Cryptocurrency is a notoriously dramatic space, but it isn’t just about crazy returns on investments or juicy drama from unhinged multi-millionaires.
Yes, a lot of people have been made very rich (not without some others losing out, of course). But that’s just one aspect of it. The real power of cryptocurrency is the ability to disrupt the traditional banking system. If crypto is perceived as a threat, the banking system will have to up its game to compete. Die-hards even think crypto could replace banks entirely one day.
Could that ever happen? It sounds pretty crazy, but then, it’s pretty crazy how much progress crypto has made in such a short time. Major banks have gone from calling crypto a scam, a pyramid scheme, a fad, to investing in cryptocurrency and blockchain solutions.
Goldman Sachs have a new cryptocurrency department and backed the company that just acquired Poloniex.
Hey, remember when JP Morgan’s CEO called Bitcoin a fraud that was going to get someone killed, but also his office was literally hosting blockchain events and also they had already filed multiple crypto/blockchain patents?
— Bart Stephens (@pbartstephens) September 12, 2017
Good times. Of course, people see this stuff and they think “Hey, what more do you expect from a bank, right?”
I’ve written before about how the 2007 global finance crisis created by major banks didn’t exactly leave them with many new fans. 92% of people growing up in that era (hint: they’re called millennials) don’t like banks any more, arguably with good reason, and it shows. Finance giant Bank of America admitted in February that cryptocurrency was a legitimate threat to their business model, and the list goes on. What does crypto have to offer that banks don’t?
Trust, for one thing. Looking good guys!
Crypto: The Future of Banking
After the crash which affected billions of people, people simply do not trust banks, and for the first time in a long time, we’re starting to see real alternatives.
Projects like OmiseGO and Wanchain are aiming to offer banking solutions without the bank, and they’re gaining real traction. OmiseGO is connected to Omise, a payment provider that has already reached widepsread adoption throughout SE Asia, pretty much performing PayPal-like services in countries where that isn’t popular or permitted. Omise is a huge e-commerce payment platform with a major base already, and the company’s crypto platform aims to provide banking solutions for the unbanked that will actually offer faster and cheaper services than brick and mortar alternatives.
Cryptocurrency payments eliminate currency exchange issues, border issues, and can offer low or even no fees in some cases. For migrant workers sending money home to their families, or anyone looking to send quick microtransactions, it’s perfect. They’re also working on a decentralized exchange and a bunch of other stuff.
Then there’s Wanchain. With a goal of building a network of decentralized exchanges and actually connecting the whole cryptocurrency market on one platform, this project could be a real alternative that offers full banking services including loans and financing, investments, transactions, and more, all decentralized and performed trustlessly on the blockchain.
When 92% of the upcoming generation don’t trust traditional banks, a trustless alternative starts sounding pretty good, and with so many crypto debit cards in the pipeline, cryptocurrency is starting to look like a real alternative.
Know what one of the most annoying things about the cryptocurrency space is? There are literally thousands of projects.
Know what one of the best things about the cryptocurrency space is?
THERE ARE LITERALLY THOUSANDS OF PROJECTS.
Maybe it won’t be OmiseGO or Wanchain specifically that brings banking to its knees. Maybe they’ll both gain traction in certain areas and do their part, maybe one will completely blow up and take over, or maybe they’ll both fail and fade into obscurity. The great thing is, it doesn’t matter – crypto is a hydra, and for every head that gets cut off it grows ten more. The space exists to provide solutions and fill gaps in the market, and that’s exactly what’s happening.
OmiseGO and Wanchain are proposing more efficient, transparent, and cost-effective solutions to the monopolised banking system, and there are a bunch of other projects trying to beat them at it. Cryptocurrency is bringing competition to the banking system that has arguably never been seen in the history of banking.
By now, we’ve seen the beginning of what crypto and blockchain can do. It’s no longer a question of whether this technology is capable of providing a viable alternative to banking in theory. The technology is capable – but are we capable of accepting it?
What will make or break cryptocurrency is adoption, and that will come from governments and regulatory bodies to an extent – but mostly it will come from average people who will seek out a better deal wherever they see one. Adoption won’t happen over night, but the rate we’re seeing is already very impressive. The market went from $18 billion to $813 billion in the space of a year before “crashing” to the current value which is still 25 times higher than it was last year.
If you ask me, it’s not a matter of whether can break the banks.
The question is, can banks adjust in time to get on board?
Some of them might, and some of them might get steamrolled while insisting that Bitcoin is a murderous pyramid scheme.
The now-avid crypto investors and service providers Goldman Sachs said that the majority of cryptocurrencies were “going to zero”.
If you ask me, the majority of banks are going to see them there.
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