How Bitcoin Cash Threatens the Traditional Banking System After the 2008 Financial Crisis
Bitcoin Cash as a Decentralized Alternative to the Power of Central Banks
The world economy was plagued by a setback between the years 2007-2008 that was bigger and worse than the great depression of 1929, it was a crisis originated by predatory lending that targeted low-income homebuyers.
The gap went even deeper, as excessive risk-taking by financial institutions around the world and the bursting US housing market, which was already a bubble, ended with a major economic storm .
The collapse was even more profound when the crisis hit the largest banks in the world, opening the door to the international banking crisis reaching the bankruptcy of Lehman Brothers.
The bankruptcy of Lehman Brothers was the last straw that led to the global financial crisis, and September 15, 2008 was the culmination. The mortgage crisis was so intense that it led the company to try to renegotiate the outstanding debt with the creditors, but the negotiations failed and led the corporation to file for bankruptcy.
The Lehman Brothers bankruptcy petition was the largest to date registered in the United States of America and involved the loss of more than 600 billion dollars in assets.
It was in the face of this 2008 crisis in the global economic path that SATOSHI NAKAMOTO created and launched BITCOIN as a response to combat the crisis. In 2008, the whitepaper was published and the financial story had another boost.
**BCH is Bitcoin, the Hard Fork that emerged in 2017 with the main objective of keeping the properties of electronic cash accessible to everyone.
The financial crisis was mainly triggered by central banks being the policymakers and Bitcoin an answer to the crisis. The decentralized nature of Bitcoin, electronic peer to peer cash, has the (1) power to dismantle the power of the banks that control the economy and has the responsibility to manage the financial environment that affects the economy and wealth management of entire countries worldwide.
Banks play a crucial role in the global and local economy, they are practically the ones who create regulations that define the market with central banks as the "arbiter" that controls, creates regulations and also issues paper money.
In some countries, central banks are responsible, in addition to controlling the financial system, for maintaining the level of inflation , ensuring the employability of citizens. In other countries, central banks have the function of maintaining financial stability and capital solvency of local financial means.
The central financial entities have a preponderance of economic tactics that affect the traditional financial market which they call monetary policies . They involve the market in money manipulations, raising and lowering how much money can circulate in a given economy.
"They are also the "dictators" of interest rates on money!"
As we can see, central banks have a lot of influence on the economy, and at any time they can also be responsible for an unprecedented economic recession after all, they can at any moment reduce the amount of money circulating in an economy causing individuals to have less money to spend on food/essentials and cause an economic crisis.
This principle is based on the assumption that central entities can also inject money into local or global economies by allowing more consumer spending to fuel economic growth.
Central banks have a set of support (commercial banks) that help in the distribution of money in an economic system, they have a crucial participation in national and international trade, boosting investments by reducing interest rates on money.
Monetary policies resulting from the actions of banks can boost the economy or cause an economic downturn .
HERE, we can see that banks play a huge role in the world economy and govern statutes that define who and how consumers can access the services they provide. They define who should have a bank account, what documents are required and how much is the minimum amount for opening, maintenance accounts, can also restrict access without PRIOR NOTICE, causing individuals to be in a vicious cycle of dependence on banks.
Individual accounts can be frozen at any time, causing embarrassment to anyone using banking means, such as a credit card, and harming the customer who uses this means to pay for goods and consumption.
The Competitive Threat of Bitcoin Cash: Solving the Problems of Traditional Banking
After the great crisis of 2008 that shook the foundations of the global economy, SATOSHI NAKAMOTO created what would be the largest decentralized payment system asset in the world, Bitcoin, which after 14 years is an economy that threatens the central organs of traditional economic supply.
Bitcoin Cash, Peer-to-Peer decentralized digital money, remains the solution for the emancipation of the individual to create an opportune economy that responds to the needs of the consumer.
Bitcoin Cash is an alternative to banks based on economic values and also on blockchain technology. Bitcoin Cash's decentralized blockchain allows consumers to make payments online, without having to trust third parties, as the transaction takes place using cryptography.
Those who use Bitcoin Cash do not need to have a bank account to access the money, they only need an internet connection, a wallet, & Bitcoin Cash address to be able to transact freely. Here, (2) there is no need for a bank , it is irrelevant.
As I mentioned above, banks have a greater preponderance in societies and define how powerful they are in a local or global economic infrastructure, but Bitcoin Cash by its nature can solve the following problems:
Using Bitcoin Cash there is no need for a central tertiary infrastructure for the transaction to be executed. The decentralized form of Bitcoin Cash allows anyone who has a Bitcoin Cash address, value in their wallet at anytime to transact with others in a peer-to-peer system.
The Bitcoin Cash Blockchain is reliable, has a system of global Nodes whose mission is to approve transactions to be included in the Ledger using proof-of-work and with a reward for miners incentive.
Bitcoin Cash eliminates the problem of double spending, each Bitcoin Cash is unique and kept secure by the blockchain making it impossible for it to be counterfeited or even have the network exploited.
There is a growing number who are seeing the advantages of using Bitcoin Cash to boost their economy and give consumers a greater revenue harvest and thereby raise the standard of living in societies. Thus, they are considering adopting Bitcoin Cash as a LEGAL TENDER.
By adopting Bitcoin Cash as a LEGAL TENDER , banks will have to start creating mechanisms to engage within the decentralized economic space and allow customers to use Bitcoin Cash for example, to make deposits or payments using banking means (top up credit cards using Bitcoin Cash) and keep abreast of customers' economic life.
After all, one of the reasons bank customers stop using bank accounts is the intolerance shown by financial institutions towards cryptocurrencies, as they see the decentralized system as COMPETITION.
THE COMPETITION referred by them leads to the accounts of certain customers who deal with crypto being restricted, frozen citing violation of their terms of service.
Banks compete against Bitcoin Cash these days, they compete for the same customers with BITCOIN CASH and more! Those who are unable to create [Unbanked] bank accounts turn to Bitcoin Cash to safeguard their finances and be able to use cash whenever it is convenient.
This competition goes above and beyond! Banks have been adopting the blockchain (not open source) as a basis for CBDC, which is the central digital money that has the authority of the central bank as a way of mitigating some advantages that Bitcoin Cash demonstrates: speed of execution, bonus fees, it may also come to having removal of intermediation, it is cheaper compared to producing paper money and metal coins.
The exploitation of central banks on the blockchain is also has interest in security, as it is safer from cyber attacks and practically cannot be replicated.
Bottom line
Although Bitcoin Cash is still in a growth phase in terms of expansion as a means of payment, it poses a threat to banks and conventional means of payment.
One of the biggest competitions that Bitcoin Cash prevails against banks is the fees and non-custodial storage. The fees on Bitcoin Cash are very low compared to banks and it allows the consumer to become their own bank.
And not only that, the possibility of making quick national or international payments, the nature of trust in cryptography, where the consumer directly controls the money, as well as the possibility of making recurrent money remittances to family and friends.
Remittances are fundamental in some world economic circles where societies depend heavily on this type of income to circulate money in the economy, after all it is a direct injection of capital that can provide oxygen to many needy families.
Banks are still the driving force in the global economy, but they exert excessive force in the market by imposing economic monetary rules that may trigger an economic downturn.
The more time passes, the more educated people enter the decentralized economic market, taking advantage of the multiple benefits that the space offers and ensuring that the economy continues to grow by withdrawing from the conventional means to invest in the crypto ecosystem.
The banks, continue in the monotonous slowness that when they wake up it will be very difficult, for example, to regulate Bitcoin Cash because it will have grown a lot.
Give "The Interviews" a read as well:
Do you enjoy reading my blog? Consider donating to help me keep writing and maintaining it! Every little bit helps and would be greatly appreciated. Thanks a lot!
TipMeACoffee ☕ Or TipMeAnyCoin ☕
bitcoincash:qzntexhvr7eq902wpnvyvd3eslqdt333fcdmh3tjrd
Don't forget to check out my Bitcoin Cash accounts! Give them a follow if you're interested in keeping up with my Bitcoin Cash journey. Thanks for your support!
