Certified Bitcoin Professional Practice Exam 2026 - Free Bitcoin Certification Practice Questions and Study Guide

Decentralized finance, often abbreviated as DeFi, refers to a financial ecosystem that operates on blockchain technology, allowing users to engage in financial transactions and services without the need for centralized intermediaries such as banks or financial institutions. This framework enables greater accessibility, transparency, and control over financial assets, as it utilizes smart contracts to automate processes and facilitate trustless interactions.

By leveraging decentralized networks, DeFi empowers individuals to lend, borrow, trade, and earn interest on their cryptocurrency holdings directly with one another. This innovation fundamentally changes the traditional financial landscape, promoting inclusivity and reducing reliance on traditional banking systems.

In contrast, other options indicate reliance on intermediaries, regulatory frameworks, or specific applications like ICOs, which don't represent the core concept of DeFi. The essence of DeFi lies in its ability to create a more open, free-market approach to finance utilizing blockchain technology, making the correct choice the one that highlights the absence of intermediaries in these financial services.