Blockchain technology has been disrupting the traditional banking system since its inception. It has brought with it a new era of decentralized, secure, and transparent financial transactions. I will touch on reasons why cryptocurrency could replace banks while generally describing both systems.
Blockchain is a decentralized system, meaning that there is no central authority controlling the system. In contrast, the banking system is centralized, with a handful of financial institutions controlling the majority of the financial transactions. This centralized control makes the banking system vulnerable to fraud and manipulation, as evidenced by numerous financial scandals over the years around the globe.
Unlike traditional banking systems, which are centralized and controlled by a few large institutions, cryptocurrency operates on a peer-to-peer network that is not controlled by any single entity. This means that transactions can be made quickly and securely, without the need for intermediaries such as banks.
Also, that peer-to-peer network I mentioned runs on a blockchain which is based on a distributed LEDGER technology that is maintained by a network of computers around the planet. This means that no single human can control the system or manipulate the data, making it virtually impossible to commit fraud or manipulate the transactions.
Be aware that blockchain transactions are extremely transparent and secure. Every transaction on the blockchain is recorded in a block, which is then added to the chain. Once a block is added to the chain, it cannot be altered, providing an immutable record of every transaction that has ever occurred on the blockchain.
In contrast, the banking system relies on a central database to store transaction records. This centralization makes it easier for scammers and hackers to gain access to the database and manipulate the records. Additionally, the lack of transparency in the banking system means that customers have little visibility into the transaction process, making it difficult to identify and prevent fraud.
So, blockchain transactions are faster and more cost-effective than traditional banking transactions. Blockchain transactions can be completed in a matter of minutes or seconds, compared to the several days it can take for a traditional banking transaction to clear. Blockchain transactions do not require intermediaries, such as banks, to process the transactions. Instead, the transactions are processed by the network of computers maintaining the blockchain, making them faster and cheaper.
And yeah, I am aware of the situation where it would cost about 4 Eth to convert a few dollars of Spot to Ampl, but that is an unrelated story for another day. There are efficiency and cost problems associated with some networks like Bitcoin and Ethereum, but there are many more blockchain networks suitable for cheap and efficient global use. I vote that PUBLISH0X replace the Spot token with something more attainable.
The blockchain technology has brought with it a new era of decentralized, secure, and transparent financial transactions. While the traditional banking system has been the backbone of the financial industry for centuries, blockchain technology is quickly becoming a viable alternative for users around the world. The benefits of blockchain technology, such as decentralization, transparency, security, speed, and cost-effectiveness, make it a better choice for financial transactions than the centralized banking system.
It may take some years, but I believe banks will be phased out simply because the blockchain decentralized peer-to-peer networks offer many more advantages that can never be available using the traditional banking systems.
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