How Cryptocurrency Could Possibly Affect The Global Financial Sector In The Coming Decades
Cryptocurrencies and other blockchain projects are currently shaping the world. Those who are vast and have been following digital trends would attest to the ubiquitous nature of cryptocurrencies and how it is taking over the media, data services and other niche. Bitcoin, the pioneering cryptocurrency was particularly launched as a payment system to rejuvenate the current cash and investment transfer offered by traditional financial institutions. Trailing Bitcoin in this regard include ethereum which was created to be faster in operations than Bitcoin, Ripple, Litecoin and Stellar to mention but a few.
The Revolution Against Financial Sector
We have been led over time by agents who claim to be helping us but in effects, are serving us by ‘over-lording’ their interest on us. We are stakeholders in a financial system where we have little or no control over our own money or assets. We are members of a party where decisions regarding what we own is not made by us, but by the financial authorities that believe they have the right to do so. Cryptocurrencies came to change all that. This revolution which is in its second decade is lead by Bitcoin, the first world acclaimed cryptocurrency.
Bitcoin, created by Satoshi Nakamoto penetrated the landscape as a highly encrypted blockchain initiative or system that would aid anonymous financial transactions, and investments which redefines our dependence on traditional financial institutions. In Satoshi Nakamoto’s original Whitepaper, this excerpt is culled:
“commerce on the internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust-based model…. What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two party to transact directly with each other without relying on any trusted third party.”
This statement clearly shows how Bitcoin is leading the revolution of the over 2000 other altcoins pursuing the sole purpose of wrestling financial control from established financial authorities.
How Cryptocurrency Would Affect The Financial Sector
Displacement of central banks:
Central banks are the major regulatory body managing the affairs of financial institutions in their areas of authority. They are established by every nation to manage the financial landscape of each nation. With the emergence of cryptocurrencies, the grip of these central banks is loosening and might be completely loosened in the coming decades
Stifle Politicization of Transactions:
There is currently a massive politicization in the global financial sector as some transactions are in the favor of few entities. With cryptocurrencies, this politicization would be reduced and possibly eliminated
Changes in Forex:
The emergence of cryptocurrencies would bring about the emergence of new markets. The frequent price fluctuations of bitcoin and altcoins have established a volatility upon which cryptocurrency trading can thrive. Several cryptocurrency exchanges have been established to aid this trading but the market cap of over $280,720,919,515 is still quite low when compared to forex market trading volume of over $5.1Trillion per day. The discrepancies in this figure would be bridged in the coming decades if this revolution succeeds.
With cryptocurrencies, a new transparent global crowdfunding can be conducted and enhanced by taking away the hassles or limitations by location. Now, funds can be transferred anywhere in the world in a matter of minutes
Challenges Dollar Standards:
Dollar, the fiat currency of the United States of America is the dominant currency and the standard upon which global trades are weighed on. As the leader amongst the pack, Bitcoin have the potential of taking this dominance from the dollar and this would change global commerce.
In the heat of this revolution, financial institutions are not just folding their hands, they are doing all they can to ensure that the activities of trading are hampered. Some central banks like the Central Bank of China have proscribed crypto activities and declared Bitcoin related activities illegal. This counter revolutionary action is the only war, Bitcoin and its cohorts have to fight and there is no prediction on how long this would last.
Cryptocurrencies would soon do to banks what emails did to post office. Central banks and financial institutions can however have a common ground and work out a means to coexist. As it stands now, Bitcoin and altcoins are being favored as it gives financial autonomy and independence to users. This alone would make their impact spread the more in the coming decades.
- Source: First Appeared Here
- Published Time: 2019-06-05 13:49:18
The views and opinions expressed in the article How Cryptocurrency Could Possibly Affect The Global Financial Sector In The Coming Decades do not reflect that of 48coins, nor of its originally published source. Article does not constitute financial advice. Kindly proceed with caution and always do your own research.
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