Will cryptocurrency replace the banks? written by: Grefein Will cryptocurrency replace the banks?
Trade and banking have been around for many years now. However, the mode of exchange ” currency” has always been changing. In the ancient ages, people traded goods for goods. The tradition evolved to goods for gold and silver, and today people use flat currency. An example of flat currency is the American dollar, where government printed notes are used as the standard rate for exchange. The flat currency is not static in value, for instance, the amount of goods a dollar could buy ten years ago is not the same today. Another important factor to note about flat currency is that it has no global standard. The American dollar, some will say is used as a global standard, but then the dollar is vulnerable to drastic changes due to economic factors. One constant factor throughout time is banking. The banks have always acted as middlemen between people their assets and their money.
The coming of digital currencies” cryptocurrencies” has entirely shifted the balance of power in the business world from the banks to the money owners. While banks controlled the traditional money market, the digital currency world has no place for banks. In the digital currency world, money can be transferred from one person to another without the need of a middleman. Furthermore, digital currency can be used in the trading of stocks and accumulation of interest. For instance, a person who owned $100 worth of bitcoins one year ago, would cash thrice the same amount today. This makes cryptocurrency much more profitable than any bank interest rate.
Will Cryptocurrency Replace Banks;
Now, when it comes to the question of cryptocurrency replacing banks, there are a lot of dynamics to be looked at. Let’s look at what happened to the post office with the coming of emails. It ends up that, the post office became useless since everyone would send an instant mail without having to pay for a postage stamp. However, the post office still exists forty years on after the discovery of the email. While the post office may not be used as much, several aspects of the world will not run without a physical post. The same issue applies to crypto currency and banking.
For cryptocurrency to replace banking, the crypto currencies will have to replace flat currencies.Here is where the major problem lies, while a larger percentage of the world is now shopping online, the number of peop[le who are not ready for online shopping is also enormous. Online shopping and cryptocurrency may be feasible in many developed countries, on the other hand, underdeveloped countries may not be able to achieve that goal sooner.
Another big problem is the local economy, While most of the large and well-established cooperations may easily deal with cryptocurrency as a form of exchange, the small coffee vendor may find it hard to incorporate crypto to their business.
To answer the question of whether cryptocurrency will replace banking, the answer is yes. Slowly by slowly, more people will desire to have more control over their money. As time goes by, many banks will lose their major clients and find it hard to exist in the market. However, those who are wise in the banking industry are taking control of the cryptocurrency market while they still have muscle power.