Crypto Banking vs Traditional Banking

cryptocurrency
cryptocurrency

There has been a surge in crypto banking post 2009, the year Bitcoin was introduced to the world. There was a lot of skepticism surrounding the idea of using cryptocurrency however, over the last decade, people are starting to understand how to make smart investments and to make unprecedented profits. This new era of investing and trading makes the system of traditional banking look outdated and people are growing more dubious of letting these banks handle their money. 

Crypto banking is essentially the means of introducing cryptocurrency to the market where it is exchanged and transacted among businesses, traders, and even among individuals. Cryptocurrency is a digital form of money that can be stored in digital wallets. There are a number of different types of cryptocurrencies such as Bitcoins, Ethereum etc, and even more platforms like quantum AI to help people trade in the cryptocurrency of their choice. This entire system is decentralized and operates without regulation of the government or banks.  

Traditional banking as we know it is the centralized banking system within a country. The currency generated is unique to all the countries of the world. In essence it is regulated and issued by the government of the day, and it is the government itself that is responsible for upholding the value of their currency. The central bank is usually in control of how much money is to be printed, however the government can authorise banking systems to be run by the private sector as well. 

The biggest question today for any new investor or trader or for a brand new business venture is to decide whether they want to put their money in the hands of crypto banks or use the old methods of traditional banking. Like any other practical choice, one must weigh the pros and cons of both, therefore: 

Pros and Cons of Traditional Banking 

Our traditional banks regulate fiat currency, in simple words, our local money. The most advantageous feature is the stability of its value if maintained by the government. It is easy to access through banks all across the country and can be used in real time in exchange for goods and services.  

Since banks control the printing and holding of money as needed by the economy, it is seen as a valuable asset in the event of a recession. Banks can easily supply, control the interest rates and liquidate the currency because they operate with a close eye on the global market.  

The most problematic area of fiat currency and traditional banking stems from its most stable point itself. The government’s control over the value of the currency may not always be in the favor of its citizens. Many corrupted or incompetent governments do not have what it takes to keep a stable economy within their country and thus the value of their currency often comes crashing down. This makes it harder for traders and businesses to import and export goods or services with other countries. 

The fact that banks monitor your activity with every penny you spend or save in your account is another problem area. Most banks share in the profit and loss that you incur via the accounts you open in banks while also charging you for simply keeping your money safe. 

Pros and Cons of Crypto Banking 

Cryptocurrency or any other form of digital currency is essentially bought through our local currency via different platforms that help us in investing in crypto banking. Unlike keeping your money safe in a bank, once you store your cryptocurrency in a digital wallet its value begins to fluctuate. It is all about the knowledge of the global market and patience on your end, you can either sell your assets for a profit or buy more at an even lower rate. The right decision at the right time can leave you with twice the profits to what you invested in the first place. 

The fear of using cryptocurrency has vanished with the presence of thousands of platforms and apps that help us make our trades online. Such platforms help us choose the most suitable type of cryptocurrency and help in inspecting the market for the right time to sell our assets for profits or to buy into assets that might later be worthy of profit. 

The cherry on top of using crypto banking is the complete unanimity that comes with it. You can keep a look at your assets yourself and not worry about a third party like that bank interfering in your activities. You can deal with people and businesses one on one without having to reveal your identity and in the comfort of your home. 

Even though crypto banking is starting to be known as the future of controlling money and has seen booming success in the past decade, it is still a skeptical idea for some. There have been hundreds of such cryptocurrencies that have come and gone, failing to keep up with its competitors. At this point it is about the popularity of one type of cryptocurrency over the other that can change the course for people that have invested into it. 

The online aspect of holding your cryptocurrency makes it less popular among more secluded areas where there is little or no access to the internet. For a population that is used to keeping their money in the palm of their hand it can be a mistrustful thing to rely on cryptocurrency. Moreover, unlike loose cash, cryptocurrency is far away from being used as an exchange for goods or services.  

Both these types of banking now cater to different sections of our society. Traditional banking may be under threat from the rise of crypto banking however it is still far from being used as a means of domestic monetary exchanges. For now, cryptocurrency holds the floor for large scale investments.  

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