As highlighted in the white paper on bitcoin published in 2009, Satoshi Nagamoto’s invention of bitcoin, however, had a compelling goal. Eliminate the need for reliable third parties and enable both parties to be willing to transact directly without being affected by the weaknesses of the trust-based model.
But why? The reason is that modern banks have shortcomings and disadvantages, the consequences of which are ultimately felt by the consumer. Due to their centralized nature, they are subject to human intervention. They can be unreliable, prone to security threats, insane charges and biased.
It is because of these precise problems and weaknesses of the current financial systems in the world that cryptocurrencies will pave the way for a better banking and payment experience in the future.
Traditional centralized banks may be unreliable. If you use mobile banking and their servers are down, you will not be able to access your funds unless you go to a local ATM and withdraw cash. The problem here is that ATMs are out of service, especially for people in developing countries.
Imagine the trouble you have to overcome. If you are in a situation where you feel time, even if you need money, your bank’s mobile application is ‘under maintenance’. This is unpredictable, but it also worries many people. It is paradoxical that you hand over your money to the banks and instead they become the guardians of your finances.
On the other hand, cryptocurrencies use automated systems that do not exit the service. Therefore, you can access them at any time of the day, including weekends and holidays.
Today, cryptocurrencies are usually purchased at cryptocurrency exchanges and stored in secure and secure crypto-wallets such as metamask or ledger. These digital currencies are decentralized and operate in a highly secure manner. All you need is your computer or your mobile phone and internet connection.
According to the Federal Bureau of Consumer Protection, banks earn more than $ 15 billion a year in overdraft fees. That’s $ 15 billion from the pockets of hard-earned people to their pockets. Overdraft fees should be illegal at this point. With an overdraft fee, a simple cup of coffee can go from $ 3 to $ 35.
The charge to worry about is not only that; Charges can take many different forms, including late penalties, income, ATM usage outside the network, money transfers, inactivity and international remittance fees.
When a person needs customer support, he or she may be charged for seeking help from a real person. Cryptocurrencies, on the other hand, do not charge you many fees for transactions.
The most common fees for trading in crypto are called gas bills, which are basically the reward paid to miners for making transactions on blockchain or executing alleged transactions.
Transactions can take an eternity
In centralized banks, transactions can take a long time depending on the type of transaction. For large sums of money or international payments, this can take a week or more. At first this may seem right, but what if you are in a situation like the Ukraine-Russia war. You don’t have a week, you have minutes.
Unlike traditional banking systems that follow codes and protocols, cryptocurrency transactions are much faster. As a result, cryptocurrency can handle more transactions per day than traditional banking systems.
This capability elevates them over banks because they provide the best opportunity for rapid expansion of the economy. Cryptocurrencies have no trading hours and are available seven days a week, 24 hours a day.
Consequently, cryptocurrencies are proving to be important in creating the post-bank, post-cash financial era.
Banking transactions and financial services are dependent on account numbers and personal information, so they are open to affiliates. In the event of a dispute with the officials of a particular bank, the financial services officer may deliberately delay the transactions or badly freeze your assets. Every month, thousands of people freeze their lifetime savings through banks and transactions.
Modern centralized banks take into account your demographic data, background information and spending habits. Believe it or not, the way they treat customers can sometimes be compromised by their data. But it can be bad; Banks can arrest their own customers.
In late 2021, 23-year-old Joe Moro was arrested for allegedly refusing to cash his check after the US bank racially explained his check, claiming that the paycheck was fake. Sure, Joe Moro got his justice and got a solution, but that doesn’t change the fact that centralized banks can be vulnerable to making bad decisions through a simple human bias.
Cryptocurrencies are completely free from the control of third parties. This decentralized nature minimizes human interactions, which frees them from dependence. Cryptocurrencies do not value or profile you, centralized banks do.
Many sites today share your data with third parties. But a social media site collecting your data is one thing and bank collecting important information such as passport or ID information, residence address, SSN and employment information is another.
Banks need this type of information because they operate on a trust-based model or with specialized mechanisms needed to respond to a particular threat profile.
Instead of regretting that DickTalk or Facebook misused or sold your data, the real culprits here are the centralized banks. Purchases show where you are, what you like, and more. Centralized banks may share your personal and sensitive data with their subsidiaries or partners or third-party buyers.
Banks not only steal money from you, they also make money from you. If you can not even trust your personal data or money to be taken care of, how can you trust the banks?
Banks face an average of 85 serious cyber attacks a year, and one-third are successful, according to a study by Accenture. Skilled hackers and engineers can hack many web sites and mobile banking applications. As a result, some people may lose large sums of money from their accounts or be fraudulent.
Organizations are prone to fraud and especially money laundering. Thus, there is a loss of hard earned money. Now with crypto, due to its decentralized nature there is no central power and the chances of such threats are low.
Instead of relying on a central power source, crypto relies on a worldwide distributed computer network. Crypto is highly secure and reliable, as it uses anonymous ID numbers in transactions.
There is always some potential for fraud or security risk, whether it is centralized or decentralized. However, when it comes to dealing with people’s finances, privacy and data, people are more likely to choose machines than humans any day.
With the power of cryptocurrencies, people do not have to suffer from the shortcomings of the modern financial system. Overall crypto is still in its infancy and millions of people are already benefiting from the benefits of cryptocurrency and blockchain. People deserve better.