Content adapted from this Zerohedge.com article : Source
The banks enjoyed complete control of the global financial transaction system for decades. They had no competition in moving around billions of dollars each day. Being a trusted third party, institutions like JPMorgan, amassed hung profits. The banking system is such a basic part of our daily lives that nobody could envision life without it.
Enter Bitcoin.
The simple idea introduced by an anomymous programmer created a stir within the established guard of banking. No longer is there an industry without competition. Suddenly, there is an alternative that provides many benefits over the traditional methods of moving money.
Being open 24/7, having less fees, and moving money quicker all provide Bitcoin a leg up over the banking system.
There is also the security aspect since decentralized systems tend not to get hacked. This will only help enhance the trust people have in this alternative system.
How much will this impact the banks?
Authored by Joseph Young via CoinTelegraph.com,
Decentralized cryptocurrencies like Bitcoin and Ethereum have strong advantages over centralized financial systems, primarily because of their ability to function and operate without a single point of failure, which hackers and bad actors can target.
image courtesy of CoinTelegraph
Transaction processing
On Feb. 19, Jameson Lopp, the lead engineer at multi-signature Blockchain security firm BitGo, noted that during a holiday in the US, local banks closed down, failing to provide financial services to individuals and businesses that could be in urgent need of financial settlement services to process payments.
Today is a holiday in America - the banks and markets are closed. Meanwhile Bitcoin soldiers on, with over $1B transmitted and $7B traded today. pic.twitter.com/HetG9kES7I
February 19, 2018— Jameson Lopp (@lopp)
Meanwhile, Bitcoin, as a peer-to-peer (P2P) settlement system, was able to process over $1 bln worth of transactions, and more than $7 bln worth of Bitcoin was traded on a single day. Regardless of holidays and weekends, users of Bitcoin and other cryptocurrencies like Ether can freely transact on a peer-to-peer basis, through the utilization of wallets.
Non-custodial cryptocurrency wallets enable users to remain in full control over their funds, by only allowing users to gain access to their private keys and no other centralized entity or platform. As such, Bitcoin wallets like Blockchain, Trezor and Ledger cannot refund transactions or recover user accounts once the private key is lost, encouraging users to be more financially aware and responsible.
As emphasized by Bitcoin analyst and RT's Keiser Report host Max Keiser on several occasions, financial freedom and independence provided by Bitcoin and other cryptocurrencies in the market are largely beneficial and crucial for individuals and businesses operating in regions wherein government entities control banks and financial institutions.
Importance of financial freedom
Last year, Saudi Arabian billionaire Prince al-Waleed Bin Talal was arrested by the government of Mohammed Bin Salman, who is expected to take control over Saudi Arabia and become its ruler, as the most powerful figure in the Middle East. The government of Salman initiated an anti-corruption purge, arresting 11 Saudi princes and 200 businessmen.
At the time, The Wall Street Journal reported that the government of Saudi Arabia had asked $6 bln for the freedom of Bin Talal, who has garnered a net worth of over $25 bln from his investments in Twitter ($300 mln), CitiGroup ($550 mln), AOL, Apple, MCI, Motorola, Fox Broadcasting and many more.
On the Keiser Report, Keiser criticized the previous remarks of Bin Talal, who had called Bitcoin "Enron in the making."
"It just doesn't make sense. This thing is not regulated, it's not under control, it's not under the supervision of any central bank. I just don't believe in this Bitcoin thing. I think it's just going to implode one day. I think this is Enron in the making," said Bin Talal on CNBC's Squawk Box.
Criticizing Bin Talal, Keiser stated:
"He said Bitcoin was no good because there is no central government and no central bank. And then a week later, the central bank and the central government rips out all of his net worth. If he had them in Bitcoin, he wouldn't have that problem. He is like a poster child for why you should buy Bitcoin. Anyone who is thinking about should I buy Bitcoin, look at [Talal] sleeping on a mattress of a rich hotel under house arrest. Furthermore, he is overrated as a money manager."
In November 2017, the Saudi government cracked down on private bank accounts and froze the accounts of prices and businessmen. Keiser noted that could have been avoided if the wealth of these individuals were stored in a decentralized store of value, like Bitcoin.
Potential of cryptocurrency in offshore banking
The offshore banking industry, which is dominated by influential financial institutions like JPMorgan, is structured around large banks that are able to clear big sums of money in an efficient and secure manner. But, the transfer of millions to billions of dollars require significant manual labor including transaction verification, Anti-Money Laundering (AML) checks and payment clearing.
Cryptocurrency-focused hedge fund Blocktower executive Ari Paul stated that cryptocurrencies have the ability to address the offshore banking industry that supersedes that of major banks:
"Cryptocurrency is trying to be the offshore banking system, I think. At least some of the cryptocurrencies. Most of the financial luminaries, I think genuinely, don't understand what it's trying to be. Jamie Dimon is an exception. By all accounts, I know people who spoke to him about cryptocurrency four years ago before I was really in the space. He understands it. I think he sees it as a competitor against JPMorgan," said Paul during an interview with Business Insider.
Regarding transaction settlement, offshore banking, and financial freedom, centralized systems of banks fall significantly behind major cryptocurrencies, which can offer all three services with low costs and a robust infrastructure.
Conclusively, cryptocurrencies like Bitcoin and Ethereum have significant advantages over banks in a number of areas, including security, borderless transaction settlement, efficient payment clearance, and lack of dependence on centralized service providers or entities. Although the offshore banking industry is valued at $32 tln and the valuation of the cryptocurrency market remains below half a trillion, the above-mentioned advantages could allow cryptocurrencies to compete against banks across many sectors.
Non-adapated content found at zerohedge.com: Source
You should expect the institutionalised banking system to fight back their competitors. But, am sure in a few years to come this fight and EUD will be over and we know who the winner will be.
It`s a matter of time for banks to go out of the business
Decentralization is a very powerful feature, I think underestimated by many. Everyone is looking for coins that 'can do things better', but the degree of decentralization is way more important. This makes me believe Bitcoin is the biggest opportunity of all.
Prince al-Waleed Bin Talal must be punching himself in the face whenever he thinks of the statement he made criticizing bitcoin. He's indeed the perfect example to use over the dangers of centralized financial systems.. This is your money that they control, something decentralized financial systems have changed. If it's money that you worked hard for, then it's you to be in charge.. not letting a system that didn't have a hand in your hard work to get this money to control it. In cryptocurrency no central authority has control over one's finances, and so a bank can’t take it away from you. Am glad cryptocurrency is rapidly gaining ground as more and more people are getting to a better understanding of its use and value in the public eye. These decentralised financial systems are so efficient that one only needs access to the internet and mobile phones to transact.
Great information thanks for sharing I did not know about this keep it up
Importance of financial freedom thats great keep sharing
I have always been a advocate for decentralized banking it is how it always should have been.
bitcoin is one of the biggest opportunities since the invention of the internet itself.... great times to be around....
The banks will be forced to adapt to the changes they can only fight for so long
Adapt? They will be completely out of business as transactions in the future will be with cryptos.
Very nice. bitcoin ethereum.cryptocurrency post this post to you for thank you very much and post like I post vote and comments and post share and follow-I, so that as this post all see and this post to everyone can vote
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Crypto currency coins will continue to evolve with many flavors developing and most being issued will be stillborn at birth because of the lack of development skills behind them and a high level of scam type personnel initially backing many coins. An increasing amount of users will support crypto currency because many centralized fiat money supply decisions are too arbitrary and are not consumer friendly in the long term. Many governments restrict the amount of money you have, the amount of wealth you have, the type of assets you have, the type and amount of money you can spend on anything all the time. If you look at the United States over the history of the country it has made use and possession of several items illegal over the past 200 years that made people lose their fortunes and made them poor. Remember when holding gold was illegal? Or alcohol? Or various type of food or drugs? Remember that giving or sending large amounts of money to someone else is restricted or illegal unless you give over half of the money to the government? Remember that sending money or assets across borders from one state to another or one country to another is illegal or restricted? Here is the big surprise to all the people in the world is that almost of of these bad rules are still in effect. All the governments are trying to watch you all of the time even when you simply want to buy some piddling amount of food or anything else for that matter. They all want to control you and pay them for living and not because they are giving you some benefit. Crypto currency is simply another option people are attempting to use to make their lives more tolerable because the financial industry and the governments don't have that priority in any of their mission statements as to why they exist.
If there is no bank how you dilute bitcoin?
great post
This is what people need to realise when they listen to the likes of Jamie Dimon talk, his opinion is being formed by the threat to his business.
Decentralized finance is paving the way to political freedom as well. Soon enough our local politics will be truly democratized due to blockchain.
I just posted a proposal for a blockchain app that allows communities to allocate municipal bonds in the form of a neighborhood-specific crypto coin to each resident in the community, who then create and vote on proposals for neighborhood improvement projects (the winning proposal would then use the crypto to execute the project, sort of like GoFundMe).
I would love your input and feedback since I have no idea what I am doing but I believe blockchain will be the future of community building.
https://steemit.com/blockchain/@tidnull/ut-arlington-s-engineering-challenge-my-proposal-rough-draft
Wow! That's very interesting of cryptocurrencies, also more grease to Biticon .l must say is very nice 👌 because people are always interested in investing and saving money with full assurance of security, I must say cryptocurrency will push forward with this strategy they have over banks especially that own by government, that will wake up and declare holiday , without caring that people needs to carry out some trade and financial transactions