are altcoins usually offered for sale during Initial Coin Offering (ICO). They're similar to IPOs (Initial Public Offers) and are usually put out by cryto firms looking to raise money to create a new coin, app or service launches. This is done to attract investors who buy into the offering and receive crytocurrency tokens from the cryto firm.
Utility tokens
Utility tokens are altcoins that can provide a claim on services. These coins can also be sold as part of an ICO. An example of utility token is filecoin. Filecoin can be sold as part of an ICO. They can also be used to get decentralized storage space.
Why altcoins are important?
Altcoins are more appealing because they're cheaper, affordable and are not shaped by the limitations in Bitcoin.
First, bitcoin, generally, is expensive which means only a small fraction of the world's population can get their hands on it. On the otherhand, it's a different story for altcoins. You can buy some altcoins for less than a dollar without breaking the bank.
Also transaction done on altcoins are processed quicker and faster than on bitcoin.Second, altcoins are starting to turn into worthy future investment like the bitcoin. People are starting to find practical ways to turn the worth of altcoins into great rewards so that when they sell, they can sell at a higher price and claim huge profits.