Are Traditional Banks A Relic Or Do They Still Have The Edge? What Is The Effect Of Cryptocurrency At Home And Abroad?
The Internet is overrun with cryptocurrency chatter and blockchain technology babble. There is just no way to ignore the fact that Bitcoin is changing the way we look at the financial marketplace. Always a source of conversation somewhere in the world, at any given time, the topic is assuredly a powerfully divided one. Regardless of where one stands on the cryptocurrency debate, you are sure to have a robust opinion.
Financial Systems Today
Around the world, financial systems principally depend upon the USD. The American dollar is the de facto reserve currency world-side, with just about every global conventional monetary actor operating with US currency. Because of this, any upheaval in the American market invariably delivers shockwaves universally.
The advent of Bitcoin and the other 1,000 plus crypto coins, financial dealings are being reorganized on a colossal scale. These types of decentralized financial transactions are without recourse, in any way, to US currency.
The mechanics of foreign commerce and dealings, diplomacy, along with the influence of monetary sanctions are considerably redefined consequently. So how does this filter down to your local banking institution? Does the traditional way of banking have a leg left to stand on or have they gone the way of the dodo bird? It may surprise you but your local bank, such as OakStar Bank and their traditional style of monetary dealings, still have an edge.
What Exactly is Cryptocurrency?
Cryptocurrencies use something called a “blockchain,” which is a shared public record of transactions associated with a digital token. The digital coin is created and shared according to the agreed-upon guidelines set by the network that created it. Considering the main cryptocurrencies currently in use do not belong to any country, they hold no political bias. This presents the possibility of a decentralized alternative for an international reserve currency, not associated with any state.
Traditional Banks Are Not As Outdated As You May Think
In practice, however, the available uses are somewhat restricted. Cryptocurrency fails to satisfy the fundamental requirements of a stable currency. They are still not widely accepted as a method of payment, even though the number of business willing to use cryptocurrencies increases each year. Bitcoin, for example, can be used as payment for a handful of internet-based purchases, and an even smaller number of actual transactions.
Money, as a form of a commodity in the current economy, can be used to obtain products or services. Additionally, the most significant benefit of money is that it acts like as storage of worth. It is possible to not only use the money to buy and sell, but it can also be saved or stored for use in the foreseeable future.
The sole authority of a cryptocurrency network are the rules on which the most substantial number of owners agree. Therefore, only the bare guidelines of a system are ever enforced. Cryptocurrencies are essential impressive data directories. Further, with the potential for crooks and swindlers to wreak havoc, plus the volatility in the valuation of some cryptocurrencies, traditional banks still hold a strong edge.
It is no longer relevant to question whether cryptocurrencies such as Bitcoin are disrupting the international economic system. On the contrary, it is more how much will they disrupt and exactly how. Time will undoubtedly reveal the distance to which this emerging trend will travel.