A few buzzwords that you could hear or come across on the net in one form or another are AI, Machine Learning, and Blockchain, cryptocurrencies. What do you comprehend by cryptocurrency? Well, this is a form of digitized money – popularly called decentralized money – that has been first introduced in the form of Bitcoin but now has found many sub-names. But is crypto banking a conventional banking’s competition or its ally?
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The extent of the crypto banking popularity is indeed much so the number of daily transactions for many cryptocurrencies is increasing every year. Moreover, the cryptocurrency market which was valued at USD 856.36B in 2018 is anticipated to grow at a staggering CAGR of 11.9% between 2019-2024. The growth tangent that the cryptocurrency market is on begs a solution to “what was the need for cryptocurrencies in the first place?”
Sure fiat money has been serving us well for decades now, but because the technology is pacing forward, so are people and their needs. A speed that traditional banking is struggling to keep up with.
Limitations of Traditional banking
Centralized and Controlled by Third-Parties.
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This is a thing that actually started the whole notion of Cryptocurrencies. The undeniable fact that you have to give all of your assets and life savings to a third-party for safekeeping was beyond the limits of unacceptance for some. The cloud of insecurity hovering over banks was something people desired to avoid no matter what. The mere thought of banks going bankrupt unanticipatedly and individuals losing their money was too nightmarish to ignore.
Questionable Flexibility and Availability.
It can be an undeniable truth that physical banks lack flexibility inside their process. One has to go there first, to the specific bank building, to perform any desired action or transaction. As inconvenient as that is, on the top of it, it’s possible to have to endure hours of frustration by waiting in queues. For someone who is just a working individual, this becomes highly challenging as they need to squeeze their time-table to match this visit to the bank at the lunch hour or make adjustments in the entire day.
Cloud-Touching Interest Rates.
Another concerning and bothersome areas of conventional banking are the over-the-top interest rates. Having gained autonomy to some extent, traditional banks often charge high interest on loans, mortgages, and cross-border transactions. Due to such reasons, individuals were desperately needing another outlet and option that would provide them with the autonomy of their own assets and make the banking process decentralized and out of the get a grip on of the third-party companies.
The fact that the original banking systems amount to massive global debt – $50 trillion – fuels people’s concern that their government-issued money would wash away. Washing away is when cryptocurrencies such as for instance Bitcoin, Ethereum, Ripple, etc came to set…