Will crypto currency replace banks?

27 feb 2019

According to the modern tendencies our traditional banking system has faced a challenge. The name of this challenge is Blockchain. There are a lot of opinions related to crypto currency future exist. Some experts argue that it is a big soap bulb and all people who invested there money will soon lose them. Other claim that it is a fantastic financial revolution and crypto currency will replace fiat. We can not definitely decide who is right but can introduce you to this issue. The best way is to consider advantages and disadvantages that blockchain has.

But firstly, let us mention what crypto currency is. Simply put it is digital, decentralized currency that based on cryptographic principles for generation, distribution, transferring. There are a variety of coins and every coin has its own type which created to a particular goals. For example, some coins are created to make quicker payments without fees while other are aimed to ensure the operation and development of blockchain technology. Nowadays, this financial structure has a capitalization of $208 370 719 906.

The one important advantage of blockchain is disintermediation. And this opportunity is a direct danger for banking as a main intermediary in circulation of money. New technology allows making transactions without a central administrator. Moreover, such transactions have their own system that which excludes all sorts of financial fraud and money transfer errors.

Other advantages include:

  • The full user awareness of transactions
  • Reliable and available data
  • Better protection of finances from malicious attacks
  • Privacy (unanimous)
  • Great protection against frauds/li>
  • High speed of transactions
  • Lower transaction costs

Of course this technology has some significant disadvantages which cause a lot of controversy and mistrust among financial analysts.

  • One of them is an extreme volatility which is unacceptable for the economy today. The prices of coins vary from day to day and may difference several times per month. Moreover, a lot of coins keep in hands of several people and they can influence the price.
  • Another reason is crime. Criminals use blockchain to make unanimous transactions to hide their illegal activities. Also it is a great way to avoid taxes for business. Nowadays this technology has created a full black market where criminals trade in weapons, drugs and people.
  • Also, there is exists a problem with crypto currency storage. There are many cases when coins have been stolen. It because of people often face difficulties while creating wallets and conduct this procedure improper.
  • Summing up the information below we can conclude that blockchain has chances to replace banking but it is necessary to improve this technology and adapt it to the needs of consumers.