Banking System – Billionaire365

Cryptocurrencies And Blockchain Technologies Challenge The Conventional Banking System

With the emergence of Bitcoin (BTC) in 2009 and the subsequent launch of many other cryptocurrencies, most of them decentralized, essential challenges have arisen for banks. Namely, they work under a fully centralized scheme, which prevents them from achieving the efficiency and convenience of specific functions of this new type of digital assets.

Centralization of banks Vs. Decentralization of cryptocurrencies

If we start from the centralized nature of banks and contrast it with the Peer-to-Peer (P2P) infrastructure of Bitcoin (BTC) and the majority of the cryptocurrencies, the storage of transaction information is the first significant difference between the two platforms.

While banks store all their users’ transactions in large accounting ledgers that remains on the central servers of each bank, the ledger used by the cryptocurrency transactions is distributed, meaning its replicated at each node of the blockchain network.

Cryptocurrencies offer faster transactions in comparison with banks

Another great feat of the cryptocurrencies, in comparison with the banks, is that a cryptocurrency transaction is conducted fast, almost instantly in the case of some cryptos, which is also another advantage of decentralization.

In the cryptocurrencies universe, the transaction takes the same amount of time, regardless of the day of the week, or whether it is weekend or not, but more importantly, for transfers and payments with cryptocurrencies there are no geographical boundaries.

Blockchain and cryptocurrencies can replace banks, undoubtedly

In addition to the advantages of higher availability of information and more autonomy and flexibility in money transfers, since no central body will restrict or control the amounts transferred, cryptocurrencies offer another advantage over banks, namely, the unbanked can access to manage their own finances through this type of digital assets, which also provide the benefit of their total portability.

The crypto wallet is available anywhere and anytime, no matter it is day or night, or weekend. The only condition is to have an Internet connection.

Anna Galvez

Bitcoin and the Banking System – What’s Next?

For a time, some people have thought that cryptocurrencies are amazing and the state of the art and that the fact that the financial system is wary of them and in some cases is even rejecting them show shows how little the financial system knows about trying to adapt and including other forms of payment. However, it now looks like the financial system knew more about the matter and that cryptocurrencies were only suffering from a form of arrogance.

Claims against Lightning

Lightning is a second-layer network that will hopefully bring Bitcoin to the mainstream level. Now we are not exaggerating when we are saying that Lightning is a very complex system that is difficult to explain both to someone with little experience that is trying to understand it and also to someone within the community. However, a claim is going around that states that Lightning is not an IOU. The argument around this issue ill-based and easy to deconstruct, it all fixates on linking this statement with a hefty discussion about how banks employ an IOU system.

There is also talk going around that Lightning has only been created so that the banking industry could have a way to get their hands on Bitcoin and operate it remotely. Yet again, this argument is flawed and far away from the truth. Have we mentioned by now that these two arguments come from an article written by Cryptoconomy where he states his opinions about Lightning? If not, it is only right that we do so because it is not fair that we do not.

One of the last argument of this discussion about Lightning that we would like to state is that Lightning does have the potential to become a worthy competitor to VISA, but that will only happen in the future with the condition that Lightning will be set on a path of constant growth and evolution.

Henry R. Lares

Henry Lares is still early into his career as tech reporter but has already had his work published in many major publications including Tech Crunch and the Huffington Post. In regards to academics, Henry earned an engineering degree from Apex Technical School. Henry has a passion for emerging technology and covers upcoming products and breakthroughs in science and tech.