Bitcoin, as the first cryptocurrency, was created more than eight years ago. Even though Bitcoin was several times on the verge of entering the mainstream world, it never managed to make it there fully. It always remained in the circles of technology lovers and people who are open towards new technological developments. However, with the blockchain technology came the much-needed change as Bitcoin started to gain popularity even in the mainstream economy.
Many, including experts, have called Bitcoin a bubble, especially after this cryptocurrency had a 700 percent increase in value in only one year, which had not happened even with the biggest and most popular companies in the world. It was that percentage that led many people to issue a warning about the possible collapse of the entire market.
Can Cryptocurrencies Completely Change the Economy?
With the huge growth of Bitcoin and other cryptocurrencies as well, many have been saying that the days of traditional banking and banks and other financial institutions are numbered. During the years, Bitcoin developed into a very stable cryptocurrency and its features are something that brought Bitcoin to the mainstream, especially in the last three or four months.
In a research conducted by CNBC, it was revealed that the fees that banks charge for their service make up around 40 percent of the bank’s income during a year. Unlike traditional banks and with the use of blockchain technology, Bitcoin has completely cut out the role of middleman that the banks have been playing for so long. Because of that, more and more investors decide to convert their funds to Bitcoin because with that cryptocurrency they get more of their money’s worth. Of course, this doesn’t sit well with many major banks.
Besides that, banking services are not available for more than 2 billion people all over the world. On the other hand, Bitcoin has been very popular in the developing countries as it provided the access to the funding and money saving without having to go through a process of opening accounts and physically going to the banks to get the money for some purchase. Because of that, more and more people from all over the world are starting to use Bitcoin in their everyday life.
Increased Levels of Security
One of the most striking differences between banks and Bitcoin and other cryptocurrencies, in general, is the issue of security. Banks are currently not able to guarantee a high level of security for the investors’ and other people’s funds as they are subjects to physical theft as well as to the online breaches that could often be much worse than robberies. Unlike banks, cryptocurrencies provide very high levels of security and anonymity which is one of the main characteristics of cryptocurrencies.
Blockchain technology has brought Bitcoin to the mainstream and while some may think that it will take time before cryptocurrency becomes mainstream, there are some big indications that Bitcoin has already achieved this status. With cryptocurrencies becoming a great threat to traditional banks and other financial institutions, however, everyone knows that these institutions will not go down without putting up a serious fight.
Written by Ivan Potocki
