The flagship e-currency Bitcoin, according to its creators, is a form of cryptocurrency that utilizes peer-to-peer technology. One of the biggest reasons it has been created is that anybody in any part of the world can use it to make transactions. For this purpose, Bitcoins have been established to operate without the need for any central authority, especially banks, to monitor its movements or usage.
If one considers this, then it can be said that Bitcoins do have the ability to eliminate the functioning of Central banks. However, even the growing popularity of these cryptocurrencies and their counterparts has not been able to create a strong enough presence even to challenge the position of Central banks. Therefore, even if many cryptocurrency enthusiasts have pointed out the shortcomings of banks, the vital role in society cannot wholly be taken by this volatile e-coin.
The Need for Banks in Today's World
Even though the various positives of cryptocurrencies make a great argument as the future of money, it is still in its early stages. Every government has its own Central Bank that has been enshrined with the power to issue currency. This allows the institution to make the financial system of the Nations stable.
Even though the various positives of cryptocurrencies make a great argument as the future of money, it is still in its early stages.
The decentralized nature of Bitcoins mainly looks lucrative, which is often the starting point of many frauds. However, it also has to be kept in mind that not all world places have access to electricity or the internet. Therefore, the ubiquitous nature of Central banks cannot be adopted by a monetary system that is heavily dependent upon the internet.
Central banks also create an environment for safe credit access for consumers that cannot be done through cryptocurrencies at this point. E-currencies do not have any Central authority that can make sure the transaction process is done correctly, and it creates a lot of mistrust.
Another function of Central banks is to limit the amount of money in circulation in any nation. This makes sure that the economy of any country can stabilize even when there is an unprecedented situation pushing the government into a crisis. The same cannot be said about cryptocurrencies which are in limited numbers from the very beginning.
The volatile nature of cryptocurrencies, especially Bitcoin, is not found in the actual currency. One could argue that the value of one's Nation's currency rises and falls all the time. Still, the dramatic nature of Bitcoins puts it in a different league altogether.
Therefore, even though many banking systems collapse and even the International Monetary Fund has been criticized for billions of dollars in profit, it will not go away. For example, the amount of transactions that happen with credit or debit cards of different banks is billions every day.
In contrast, the number of transactions done through cryptocurrencies in the year is a paltry one in comparison. These findings by researchers have pointed out that even though the impact of blockchain technology has been tremendous, it is still in its early stages and will have to go a pretty long way to push banking systems from their position.
You can very well understand by now that the collapse of Central banks is nowhere close to the future. Banks play a vital role in today's world, and the power they are wielding to shape the economy will not get diminished even if cryptocurrencies keep on growing. The adoption rates of digital currencies are still pretty low. Only a handful of nations have agreed to give Bitcoins legal recognition.
Therefore, to even make the statement that Bitcoins have the power to overthrow banking systems is premature. This does not mean that cryptocurrencies do not have a bright future and if you want to experience the incredible power of Bitcoins, then go on to websites like https://bitcoinscircuit.com/ . These sites will let you explore the profitable world of Bitcoin trading and investing, no matter what part of the world you are residing in.