Digital assets: Understanding crypto, blockchain and DeFi

You’ve probably found yourself in a convo about crypto. While crypto is an entertaining topic with many stories of wins and losses, the real gamechanger is blockchain.

The internet transformed how we interact with information. In the “old days” information was the domain of media houses, governments and publishers of reference books and encyclopaedias. Now, anybody with a smartphone and data can access an ocean of info.

In the same way, blockchain technology has the potential to overhaul the world’s financial system.

Here’s what you should know:

What is a blockchain?

A blockchain is a digital book that records the movement of “value”, whether it is money, shares, votes or home ownership. It makes it possible to represent and move these things digitally.

Think of a bank where a clerk keeps records of all the bank’s transactions in a ledger. No one has access to these records except the bank and the client (and only to their own money).

A blockchain stores records across a vast network of computers. Anyone can check the record or transaction. It’s complicated, but the blockchain uses coding and cryptography to keep these records secure and permanent.

The big deal is this: Blockchain lets you move money without a middleman. No single bank or company oversees it.

Say you want to send money to a family member in Zimbabwe. Traditionally, you’d need some intermediary, an app or a remittance service provider, as well as a bank account; the Reserve Bank must approve the transaction, you’d pay fees and you need to wait at least 48 hours for the money to clear.

With blockchain, you can sit on your couch at home, convert your rands into digital money and send it straight to their phone in about five minutes, for less than a rand.

What is decentralised finance?

Decentralisation is a fundamental principle of blockchain. Blockchain technology allows you to convert your paper money into digital money called stablecoins. Stablecoins differ from cryptocurrencies like Bitcoin. They are pegged to a real currency, so their value stays steady. Those wild price swings most people talk about apply mainly to cryptocurrencies.

It’s still early days, but the first rand-backed stablecoin, Zaru, was launched in early 2026 (currently limited to large institutional investors). It works like a digital rand — same value, but it moves on a blockchain. In the USA, you can convert dollars to, among others, the USD Coin.

Let’s say an investor converts R16500 into $1000 in stablecoins. They send $500 to a family member and still have $500 left. What can they do with those stablecoins?

Just as a bank pays interest to “borrow” clients’ savings, an investor could lend the stablecoins on a peer-to-peer lending platform and earn interest. That’s decentralised finance, or DeFi. A financial system without any intermediaries like banks, forex offices, or clearing houses.

Where does crypto fit in?

Blockchain and cryptocurrency are not the same thing. Think of a blockchain as a country. South Africa’s native currency is the Rand. A blockchain also has a native currency – this is its cryptocurrency. For example, Bitcoin (BTC) is the native currency of the Bitcoin blockchain, Ether (ETH) of Ethereum and so forth.

Cryptocurrency is also a type of digital money. Instead of physical cash or coins, it exists only as computer data on the internet.

Most blockchains need a cryptocurrency to run — it’s almost like a toll on a road. The more people use the road, the more the toll is worth. That’s one of the reasons why crypto prices go up and down.

To sum up, blockchain technology has the potential to change the financial system from a web of intermediaries to a straight line between any two people. All you need is online access.