Salvador Casquero, former JPMorgan Head of Scandinavian Interest Rates Trading and Head of FX Sales at BBVA, two of the largest banks in the world, has said that banks have officially lost the race of finance to crypto and rapidly emerging fintech companies.
The rate at which the world's economy is growing yearly is impossible to under-estimate. This makes the need for the services of the various financial institutions of today become particularly necessary and totally important.
Generally speaking, the activities of working for and keeping safe our resources, particularly, currencies is not an easy task. This is the reason for the existence of the government, banks and other well known financial institutions. The most recently evolved being the blockchain!
The financial system has become immeasurably more sophisticated than the early days when banks and other similar centralized institutions were believed to be the systems the world had been waiting for. However, with demands of technological innovations, security advancements and necessary accountability that the world's economy has shown in recent times, it appears that, the primitive use of these bureaucratic middlemen institutions is no longer sufficient to meet the demands of the rapidly-growing world's economy.
It is an undeniable fact therefore, that no form of competition, however, ever existed between the contemporary use of the highly technological and modernize decentralized blockchain systems and the use of the primitive centralized middlemen financial bodies which includes banks and any form of financial institutions that are functionally centralized. In other to justify this claim, we shall make a clear and concise comparison between these two systems along the following lines:
1. convenience of use
2. cost effectiveness
3. security and privacy
4. ease and speed of transactions
1. Convenience of use: The blockchain is closer to you than you can ever imagine! The evolution of the blockchain has revealed how everyone, everywhere around the world can become "their own banks" without having to undergo any unnecessary time-wasting documentation formalities which makes the present banking system particularly tiring to corporate with. Most times, the physical banking structures where important banking activities like saving physical fiat currencies can be done, are strategically located, although, close to many, yet, far away from many other customers.
On a decentralized blockchain system, totally easy banking can be experienced all from the comfort of the users' homes and electronic gadgets. This makes the blockchain closer to its users than anyone can imagine!
2. Cost effectiveness: As a matter of functionality, the present banking system only exits as a middleman between any two people making some sort of monetary transactions. They must be paid for their "indispensable" involvement. Also, for proper record keeping to be achieved, individual customer must be duly recognized by the middlemen financial institutions. Therefore, other payments which come with record keeping, money safety and necessary accountability constitute various automatic bank charges. These overwhelming charges often reveal all sorts of calculations majorly aimed at shortchanging their customers one way or the other. Losing a considerable percentage of your funds to your bank has become a regular practice these days; it should be expected. With the blockchain system, you pay close to nothing on your transactions and absolutely nothing on services like money safety, record keeping and necessary accountability while experiencing a magnitude of effectiveness immeasurably greater than what you get from the present conventional banks.
3. Security and privacy: The blockchain is a system which totally permits "anonymity of users". With the blockchain's technology of security and user privacy, the 44th richest man in the world; Satoshi Nakamoto, has been anonymous for more than 10 years. As against the centralized banking system where all customers are duly registered and their exact funds within any given time, traceable and exactly known and can possibly be altered, the blockchain secures funds in an untraceable and anonymous way. As the banks are prone, to a considerable extent, to astute cyber attacks and physical robbery, the blockchain presents a system where nefarious members of the society tend to lose immeasurably more than they stand to gain in any form of cyber attacks on the blockchain with zero physical robbery possibilities.
4. Ease and speed of transactions: The blockchain technology is just about a decade old and, it is believed by many that the system, with its various advancement of technology, is still at its infancy! The hope in the blockchain and how it will possibly make life easier are high. As of now, the blockchain operates a model of transaction records and execution that is far beyond the operational scope of the other financial institutions. Transactions take milliseconds to complete and are easy to perform by anybody anywhere. Bank