Will Bitcoin Replace Traditional Banking?
The astronomical rise of cryptocurrency has taken even financial experts by surprise. Bitcoin and other digital assets are such a polarising topic, you might wonder whether you should buy Bitcoin or stay away from it.
The temptation is there, however, as the traditional banking system has its imperfections. Some crypto investors are looking forward to a future where cryptocurrencies permanently replace fiat currencies.
But will that truly happen, or will the crypto industry peak and collapse? Unfortunately, there’s no simple answer, and we need to dig into this topic with some nuance.
Could Bitcoin Replace Traditional Banking?
Before we can make any predictions about what the future holds, we must evaluate the possibilities. Could decentralised finance replace traditional finance? The answer is a clear yes.
It’s easy to picture a world where a Bitcoin wallet is used in a myriad of ways. In fact, Bitcoin could replace any fiat currency in all its store of value uses. In addition, it offers better security, smart contracts, faster transactions, and lower fees.
You can even take out a crypto loan and raise capital for crypto projects. Plus, when you combine these conveniences with all the arguments against central banks, things get even more interesting. Central banks have enormous power, and the mistakes they make have lasting consequences.
So, Will Bitcoin Take Over?
Cryptocurrency replacing traditional banking is certainly possible, but perhaps not likely. It would be naïve to think that banks will simply sit back and watch the crypto world take over.
Replacing any fiat currency is no small feat, and none of the major digital coins is ready for it. The idea of a currency free of central authority winning this fight sounds enticing, but a lack of liquidity stands in the way.
For most people, accessing and spending cryptocurrency has not been made simple yet. However, there is another obstacle we need to keep in mind. Centralised authorities are adapting to this new reality quickly.
Blockchain solutions are being implemented to stay relevant. But it’s not a smooth process, and many central banks aren’t sure about what they can actually bring to the table.
In the meantime, many avid traditional investors are migrating to decentralised apps and cryptocurrencies because they’re profitable.
We also can’t ignore the impact mainstream and social media has in pushing forward the narrative of crypto dominance in the financial realm.
The Acceptance of Bitcoin Among the Population
The eventual switch to cryptocurrencies could happen naturally and without much pressure from the crypto community.
You might be able to find the answer about the direction of cryptocurrency by examining the demographics of those who participate in it.
People aged 25-34 make up 58% of all digital currency owners, and nearly a third of them prefer to buy Bitcoin. Furthermore, 36% of crypto holders are in the age group 35-44.
That leaves only a small percentage shared between Baby Boomers and those over the age of 65. Unsurprisingly, the older generations aren’t interested in cryptocurrencies, not to mention them replacing traditional banking.
Also, we can’t ignore the geographical aspect. Most crypto owners are in Asia, and more specifically, China.
How You Can Speed Up the Crypto Revolution
If you’re passionate about all things related to Bitcoin and decentralised finance, you’re probably eager to see a vastly different future. You can play your part by getting more involved with all crypto activities. Make sure to have a secure Bitcoin wallet and only use safe crypto exchanges.
Furthermore, all decentralised networks rely on the people in them and the processing power they utilise. Engaging in Bitcoin mining and joining a Bitcoin mining pool keeps these networks running.
You can also be vocal about the over-regulation of cryptocurrency and talk about bans against them in specific locations. The power is in the numbers, and if people keep talking about the benefits of using Bitcoin and other digital currencies, others will listen.
Bitcoin Is Here to Stay
But will it replace pound sterling and the US dollar soon? No one can tell for sure. The idea is there, and efforts have been put into place. However, regardless of their flaws, central banks are some of the most powerful institutions in the world and won’t concede without a fight.
They’re already adapting to the new trends without letting go of the traditional mechanisms. The need for decentralised finance may prevail and even replace some of the systems. But that will probably only happen as the younger generations start to take over.
HiteshAuthor Bio: Hitesh is a digital marketing strategist and entrepreneur with more than 15 years of experience in digital marketing, start-ups, branding, and customer acquisition strategies. Hitesh is the CEO and Founder of Reposition Group, which specialises in digital growth strategies for companies in the cryptocurrency market such as Bitamp.com.