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Crypto is making banks obsolete

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Crypto is making banks obsolete

Our banking system has reached the end of the road, in that it relies on human interaction that can be biassed. This system does not have its customer’s best interests at heart, given the exorbitant fees that are charged, and the amount of control that banks wield over their customer’s deposits.

Most people think that when they deposit their pay check into the bank they are just using it as a repository for their money. They can use the utility of the bank to pay their bills and to send money to individuals and companies.

However, how many people know that the bank becomes the legal owner of the money once it is deposited, and that it has the right to spend it how it sees fit?

How many people have had to explain to the bank exactly where they are sending their money, and why? And how many of these customers have had the bank tell them that they are not going to permit the transaction?

Many banks still ban credit and debit card purchases of crypto. HSBC states that it will not facilitate the buying and selling of cryptocurrencies, and even goes as far as preventing its clients from the purchase of Microstrategy stock, given that this company buys bitcoin.

Banks that interfere to this extent with their customer’s choices are just not fit to receive the trust of their clients, and a fast changing financial environment could see them out of business in a not too distant future.

It is to be wondered just how we have allowed banks to get into this position where they freely make such financial decisions on our behalf. Given how they have milked their customers for such high fees in order to line their own pockets, their time as guardians of our money must surely be limited.

According to a Forbes article banks make more than $15 billion a year in overdraft fees. The article gives the example of a $3 cup of coffee ending up costing $35 if bought with an overdraft facility.

Other ways that banks charge fees is through penalties for lateness, using certain ATMs outside of their network, money transfers, inactivity, and international remittances.

Transactions are not fast either. The money rails that the banking industry uses have not been improved in several decades. It can take a week or more for larger payments, or those made internationally, to be effected.

Banks collect extremely sensitive data from their customers, and this can allow them to profile you and to even share this data with partners or other third parties.

Antidote to the banks

Therefore, what is going to eliminate the banks is bitcoin and cryptocurrencies. Bitcoin was created in order to allow anyone to transact with anyone else without the need for a trusted third party.

Crypto operates 24/7 every day of the year, whereas banks are closed at weekends. As long as crypto is held in a safe and secure wallet where the keys are kept by the owner, then it can be every bit as safe as the bank, which has to spend much (customer fees) in regularly updating its security.

The fees for transacting cryptocurrencies are generally called gas fees. This is a one-off fee that varies depending on the protocol or blockchain being used. They can be as little as fractions of a cent and they can be extremely fast, reaching settlement in just a few seconds.

One of the main utilities of cryptocurrencies is that they are completely outside of the banking system. No political manipulation is possible. With the current financial system teetering on the brink of collapse crypto provides a way to store your wealth, unreachable by government, and with bitcoin, providing scarcity and mathematical certainty.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


Source: ethereum.today

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