Highly complex are the source codes and technical control to help and secure crypto currencies. Laypeople, however, are more than able to understand the basic concepts and become educated users of crypto currency.
Functionally, most currencies on Bit coin, the first commonly utilized crypto currency, are variations. Unlike traditional currencies, the express value of crypto currencies in units you can say, for example, I have 2.5 Bit coin, as you would say, “I have $2.50.” Many principles regulate the ideals, safety, and honesty of crypto currencies.
Implications for banks
There has been a major shift in how people are able to do business and make transactions. Instantly, the value can be exchanged in the flash of a cell phone outside the larger banks.
Individuals who, ten years ago, have been unable to access trade and finance can do so today, with platforms like Bitcoin Era (Read the Bitcoin Era Review). This will lift many out of poverty. “This is a key point if they need support, people would no longer have to go to a traditional bank, cap in hand. Peer-to-peer networks, like digital currencies-based networks, are becoming more popular and those that traditional banks would turn away now have a different way to go
Are these latest crypto currencies challenging traditional banks?
In brief, yes. Those who pay attention to crypto currencies have already defined as a threat to the industry. BNP Paribas, a French banking giant, published a report about the technology behind crypto currency and how it could contribute to consolidation for traditional banks.
A bank expert wrote about the crypto currencies technology saying that it “should be known as an innovation such as the steam or fire engine that has the potential to transform the financial world and beyond.
A UK banking study concludes that crypto currencies are definitely a threat to traditional banks, especially if they ignore new consumer habits and expectations when it comes to how they transact and transfer funds.
Bit coin users can meet many of their daily transaction needs on their own, without having to interact with banks and without the need to incur bank charges. Similarly, the money deposited in PayPal accounts travels outside the payment systems of the bank, depriving banks of significant revenue from transactions.
There are a few problems identified with these crypto currencies, such as their alleged safe status for potential perpetrators of illegal activity, a relatively low market cap (about $3.4 billion in bit coin’s) and a sense of uncertainty with currency value.
NPR’s advice for investing in Bit coin was nonetheless, traditional banks are becoming very conscious of ceding some land to the new generation of crypto currencies. There are many people out there who couldn’t wait to find a way to beholden to a big bank in some way, and these people are actively taking up new options.
IT returns to what Chris Skinner talks about in Digital Bank; to stay relevant, big banks need to digitize and offer similar real-time services to what people demand from crypto currencies.