The evolution of technology has divided the world as never before. On the one side, we have an army of technology advocates who want all the traditional systems to be demolished to make way for the new generation breakthroughs while on the other side, we have people belonging to generations X and Y who preferred the use of conventional systems and time-tested methods to carry out the work.
Banks vs. Bitcoin
The same phenomenon we are witnessing in the financial world where there is a huge gulf between technology pursuant and a common man. The best example to depict this divide is the competition between cryptocurrencies and the traditional banking system. Digital coins are the new face of new technology in the financial sector and despite their popularity, which is increasing by each passing day, traditional banks continue to enjoy more trust and reputation among masses. There are a number of reasons behind it, and in this article, we take a look into reasons why banks continue to enjoy patronage from masses over Bitcoin.
Rich Legacy
One of the prime reasons behind the popularity of the traditional banking system is its existence for a longer period of time. Banks have been around for eons, and except for some aberrations, the financial system based upon banks has performed consistently well. This success of the financial system is one of the major reasons why people still prefer traditional Bank for cryptocurrency.
In comparison to this rich legacy, Bitcoin and other cryptocurrencies have just come onto the horizon. They have only started evolving in the last ten years or so, and it will take a long time for them to win the confidence of the masses. The process of evolution and winning confidence is painstakingly slow and Bitcoin has to go the extra mile to gain this confidence.
Stability of Fiat
Another major reason behind the success of the traditional banking system over Bitcoin is the stability of fiat currency. Banks store Fiat currency whose value is comparatively stable and doesn’t fluctuate much. Bitcoin, on the other hand, epitomizes the fluctuation phenomenon of a currency. You can easily estimate the turbulence in the prices of Bitcoin from the fact that in 2017, Bitcoin was worth around $20,000, and just one year later, its price nosedived to $3,400 – a humongous drop in the value. As human beings, it is our natural desire to be in control of the things and this kind of turbulence is one of the most critical shortcomings of Bitcoin and other cryptocurrencies. In order to win over the customers, this high fluctuation must go, and in fact, this is the reason why we see the increasing popularity of stablecoin in the crypto universe.
Centralized Control
Regulatory agencies around the globe are largely against dealing involving Bitcoin and other cryptocurrencies. There is no centralized control over digital coins, which, although happens to be a good characteristic for crypto pursuant, might be a bad indication for general masses who are looking for some insurance for their money from either centralized banks or regulatory agencies. In the absence of any centralized control, people find it difficult to believe in Bitcoin as in case of any discrepancy; they are not sure whom to approach and how to solve it.
Convenience and ease of usage
The liquid nature of fiat currencies in bank accounts means you can spend your money at any point in time and at any place. Whether it is making merchant transactions or stopping by an ATM to fetch the money, the banking system allows you to do all this without any inconvenience. This might not be the case of Bitcoin as the cryptocurrency is not as liquid as money in your painting account. There are a limited number of merchants that accept Bitcoin and although Bitcoin’s adoption is growing at a faster pace, it is still nowhere near the convenience offered by your bank account.
Conclusion
There is hardly any doubt about the utility of Bitcoin and cryptocurrencies in the modern world. Digital coins are revolutionizing many aspects of trading, conducting business, and transferring money, among others, although the system is quite new and will take some time before it gets entrenched in our daily lives. The banking system, on the other hand, has put down their roots into the financial system long ago and thanks to some of its characteristics such as stability of Fiat currency, centralized control, ease of usage and high liquidity make it the preferred system of transactions over Bitcoin. Although, people are getting more interested in Bitcoin and invested in it. You can also invest in Bitcoin through an innovative trading platform – Bitcoin Era. It is a platform which focuses on making profit from Bitcoin. Check Bitcoin Era Review to know further more about it.
