Will cryptocurrencies ever go mainstream?
12 July 2018 |
Despite their popularity, banks have failed to embrace them. Why?
Ever since bitcoin was created in 2009, there has been an explosion of cryptocurrencies on the market. Exchanges have been created and billions of dollars invested in them. Banks, however, have been reluctant to get involved.
Banks traditionally act as a middle-man when money is exchanged. When someone buys goods or services, the money is passed through a bank before it goes to the seller.
But cryptocurrencies work through blockchain technology. Each transaction is recorded on the system, and any change must be confirmed by all the users on the network to be considered legitimate. It gives a transparent view of how everything has been exchanged and cuts out the need for any middle-man.
“The huge problem is that most banks are taking a mediation role right now,” says Alexander Novozhenov, Head of the Sibcoin Foundation, the research and development arm of the Sibcoin peer-to-peer cryptocurrency. “Regular banks are trying to step back from these new technologies because of the fear of being eliminated.”
Can blockchain change the world?
Novozhenov thinks blockchain will revolutionise the banking sector. He expects that, in the long run, banks will benefit from not needing to go through a middle-man as it will mean faster payments at lower costs and cheaper rates in the credit industry. “Crypto has better technology than old-fashioned money,” Novozhenov says. “It is more transparent and better to track. Real money, which we have right now, can’t give us that kind of transparency.”
Originally published in BR Online: Digital Economy and IoT • July 2018