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As Bitcoin Grows in Popularity, Could It Disrupt the Banking Sector? This article explains several ways in which this can happen.
It’s common for people to be skeptical about innovations. And that is exactly what happened when Bitcoin came to market. After bitcoin gained ground and popularity, it attracted the attention of many skeptics, especially those from the conventional financial system. Traders are also interested in Bitcoin and to get the most out of their trading they can use platforms like Bitcoin Profit. This also included CEOs and executives of well-known banks.
Despite their skepticism, Bitcoin has continued to grow in popularity and application. Today, even skeptics are beginning to embrace the reality of Bitcoin. In fact, some of their initial concerns that Bitcoin could disrupt conventional banking are turning out to be true. And not just in one respect, but in several respects.
Bitcoin and Payments
The most obvious way Bitcoin could disrupt banking is by changing the way we make payments. Traditionally, you would have to go through an intermediary like a bank to make or receive certain payments. But Bitcoin’s blockchain is decentralized. It eliminates the need for intermediaries to allow peer-to-peer payments.
Bitcoin peer-to-peer payments would deprive banks of a meaningful revenue stream. Banks usually charge some fees for processing payments. And since Bitcoin will eliminate them, the banking sector would have one less revenue stream.
Bitcoin and international transfers
Bitcoin could also disrupt banking by making international money transfers faster and cheaper. Normally, when you wanted to send money abroad, you had to pay high fees, and the money stayed days or even a week before it reached the destination. The reason for these delays and costs is the involvement of many intermediaries, including various banks and other entities.
Bitcoin allows you to send money instantly to any part of the world at low cost. Since the transaction takes place on the shared blockchain network, as soon as you send the money, it appears in the ledger and the recipient can receive it. You don’t have to pay any bank or transfer fees to intermediaries.
Bitcoin and Lending
Bitcoin can also disrupt banking in the area of lending. It can make credit more accessible, cheaper and faster. To understand this, let’s first go back to traditional banking. When you apply for a bank loan, the bank will assess your creditworthiness based on a number of factors, including your credit history and assets. Many people do not have access to credit because of this assessment process.
With Bitcoin, you do not need a credit rating. Bitcoin offers users the ability to lend and borrow on the platform. You submit your loan application and if a lender is satisfied, you will receive the loan on the agreed terms. In addition, you receive the credit immediately. With traditional banks, you may have to wait some time before getting the loan even if you are approved for a loan. Maybe you needed the loan for an emergency and if it’s approved, you won’t need it anymore. Bitcoin could change all that.
Bitcoin and savings
Bitcoin could also disrupt savings. In the traditional banking system, people would save their money in their bank accounts. Banks might even offer special savings accounts. But as distrust of the centralized financial system grows, people are beginning to shun savings. For example, a bank may withhold your savings for any reason, preventing you from accessing your savings.
Bitcoin offers a better savings platform. Anyone can open a bitcoin wallet and use it to store. You would save money in a bank account the same way you would save your money in the bitcoin wallet. However, the funds are provided in the form of bitcoin. Keeping funds in Bitcoin is beneficial as it puts you in control of your funds.