Crypto vs Bank system - Which one is better option for Financial Freedom

Crypto vs bank system

Crypto vs Bank is one of the most discussed queries as both of these are introduced for the utilization in financial activities such as transaction processing, assets transfer, e-commerce, and much more in the financial space. In this post on the topic of crypto vs bank, we are going to discuss everything from their history to their implementation and from their pros to cons, So Hold on. In crypto vs banks, we are going to cover the maximum of their functionality and features.

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1. Why do We Need Banks?

Banking systems were introduced to make access to the major parts of the financial system such as Loans, Money transfers, Funds Security, Funds management, and much more. The traditional Banking system made a revolution in the financial sector at an early age. It made money transfer easy and provided loan opportunities, Banks Play an important role in daily life these days. Every country has its Banking system where the central bank leads the network. Central Bank is responsible for the supply, flow, and reserves of money. On the international level, Banks are responsible for cross-country transactions.

2. How do Banking systems work?

Banks plays important role in the growth of any country and the financial sector of that country. The banking network within a country works under the Central Bank. Central Bank circulates money to the different banking networks under the supervision of the government. So in the Banking system, there is a network of banks under central banks that process the user's financial services/transactions under the supervision of the Government.

3. Services Provided by Banks

In typical words, the traditional banking system provides services such as payment processing, loans, Credit Cards, Debit Cards, Security, Funds management, Interest on Savings, and Insurance are a few applications of Banks. Banks allow cross-country payment transfers by international payment system as Visa, MasterCard, and other Networks. Banks are centralized authorities that make it easy for users to access e-commerce. Billing.

Loans

Banks Provide Loan Services for users on different policies and interest rates. Banks offer loans on a collateral basis for different sectors such as Construction projects, Farming, Housing Schemes, and much more. Banks raise capital from investors and then use that capital for loan offers and earn high payback interest. From these earnings banks offer APY to investors on terms and conditions that might be hidden or transparent.

Funds Management

Banks offer funds management to their customers by different account types with different types of features. In the Banking system, users can specifically choose their account type for savings, current, and Bossiness with different types of bonus features but these features are paid. According to the type of account in the banking system, banks manage the user’s funds.

E-commerce

In the world of the IOTs (Internet of things) digital marketing demands quick payments and easy access to everything from shopping to freelancing and survives exchange. The Banks work as the middle man in the world of the Digital marketplace. Users can make their payments in one click using the electronic cash system introduced recently in the banking system.

Insurance Policies

Banks offer different insurance policies related to business, sports, study or life insurance, etc. These insurances are based on different periods and different terms and conditions according to the need of the customers. In other words, banks offer insurance for each and everything customer's needs. This makes the banking system able to raise capital again for a long-term roadmap. Banks use the customer’s money for different business purposes and then after a specific period customers can avail their money as per conditions on policy.

Billing

Banks with digital systems allow users to enhance their experience by offering easy Utility Bills payments with one click in this digital era everything is controlled by smartphones users control their Billing with the help of Banks to make easy payments also banks offer cash back on bill limits.

4. Drawbacks of the banking system

  • No doubt Banking System was a revolution in the financial world, but that the fact the inflation, and economic crisis we are facing in recent times is just because of the baking system due to the control of banks the money circulation, and higher interest.
  • Banking system is completely responsible for the over-printing of money and poor demand and supply control. Banks are centralized and banks make their favorite policies good for their profits not for the customers.
  • There is no transparency in the banking system, the flow of money is too shady as banks were introduced to provide services to the users, there are millions of banking institutes and according to an analysis there, 2.5B people are still unbanked just because of the banking requirements.
  • Unbanked Population is a big question on the services of the banks as banks are only working for the development of particular sectors and the others are left behind.
  • Security is also a major concern in the banking system as banks are centralized which means that banks' servers are a big threat to the banking system if their servers got compromised the funds can be easily manipulated.
  • As far we are covering up crypto vs banks, banking systems are failed to bank the maximum of the population over there and misused their power and put the whole world into the inflation crisis due to their wrong policies.

5. Why do we need crypto?

The banking system was a good revolution in the financial world but now there is a need for financial freedom as everything is controlled by the banks from the transaction limit to the daily spending. The financial world needs Decentralization and transparency. Crypto is here to provide and meet all the requirements of the customers. Crypto is decentralized, secure, and transparent. Crypto is the solution to the current economic crisis as inflation can be controlled by crypto (BTC).

The major reason that why we need crypto is, crypto is a P2P system where there is no third party involved, and completely anonymous and transparent.

6. How Crypto Works?

Cryptocurrency works on a secure technology called blockchain which is completely secure decentralized and transparent. On the blockchain, the data is stored in the form of blocks and these blocks are mined/created by the network validators called Miners. Anyone can be the miner or validator on blockchain who meet the hardware requirements, this makes the chain secure and decentralized. This way without the involvement of the middle man transaction on the blockchain is processed by the miners/validators. Crypto is fun as it owns all the required features

Validators/Miners

On the Blockchain network, the validators / Miners are the group of peoples geographically distributed in the world who shares their computing power and hardware resources to process and check the transactions made on the blockchain, and in return, these validators are rewarded. i.e On the BTC blockchain the Miners are rewarded by the transaction fees and Block reward.

Block reward in BTC

Block reward is the gift given to the network supporters in a way that mines the block. Block is mined by the computation of complex algorithms which hard solves the algorithm mines a new block to continue the chain and in return that hardware owner is rewarded by the gift.

7. Crypto Services

Crypto provides services to users in every aspect of life from financial needs to entertainment and from education to research level. Crypto is the concept to digitalize the world by codes called protocols/contracts. Crypto makes it easy to transfer any amount of money from any place to another place with no boundary limitation. Crypto is the implementation of real privacy. In simple words, we can say that Crypto provides all the services provided by the banking system and also all those which are unavailable in the banking system. So from there, we can say that Crypto vs Banks the crypto is an obvious choice. 

Decentralization

Crypto is decentralized as there is no central body to manipulate users’ funds. All the transaction processing and security are provided by a distributed network of computers that mines block the network and provide security to the blockchain.

Cheaper Cross-Border Transaction

Cross Border transaction s important to be discussed in crypto vs banks, On the traditional Banking system, the transaction made cross border take 1 or 2 business day to be processed and is charged some percentage of the fees. In crypto there are no boundaries in the financial world, instant, fast, secure, and cheap transactions are guaranteed by crypto.

Transparency

Transparency is the key, in the crypto p2p system all the transaction are transparent. All the services on the blockchain are open source there are no hidden terms and conditions on loans, liquidity, and staking of the assets. Insurance policies in crypto are far better than the traditional banking system.

Self-Custody of Funds

On the digital assets of crypto, there is full control of the funds in the user’s hands as there is nobody, no organization or middleman to control or manipulate the funds. Each and everything is decentralized and no compromise in privacy.

Security

Blockchain is considered the most secure data system ever developed which unbreakable and decentralized as no fake transactions are possible on the network if anyone wants to crack the block data he needs to crack all the previous blocks which are not possible let’s consider an idle situation if a hacker breaks all the blocks still it not possible to perform fake transactions. As the block data copy is occupied by every miner/validator so if data is compromised from one side there are millions of network supporters with copies of the real data.

8. Drawbacks of Crypto

  • Crypto is secure there is no doubt but there are many drawbacks in crypto in current times as the first one is the volatility of the market. The market is volatile so in terms of holding or savings, it's much riskier than fiat.
  • Crypto has decentralized there is no middleman between the transactions and open is based on open source contracts so anyone can copy the contract and make a scam platform as in a decentralized finance platform i.e Decentralized exchange, Funds management protocol, staking platform, etc.
  • Most of the decentralized platforms contracts are copy-paste which leads to the slow progression of quality, Most of the Decentralized Finance projects are based on the hype as according to market trends organizations starts making similar platforms which don’t make sense such as back in 2021 there was the trend of DEXs then there was the hype of Defi Marketplaces and now its DAO time.
  • Crypto vs banks as banks were centralized the misuse chances were low but crypto is free to use non controlled it can be used for destruction purposes also.

9. Crypto vs Banks

So after discussing all the pros and cons of both systems it’s time to find out the results for the crypto vs banks. In the investment market, the first priority of the investors is financial freedom and from all the points we have discussed here in crypto vs banks crypto is the clear priority. If you consider the developed countries there the civilians demand privacy and self-custody and it’s clear from the topic of crypto vs banks that the future is clear for crypto market. Banking system ruined its own reputation by dominating the rights of the customers.

10. How Crypto is a better option in crypto vs banks

Crypto is the better or I say perfect option in crypto vs banks, I can better explain that in the banking system to open up an account and access all the services there are variations of requirements for example banks require your financial background and find out and investigate the source of funds due to all these reasons many of the customers can’t even enjoy these services, but on the side of crypto, things are completely different as all a user need is a digital wallet to access the whole financial world no base funds, no financial background, no need of the source. And everything flows smoothly and privacy is never compromised.

Conclusion

In this topic, we have covered all the relatable topics to find out the answer to the question of How crypto is better for the banking system? Or Crypto Vs Banks. According to my analysis, Banks are the enemies of financial freedom as banks do control our money our spending, and our independence in privacy. Crypto is the perfect solution for the inflation crisis and all the financial problems we are facing now but still, there we are at the beginning of the crypto era. Crypto needs more development and market capital. Crypto has a bright future and crypto is the modern world revolution by keeping decentralization, security, transparency, and privacy. So Final words are crypto vs banks need attention as banks were the historical revolution but crypto is going to be the future revolution.

FAQs

Banking system vs crypto which one is better option ?

Crypto is a better option as its more secure, decentralized and scalable. crypto allows the maximum opportunities for the access of financial services. 

Banks vs Crypto which one implies the financial freedom ?

Banks dominate the financial market while crypto allows users to interact freely on the decentralized network by the P2P (Person to person payment system).


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