Blockchain technology has been top-notch, threatening to replace all banking activities with cryptocurrencies. It has expanded its roots into NFTs, DeFi, and other digital assets worldwide. Many projects on blockchain revolve around the problem e face with the centralized monetary system. Now, crypto vs banking has become a big issue, which has even affected the central bank.

The technology became slightly popular in 2007 when many countries were facing an economic decline due to the third parties that get involved as intermediaries. Different banks had large debts. As a result, some governments started minting more currencies to control the rate of inflation. Satoshi Nakamoto saw an opportunity to fund the bitcoin technology, which was a great solution to the worst inflation in the year. 

Bitcoin is fully decentralized; hence no government or company can regulate currency flow. Moreover, the bitcoin source code was open and free to be modified by any experienced developers. He only wanted more people to come up with similar solutions to save the economy of different countries. 

That’s how Crypto came into existence. Currently, the process in Crypto is much more than in banking. Does this mean Crypto could replace the banking system? This question is ambiguous and will need time for more research. Crypto continuous to be modified to offer the highest financial services possible. 

The only worst drawback that crypto experience is the high volatility rates. The data can be gotten at the crypto greed index and fear. Such properties limit Crypto from being employed in the daily running of some activities. But as time goes by, institutions are taking more shares, which means they could possess more power in controlling volatility.

Crypto Vs Banking system

Crypto can be described as digital assets that can be used for exchange, and they function just like traditional money. If you want to buy them, visit the crypto exchange platform like the coinbase, voyager, BlockFi, and many other sites. Then, you open a digital wallet where you keep your virtual coins. Since they are very decentralized, it means they are very secure as they involve less human interaction. According to the data collected in 2021, many people have said that Crypto is the finance industry’s future.

Banking has been there for a while. These large bodies offer various financial services like savings, loans, etc. They are centralized, which means they have large institutions that regulate money inflow and outflow. The government and central bank are among the main bodies that regulate banking activities. 

Limitations of the Banking system

Accessibility

Many bank workers will enjoy their weekends without being involved in any money-related job. This means banks are closed during the weekends, holidays, and even at night every day. So, anyone who wants to complete a transaction cannot do that on time. In addition to that, if you want to withdraw, lend or deposit a lot of money, you have to appear physically at the banking branch to get the service. Such property wastes a lot of time. Sometimes you got the bank, and you have to queue.

Financial inclusion

If the banking organization wants to market a certain product, they will choose a few members for testing. The project is not always available to a large audience which might be biased. The small selected group may enjoy soft loans and lower prolonged payment duration. This results in an unfair system that is not effective for everyone.

Security

Although banks have upgraded to mobile banking activity, saving your money is very risky. These applications are prone to black hart hackers. People lose a lot of money because of malicious activities that happen daily. There is also embezzlement of funds by top officials. So you might lose all the money that you saved for ten years.

Slow transaction & Extra fees

Since a centralized organization controls banks, there are additional taxes and fees during any transaction. When you want to send or receive an amount outside your country, the charges are always set too high. As a result, it isn’t easy to do an international remittance. Sometimes the transaction may delay when they involve a large sum of money.

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Biasness

You must fill out your full name to receive a bank account number when registering an account. This is because it can result in biasness. For example, if an individual hates someone with certain names, they might do something bad. On another occasion, the financial officer may delay many transactions without legit reasons.

Crypto on Replacing Banking System

The main reason for the development of Crypto is to solve all h issues experienced by the banking industry. Developers are creating a more effective ecosystem that is easy to use. Ways in which Crypto may offer better service than the banking systems.

Advantages of Crypto

Decentralized Nature

There is no third party involved in the cryptocurrency systems. Recently, we have seen the US president sign a bill concerning Baptism. However, that doesn’t mean the government will have maximum control despite strict regulations. The decentralized nature reduces human interaction, keeping your money in the safe ledger. Furthermore, Crypto is reliable and is difficult for one to temper.

Tight Security Issue

For sure, any system that involves money must be secure. However, blockchain technology involves a series of harsh algorithms that are hard to break into. Let’s say it’s bitcoin; everything is recorded in ledgers. The system is also unbiased because only two parties are involved in a transaction, the sender and receiver. Although there have been small breaches, Crypto guarantees 90% more security than mobile banking accounts.

Smart Contract

The blockchain network has smart contracts that give computers instructions to process without human interactions. No corruption is involved, which has been a major drawback to most banks.

Many crypto platforms offer a chance for investors to build and grow their coins. So any person having an account can contribute to different tokens hence diversifying their crypto savings. So the issue of leveraging smart contracts is okay. 

Financial Inclusion

Banks have some strict regulations before you open an account. Not everyone can do that at any place. With Crypto, fewer barriers are involved, and within a few minutes, you will have your account with a secure wallet. If everyone gets equal chances and has saving accounts, people could improve the economy of their countries.

Accessibility

Have you ever met a crypto enthusiast and spent a day with them. Those people are always on their phones, laptop, or computers all the time, including midnight. Everything in Crypto is online. The sites and applications run 24/7. Even during public holidays and weekends, the site is always open. This factor makes cryptocurrencies a better choice than banking.

Remittances

Crypto is much faster than the traditional method where people could queue and follow some strict orders when it comes to transaction speed. You can transact a lot of money within 10 minutes, wherein a bank can restrict you. This gives the digital assets a notch over banking.

Diversification

There are over 17000+ cryptocurrencies that possess different features. Therefore, you can decide to invest your money in different cryptos, which is much safer in volatility. Banks, on the other hand, exist in only one form. 

For example, a platform offers simple and better opportunities like the ADACASH. If you want to trade more, Cardano(ADA) has a choice, which offers multiple tokens. Such applications provide large ways to earn more income. In case of a market fall, Cardano still stands strong among the top 10 cryptos in the world.

The centralized bank announced its collaboration with cryptos to create a new digital currency. The old banking system will have to transform and use Crypto if possible. Else, they shall continue to receive much competition as they lose clients. Digital currencies have shown their power to stay. Crypto vs. banking is a debate that can g on for a long, but both sides have advantages and disadvantages. But cryptocurrency shall always stand at the top. 

Many investors have opted for digital assets as others tend to buy more bitcoin as a store of value. In the future, bitcoin could replace gold, but this has been a discussion for a long time. We are moving towards a cashless error where everything will be taking place online. 

Despite that, there is more to be done by crypto developers to swipe all the services done by the bank. The journey is still young, and many institutions are working on research. Many cryptos are also coming p with special features.