Cryptographic "banks" vs. traditional banks

Take coinbase's registration data: it boasts a verified user base of over 56 million.

Bitcoin in February 2021 reached a market capitalization of $1072.21 billion, and forecasts indicate a likely direction of $1087.7 by 2026.

Objectively, the cryptocurrency market is continuing to grow inexorably; just to give you an idea, the CAGR (Compound Annual Growth Rate) predicts growth around 12% by 2024.

These numbers have caused many people to lose faith in legal tender.

The traditional banking system has served us for many years (millennia even!) but the technology that cryptocurrencies are based on will offer more stability, fairness and accountability.

The Great Recession

To understand some very important aspects of cryptocurrencies we need to go back in time: to 2007 when the Great Recession began.

The implosion of the subprime loans led to a domino effect in the financial environment for the simple fact that institutions provide liquidity and as collateral acquire credits.

This type of investment is extremely risky due to the problem that arises from defaults.

The repercussions of this have been catastrophic because people have realized that banks can also fail.

The example was the bankruptcy of Lehman Brothers: bankruptcy filings were initiated for an amount of 613 billion dollars.

Astronomical figures!

Let's be clear: after such an event, who would trust a bank with their savings?

The change

The way things were going, a change was necessary and that change could only exist in one way: operating without intermediaries, without banks in the middle.

The ability to be able to bypass banks was introduced by Team Nakamoto.

Bitcoin, with its blockchain is the solution to this question.

By being able to make Peer-to-peer transactions, banks, payment providers are no longer needed.

None of this.

Simply from my wallet (which is only mine) I send the money you asked me to your Wallet (which is only yours): no one in between!

This aspect, if we look at the numbers, appeals to many people: in 2013 Bitcoin had a value of about 50$, today we are around 39000$.

Practically a growth of 780 times!

Obviously the path has not been all linear, some falls have occurred, but if you look at the charts, the trend is up and in all ways there are more upward candles than downward ones.

As I said just above, traditional banks are losing ground to crypto "banks" because they are not customer-friendly.

On the contrary.

They have an almost vexatious attitude: in order to get a loan you need to have usually the double of the amount as collateral.

In some ways this is correct, but this requirement loses its meaning when, in a speculative manner, they commit money (not their own) without having tangible guarantees but only credits (with all the problems that follow).

In addition to this aspect, there are others, such as cross-border transactions: they are plagued by high interest rates!

All of this is subordinated by political entanglements that escape the understanding of the average person.

Team Nakamoto's enlightenment was to create a decentralized system that is resistant to censorship and, most importantly, free from the interference of any person or institution!

The traditional banking world is distorting the correct view of the movement of money; in fact the whole ecosystem is based on debt and not availability.

The only solution that institutions have to solve the problem of debt is nothing more than the injection of new liquidity without underlying with a consequent devaluation of the purchasing power of legal tender.

Cryptocurrencies do not have this problem; in fact they are inflation controlled since the supply is limited.

Once the last token has been minted or is exchanged, you cannot create others!

Cryptographic "Banks"

The reason why banks is in quotes is obvious: there are no crypto banks, only exchange platforms between fiat currency and the various existing cryptocurrencies.

Transactions happen independently between the parties and are all recorded on the blockchain.

To be able to transfer any token, all you need is a wallet and the address of the recipient wallet.

With the advent of DeFi, platforms have evolved to the point where they can offer the ability to make credit.

This form of credit, however, can exist only and exclusively against a guarantee that is fully paid: in this way it is impossible that the debt is not paid for insolvency!

The sum of all these features is inexorably overshadowing the traditional banks.

I see a very bright future for cryptocurrencies, don't you?