May 30, · Death of the banking system. The beginning of a new era in which banks would ultimately be rendered obsolete in front of Bitcoin and similar technologies. Banks can no longer create reserves and do fractional reserve lending with BTC. Banks can’t control BTC because it has no representative and is fully decentralized. Jul 28, · Bitcoin System is a trading robot that reportedly generates huge profits speculating on bitcoin. This robot is said to earn its users at least $ daily from a deposit of $ Nov 01, · Bitcoin users don’t need the existing banking system. The currency is created in cyberspace when so-called "miners" use the power of their computers to .
Banking system vs bitcoinWhy Governments Are Afraid of Bitcoin
If you go back and see, most of the inventions like the car or the airplane that we use today came to existence in the 19th century or early 19th century when humanity was under the gold standard. Just like Bitcoin, Gold cannot be printed or easily created and thus sound money like Gold engineered the human spirits to innovate and experiment more without worrying about inflation or bank bailouts.
Thereby creating the demand for the real hard money principles to liberate humanity. Having a backup is always good option. Written By Sudhir Khatwani. Did you know banks fear Bitcoin? Look: Let me be honest with you.
Banks suck!! Banks are inflation agents. Wikipedia defines it as follows: Fractional-reserve banking is the practice whereby a bank accepts deposits, makes loans or investments, but is required to hold reserves equal to only a fraction of its deposit liabilities.
In a nutshell: It means the money banks lend to us never exists in first place and is only created out of thin air when we demand it. If you and I do this, we would be thought criminals. There is a solution. Meet Bitcoin Bitcoin is the solution. But stick around and listen to me first: If you examine the conditions in which Bitcoin came to existent, you might be able to connect the dots.
But who gave this financial assistance? The solution is to embrace Bitcoin and similar sound form of money. You might think what will happen from that? I bet, you will. So bottom line: We should think about increasing the awareness of such kind of hard money so that there is enough demand for it.
Banks Vs. It means: Death of the banking system. Banks can no longer create reserves and do fractional reserve lending with BTC. Banks can no longer censor the monetary policy if BTC gets adopted. Banks cannot do bailouts with Bitcoin if it gets adopted worldwide. Banks will no longer be required as middlemen who facilitate finance for you and me if BTC gets mainstream.
There are, of course, several key differences between purchasing bitcoin and traditional banking. First, and perhaps most obviously, investing in bitcoins is not structurally the same thing as putting money in a bank account.
A bank account stores currency in its existing form, in an existing institution. This comes with fraud protection, membership programs, and any insurance against loss or theft such as, in the United States, the FDIC. Storing money in bitcoins is structurally an investment. It is an asset purchase similar to buying real estate or foreign currency.
Where a bank actually stores your money, an asset like a bitcoin merely stores its value. There are a lot of differences between investing in bitcoins and opening a bank account, and almost all of them flow from this one.
Putting your money in a bank keeps it in its original fiat currency. If you put dollars in, the contents of your bank account will remain dollars. Investing in bitcoin transfers your money into a bitcoin token. If you purchase bitcoins, the contents of your wallet will be bitcoins. Fiat currencies are set by government policy. A bitcoin token, on the other hand, is a fixed currency commodity. That means that the supply will not contract, and will only expand at a set rate up to a certain number of tokens in circulation.
A bank account will change based on two factors: the value of the underlying currency and the value of the interest paid. Money in a bank account accrues interest at a fixed rate, set by contract between the consumer and the bank.
The currency itself can also change, typically through inflation which causes the value of each dollar in the account to erode. Inflation is heavily influenced by government policy. In the United States, it generally stays at or around two percent per year, the target goal of the Federal Reserve Bank.
A bitcoin, on the other hand, will change based primarily on market forces. With no regulating authority, and the supply of bitcoins in the marketplace fixed, the price of a single token is almost entirely dictated by supply and demand. Where inflation in the United States averages around two percent per year, the value of a bitcoin can fluctuate by more than 15 percent in a single day.
As a result, money invested in a bitcoin can accrue far more value than money left in a bank account, but it is also subject to more severe losses. A bank account involves merely the storage of your money.
As a result, spending any of that money involves a third party transaction that fetches that cash from your institution. This could mean stopping by an ATM or using a debit card, both systems which then check your account and transfer spendable funds accordingly. Given that your bank will hold fiat currency on your behalf, the money is universally spendable within its economy.