Before we dive into Centralized Finance Versus Decentralized Finance in the crypto currency world, let us establish some facts about the main centralized finance or centralized banking system model used in our global society.
In the centralised model of banking, you deposit your money with a company, for example a traditional bank.
Then, when you need to spend that money, you go back to the same company for your withdrawals. Banks can also give loans and manage other aspects of your finances, such as mortgages and investing. However, banks are not perfect.
For example, they can charge fees on top of their service costs if you don’t keep enough of your savings with them.