Banking has been a constant activity for a long time. For centuries, the banking institution has controlled our collective imagination. And of course, the finances. Over the years, this control has become all-encompassing. With even greater bureaucracy within the procedures, the entire phenomenon has become stifling and certainly officious.
In such a time, the advent of the cryptocurrency is like a breath of fresh air. A peer to peer transactional system based on a decentralised environment, cryptocurrency ensured that security and ease of usage can both be achieved under one roof. With no third party oversight and authority, the turnaround time is lightning fast.
That’s not to say that banking has not evolved. Over the ages, from being run by knights and their affiliates, it has transformed itself into the behemoth we experience today. It is highly organised and can carry the weight of billions. However, there were certain flaws that had crept into the entire paraphernalia. This was one area where cryptocurrency stole a match.
Inflation. That dreaded word every economist worries about is dealt with efficiently by cryptocurrencies. What it primarily did was to replace real, paper money with virtual currency. Something that only had a token related to it. And then with that token, it could be transferred across blockchains, cryptocurrencies and continents. The security was being provided throughout the phase the technology has evolved. Blockchain creates a block for any transaction that happens. It’s like a ledger that gets formed. Also, virtual cash can never be counterfeited or faked.
Also, with no third-party interventions, there are no taxes and transaction charges, making cryptocurrencies one of the most popular phenomena of our times. However, one of its greatest strength is also its greatest enemy. With no regulatory oversight, cryptocurrency became a playground for nefarious elements. Also, over-reliance on technology is a double-edged sword. Imagine the system crashing with no backup, wiping off the entire holdings of its investors and account holders. A bank with myriad checks and balances will have immunity against such mishaps. Also, money laundering, which is quite rampant in the financial sector, will have a field day, while dealing with cryptocurrencies.
There are two schools of thoughts. One which predicts the demise of the cryptocurrency and the other which points out at the phenomenal growth of the sector. We can only wait and watch this tango as it slowly unfolds in front of us.