Topic: Can bitcoin completely erase the Traditional Banking System? (Read 274 times)

This question has been emerge since the earliest day when I first know about Bitcoin, and even until now when Bitcoin has been globally accepted, I still doubt that in my lifetime there will be time when Bitcoin will be replacing the Banking, even in just one country. Government still needs Bank, and government will force people to use Bank if they want to hold their citizenship, Bank is part of government's financial system. If Bitcoin will be fulfilling it's purpose to become a currency I guess Bitcoin will be just an alternative way of payment, but I mean no one knows.

Bitcoin is a currency. It can't replace banking. Banking is an industry, not a currency. It can replace checking/savings accounts of banks, but banks do a lot more than that. Now, it is possible of course to build a banking system (perhaps a combo of decentralized and centralized services) that work with bitcoin instead of fiat, but if Bitcoin took over from fiat (extremely unlikely) in the future a lot of the fiat banking system would probably just pivot to be the banking system of the Bitcoin system.

Yeah, I think it is better that way. Let them coexist so that people can have more options and then break the monopoly that the traditional banking system has. This will create competition and further strengthen these institutions.

I don't think it can complete replace the conventional/traditional banking system. It will do very well to serve as an alternative to the traditional banking system but can not completely take it's place.
Although what I see happening is that the Blockchain technology can be adopted by the traditional banking system.

Bitcoin won't replace the traditional financial system, which is centralized. Bitcoin could help the traditional financial system with cross-border payments and the digitalization of payment systems. A lot of people in the world are illiterate, and there always will be. So definitely, we need the traditional financial system forever. I don't see any chance to replace it with Bitcoin anyway. A centralised financial system would integrate blockchain technologies to push traditional payment systems to another level.

The mistake that lots of people make is that they don’t even know the reason why bitcoin was created, bitcoin wasn’t created to erase the traditional banking system, and I am sure the government won’t even allow that to happen, bitcoin was created to serve as an alternative payment method. The government is using banks for money laundering, and they are using banks to track lots of people down; they are monitoring people’s transactions. The government will do everything in its power not to allow the banking sector to die off.
 
We are just fighting for bitcoin to be an alternative currency, and most governments are against it, they are doing everything to kill bitcoin. Then,  just imagine that we are fighting for bitcoin to be the main payment method. What will be happening currently?

You are completely right, the traditional banking system and bitcoin can actually co-exist together in our society, and this is especially for our older generations who are not well educated enough to understand the importance of bitcoin and how to operate in it, I believe satoshi himself or theirselves never invented bitcoin for it to completely wipe out the traditional banking system, but rather, it should act as a better alternative to people who truly value financial decentralization and privacy, which is what bitcoin is doing today.

So, in the nutshell, both bitcoin and the traditional banking system can actually co-exist, and bitcoin acting as an alternative will give people to option of chosing decentralization, privacy over centralization and censorships.

I don't think bitcoin will replace traditional financial models such as banks, because by its nature bitcoin is decentralized, while banks are centralized, from here it is no longer connected. why not just go hand in hand, don't overlap each other, maybe more precisely bitcoin is an alternative. I don't know what the future holds, but for now it seems quite impossible to abolish the banking system, because its foundations are really strong. rather than deleting, I think collaboration seems better. I don't know the exact use because this is not my area of expertise, but I'll try to find out a little bit, such as cheap inter-country transfer fees or transaction speeds that take a fraction of a second.

Actually, It's not that much hard to imagine. The way inflation rate is increasing in every country and the way the government is printing money, people can no longer rely on paper money. I think our generation will be the last to use paper notes, from the next generation people will start using electronic currency completely. And with the way Bitcoin is gaining popularity, it is not impossible for Bitcoin to gain global acceptance like the dollar.

YES, at present the government does not want to accept it because of its high volatility. However, since its supply is limited, its volatility will decrease as the day goes by as the number of customers increases. Then there will be no obstacle for the governments of all countries to accept it.

I totally agree with you. Bitcoin can aspire to become a serious alternative to the bank system, but replace it, no, I don't think so, or at least at the moment I really struggle to see something like that actually happen. Maybe in 50 years the situation will be completely different but, again, it's hard to imagine. Being a reliable alternative is already a great goal.

I don’t think so. Bitcoin was not invented to replace the traditional banking system but to serve as an alternative to it. This is what has brought about competition between bitcoin and the government because of some advantages bitcoin has above the traditional banking system. If the government will not have a control over it, they will never allow the use of it legally or adopt it as a legal tender in the future. The bitcoin spot ETF is just a perfect example to me of the government trying to manipulate the market since they can’t beat bitcoin, but luckily enough to their disadvantage, it hasn’t had any major impact to the market since it was approved. They couldn’t beat bitcoin and they tried to join bitcoin but they didn’t know bitcoin is not an asset to be manipulated like others.

For instance in the second and third world countries, because of the high rate of illiteracy, the elderly ones prefer to perform transactions using the physical fiat, many of them find it difficult to use credit card, mobile banking etc. So how do teach this set of persons how to use, hold or safely store Bitcoin? Even if it was imposed on them, it will have a deliterious effect as most of them will be victims of wallet hack. So we may get to see more Bitcoin adoption in the near future but it certainly cannot replace traditional banking.

Has it disrupted the financial industry? How? I mean I didn't see any disruption regarding the banking industry. Yes, they might be affected because Bitcoin is slowly getting more popular, but it didn't get disrupted.

Now to answer your question, Bitcoin will not completely eradicate the traditional banking system. First, Bitcoin isn't created to do that thing. Second, I don't think that the bank owners will just allow a currency or an asset whatever you want to call like Bitcoin will affect their business. Third, yes we're seeing an increase in Bitcoin users every single year, but the reality is, that there are still many people around the world who prefer to use banks because for them, their money is safer there, and there's nothing wrong with it. If your financial literacy is low, your only option to store your money is in banks.

Overall, enough of this daydreaming. Enough of thinking that Bitcoin will eradicate the traditional banking system. Bitcoin will stay, and at the same time, banks will stay. They will co-exist for a long period of time.

Given that I don't believe bitcoin can completely replace the established banking system, I do believe it has the ability to have a big impact on it.
Since bitcoin allows for peer-to-peer transactions without the use of traditional banking infrastructure, it might be able to help those who are underbanked or unbanked by providing financial services to them.
Since the traditional banking system has a well-established infrastructure and is widely used, I believe that a full transition to bitcoin would require significant adjustments, broad adoption, and an intensive learning curve.
In my opinion, traditional banks and cryptocurrencies can coexist for as long as they both serve distinct purposes and preferences within the larger financial ecosystem.

Bitcoin was not built to take control over the traditional banking system, it here to provide aids to those who want to be financially independent and not to take control of the money system it can’t be enough and it can’t stand to serve that purpose.

We can only use bitcoin in the way we are using it institutions which buy and invest on it why we can hold them it have limit to its usage, and the traditional banking system also have a role to play in the society both are here to stay and serve there different purposes even as the banking system are looking for means to dominate and control the bitcoin market which is still completely impossible to some point.

It will be possible to talk about the popularity of bitcoin when every second housewife has it. So far, the popularity of bitcoin remains only within a certain circle of people. Many have heard about it, but not many own and use it.

Come on, tell us more about "disrupted the financial industry" by the bitcoin. We will listen to this fairy tale.

If this ever happens at all. Firstly, few governments will allow the traditional banking system to be replaced, and secondly, technical changes to the bitcoin will be required. Or have you already forgotten about the high commissions on the BTC-network and the long queues to confirm transactions in the mempool?

These functions are not included in bitcoin and bitcoin was created as a replacement for traditional money, and not for the entire banking system with all its variety of services.

And this alternative option is electronic digital money. But I guess that bitcoin was unable to gain a foothold in this niche and is already challenging the stock market (as an investment instrument) with its crazy profitability compared to stocks and securities.

Most likely not, but it can coexists as an alternative payment option and can be used by everyone just like internet banking or paying to buy something online and there are lot more use cases for bitcoin even if the traditional banking system exists. So far Bitcoin can't handle the number of transactions that is processed everyday by banking system even the transaction fee became crazy high.

I don't think that it's very likely for the traditional banking system to disappear, with or without bitcoins there isn't much chance for the government to abandon the banks. The economy, the banks and the government are all connected to each other. Because the banks mainly deal in fiat money the government will always come and bail them out. We have seen that happen in the financial crisis of 2008. The banks are just too big to fail and would take down the whole economy with them. The only option would be a very slow transformation where over time people take money out of banks and fiat. The problem then would probably be the government that is afraid to lose control of the money supply and will try to revert the process.

While Bitcoin has gained prominence as a decentralized digital currency, the complete eradication of traditional banking systems seems unlikely. Bitcoin operates alongside traditional finance, offering an alternative rather than a replacement. Regulatory challenges, scalability issues, and the need for widespread acceptance pose barriers. However, Bitcoin's potential to reshape financial landscapes, promote financial inclusion, and serve as a store of value continues to spark discussions about its evolving role within the broader financial ecosystem.

When did Bitcoin disrupt the traditional banking system industry? We still have banks, we still have fiat currencies, and you're still using fiat currencies every day, how can you say that bitcoin has disrupted them? Bitcoin has never and will never have the ability to disrupt the traditional banking system, let alone replace it. Even if bitcoin has the ability to do that, do you think it will be easy for the government to let bitcoin do it? If bitcoin really had the ability to destroy the banking system then I don't think bitcoin could exist and we could use it to this day.

I don't think Bitcoin will replace the banking system that has been running for centuries. But it became cool when Bitcoin was accepted by banks as a digital currency which they accepted at a value adjusted to fiat.
Today, more and more people view Bitcoin as an investment asset, rather than a currency. This is an obstacle to adopting Bitcoin as an alternative currency that can be used as a means of payment in a country. and it will not harm the system that has long been built and used by banking.

If the country make Bitcoin become centralized or adopting a stable coin, it's not going to change anything.

If the reason is just the reversibility, the government can just create their own centralized exchange and force people to use that, then it has no difference with banks. Although the government guarantees to refund the money in case the banks is bankrupt, have you ever get such experience and the government refund the money?

I think bitcoin will never be able to eliminate the existing banking system, and as we know bitcoin was created for alternative payments and investments, not for banking, so it would be too naive if we hoped that bitcoin could replace traditional banking in general.

For me it's not gonna erase the traditional banking system because we are living in a world that still needs stable banking system and we are not yet in the stage of a movie like scifi world of cyborgs or humans that uses crypto as a normal currency in everyday life and one thing that also invalidate the aspect of making Bitcoin as the main banking system is it's volatility meaning it is unstable.

I think the current banking system is very difficult to remove or replace with bitcoin. However, there are still many pros and cons regarding Bitcoin. There are still many people who don't know, or haven't accepted it. In addition, banks have guarantees from the government, while bitcoins do not have any guarantees, so if your bitcoins are stolen, there is no way to return them, and there are many other contradictions. So, I think for now bitcoin can only be an alternative and investment tool.

Bitcoin cannot erase the traditional banking system, atleast not for now. There is low acceptance of bitcoin in doing what the traditional finance is doing. I just feel Bitcoin wasn't meant to replace the traditional finance system but to expose how traditional system has been corrupt and manipulated people to his own will and that is the people controlling the traditional finance.

Bitcoin teaches us how to improve privacy that we least café about, bitcoin makes people understand that there is freedom in sending value from one place to another without been disrupt by anyone, this is what Bitcoin censorship to resistance showed people, Bitcoin shoes freedom and how to be independent of the traditional market and you don't have to leak their ass to make them send your own money the time they like.

However, Bitcoin will have been competing with the traditional finance but it is slow speed of transactions comfirmation and transaction fees drawback it's merit, many has tried to push layer2 scaling solution but even the bitcoiners don't use it often because of the complications of node routing and channel opening and closing and more importantly the centralization.

people should understand that this cryptocurrency is not here to replace our traditional banking system but an alternative option that we can avail given the circumstances. because for example, if we need to pay something online and there's crypto payment available, and the fees are low, and you have crypto - then of course, you will think of using such route of paying crypto if you believe you have advantage of using such at that given instance.

traditional fiat system won't go away as for one, this financial system is handled by the government, hence, they have control on this monetary system. the main reason why bitcoin or any other crypto is having hard time in terms of government acceptance because of the fact that they can't have the full picture of this digital system. it is like there are holes everywhere.

I think not; is there a possibility? Maybe? If you're sure that bitcoin will stay for a very long time, don't get me wrong. I'm into bitcoin and I want it to stay forever, but as stated, there is only a limited amount of bitcoin that we can mine. Traditional banking runs most of the world's financial systems. Imagine if you replace it. There will be a lot of work to do. I work in a bank, mainly in data migration, and I'll tell you, banking is so complicated that it can't be easily replaced.

 It's easy to say that we can replace banking using crypto currency, but there's a lot of things going on inside the bank that you didn't know, so I would say no. Bitcoin or any cryptocurrency can't erase or remove banking systems because if you do so, you strip away the financial system in the world. It's a possible dream, yes, but if you look realistically, it will be hard to migrate banking systems into crypto currency.

That is too far from happening. It won't replace the traditional Banking System or people using this over fiat money but instead, it remains an alternative. In fact, that is the main goal of its creation, not replacement. Even these days, only a few adopted Bitcoin as a currency but the majority see this as a potentially profitable investment. If people are buying Bitcoin today and in the future, that could be for investment purposes.

Until the fees never settled down, it was difficult to influence people to use this as a currency instead of an investment. And for some reasons like risk and transaction delays, people never change their minds.

Bitcoin will never end the traditional banking system, it is an alternative to it.

Bitcoin is freedom, including whether to use it or not to use it. Bitcoin is a choice of protection against the bad decisions that governments have been making for years regarding the financial system.

It has everything to shake the core of the traditional banking system. And if the banking system doesn't revolutionize their system, then it is bound to be erased by cryptocurrencies. People will move the more affordable and taxfree system eventually and the govt can't stop you from doing that, so either the traditional system upgrades and move on the standards of bitcoin and cryptocurrency or it'll be gone.

Even if digital currencies and cryptocurrencies will become more popular with time, the traditional banking system will still be in usage and not completely erased. There are people who have never tried investing in bitcoins or using bitcoins as a means of payment and they would never use it, we have to accept that, and there are also people that use bitcoins currently but later on will abandon it and switch back to the traditional banking system for use maybe due to reasons special to them. Not all investors and people who use bitcoins now will continue using it, that is normal.

It’s definitely not replacing it. Satoshi had the craziest idea to create this huge project if he with such vision didn’t see it totally overthrowing the bank system then there is a pick there that it can’t. In as much as bitcoin has many advantages that many of us have adores it is will want it to be the main currency for exchanges there are demerits of it that isn’t taking it to that level of total replacement of the traditional currency. A clear example of this; is the ongoing crisis surrounding the congestion on its network making transactions slower except if you wish to pay the erroneous fees to get it confirmed in the next available block.

Also bitcoin might look a bit confusing for old age and less educated people and also works in areas where they are only internet network. All this wouldn’t allow it take the center position someone like me will want but honestly I like it been an alternative and a better one like this to ease my problems that the traditional system couldn’t solve, like easy cross boarder transactions and a very good store of value

I don't think so. Bitcoin is created to be an alternative to ever controlling banking system but it doesn't mean that it will replace it. There are so many reason why banking system/fiat system couldn't be demolished, one reason of it is the laws that currently exists in each of our countries. I also don't think that 100% of humans would want the ever comfortable banking system be demolished by bitcoin which most likely a new thing to them. There is a fear of the unknown, and I believe that most of the humans are still haven't tried or don't have any bitcoin knowledge.

Bitcoin isn't going to erase or replace traditional banking system. As far as I can see, banks are actually introducing Bitcoin and crypto assets to their offerered services to customers, so they are bringing crypto to the traditional banking system in a centralized way. It means you won't have total control over your assets, like you would in a decentralized system. You buy Bitcoin, but who controls it are the banksters. You can't even send your BTCs to another wallets and addresses, as they only allow you to sell it for fiat and then use the fiat as you wish.

Mortgages, loans and financial services can be offered through Bitcoin currency, but not by autonomous individuals inside a decentralized system. Rather, such BTC services will still be offered by banks. The system adapts itself to the current conditions to remain untouchable and ruling the masses. The idea we, independent citizens, are going to be "free" someday in this world from financial institutions and centralized parties is just an illusion.

This is not so true, there is no probability of BTC replacing fiat or the BTC blockchain replacing the traditional banking system. BTC is a decentralized system, and so i don't think it is possible to have a centralized government in control but with a prevailing decentralized financial system. The government have to be accountable for financial matters, both in decision making and issuing currencies, and they can only do that with a currency and system they control.
Debt, loans, insurance, mortgages are all very important and so many people need them in their businesses and personal life.

Bitcoin can't erase the traditional banking system because Bitcoin has nothing to do with it. What is a traditional banking system? Banks give loans, receive repayments and also accept deposits to give away money again with interest. How can Bitcoin replace that? Do you think that loans in such a volatile currency is a good idea? Or do you think that banks will lose their control and influence? Bitcoin can't handle large volume of transactions and how do you think that it will handle massive volume that banks have? Bitcoin was not created to erase the traditional banking system, it was created to offer you P2P payment method but it wasn't meant for widespread acceptance too. Read Bitcoin Whitepaper, understand how Bitcoin works and you'll understand that Bitcoin doesn't have the potential to challenge the aspects of traditional banking system. It's a different thing.

Nope! Bitcoin cannot replace the traditional banking system in any way. It can provide some alternatives to some small number of people for sure. But Bitcoin doesn't have the capability to handle the scale of a mainstream banking system. So if you are under any such kind of influence please come out of that. Bitcoin cannot handle the volume that that traditional banking system handles in 1 hour. So let's not daydream about the capacity of Bitcoin and use it as a parallel currencies system like it is now.

The main purpose for Bitcoin creation was for people to have alternatives rather than depending on the fiat system alone. Bitcoin and Fiat are in no competition on who will extinguish each other. But for the first time in history people are now presented with opportunity to choose which means they like to interact with their peers aside the traditional banking system of Fiat . So I don't think Bitcoin will erase the traditional banking system.

Never doubt the ability in change, you could experience something totally different from you what you least expect, one thing am sure about is that the future will tell more of this, but from what we are currently seeing, there's high probability for digital currencies prevailing over time.


And who want to remain in debt with these financial banks anymore, when all they could do is to inflict us with high demand on everything they offer us, while cryptocurrency can make us have the opportunity of getting the profitability that can help us clear all our debts.

governments (patent holders of traditional money) want to retain control of their economy
they have laws protecting it
tax, minimum wage, valuations of income, court fine settlement, etc

bitcoin will not replace fiat, but bitcoin is an open choice to have besides fiat
..

its the same argument as will EURO replace dollar.. no, america will stick to using the dollar for american citizens and american government. but people can choose to have some euro and spend it with euro accepting businesses.

governments themselves can patent their own new money design. EG CBDC which they can introduce and work beside their paper bank note money and eventually over take it. but by remaining their patent they get to control the circulation and rules for how people bearing their money use it

Bitcoin has never erased traditional banking system, not now and will not be able to do this in future.

Be realistic and if you need examples.

You can see paper books/ newspapers and e-books, e-newspapers and you will see the same with paper/ polymer fiat currency, digital bank transfers, cryptocurrency transactions includes Bitcoin transactions. Soon even with CBDCs (Central Bank Digital Currencies), Bitcoin will only co-exist with other currencies, in bank system and in cryptocurrency.

even though bitcoin has experienced increasing adoption in recent years, that is not the reason that bitcoin is able to eliminate banking globally, the reason is; firstly bitcoin was developed to be a digital currency not for banking, secondly most people globally still depend on banks for their various needs, thirdly banking is one of the main pillars in the global economy, the fall will have a massive impact, and finally banking will not allow their services are replaced by bitcoin.

these reasons alone can refute the statement that says that bitcoin or other altcoins can eliminate the role of banking, because banking is still relevant for people to use as a place to fulfill their various financial needs and bitcoin/altcoin is not yet suitable for that.

I understand your point, you are looking at it from the perspective of the much fascinating evolution of currencies from the Barter form of exchange to the transformation of the currencies over the centuries.

The very known first form of money was through the trade by barter system where people engaged in the direct exchange of goods and services. During this period, the people value worths of goods to be exchanged by their desired goods or services. But because there was inefficiency and limitations in this form of exchange or transaction, people of the ancient time thought of the need to migrate to the commodity money.

In this kind of transaction, exchanges where done with items that had value in the eyes of the people of then, such items included precious stones, cattles, etc and these commodities which also included salts were widely known, valued and accepted in markets. From these commodity money, there was the introduction of the metal coins which were the currencies we all experienced at a point in time and are still experiencing today in some parts of the world. Governments also adopted and started minting these currencies for the market and individual use.

At a point in time, the government then introduced the paper money to ease trading since most of these metal coins where heavy and there was a monumental thought that the metals could also be transformed to just paper monies where you have the value of the money printed on currencies. These improvements also led to the invention of banknotes and the banking system itself which is yet one of the most valuable industries in the world now.

Now, with the advancement in the emerging internet, information technology and the fintech, these notes have been digitalized which brought about the advent of the cryptocurrencies through the invention of the Bitcoin currency by Satoshi Nakomoto as another digital currency that have its own value based on the decentralized blockchain technology. These cryptocurrencies operate independently and are only valued or devalued by its users making in it possible for more transparent and universal transactions.

Having journey through the abovementioned evolution of currencies, I think it is only normal for a curious mind to ask if it will replace the current paper money and banknotes. The most sincere and straightforward answer to give to such question is that the future of Bitcoin is still very much unpredictable and it will not be a decision that will be taken by people alone but governments of different nations, and with the current realities, that won't be possible any moment from now.

As much as I like Bitcoin, I don't think it can replace the traditional banking system. Bitcoin is a good alternative, something that can allow people to bypass banks in many ways. But Bitcoin doesn't come with assurances that the money will be safe, doesn't come with centralized responsibility for funds (and someone people can blame if things go wrong), doesn't come with customer support, loans, insurances, etc. So while it's an alternative, it doesn't cover all the things that banks do. More importantly, banks have established themselves over the years, and a lot of people trust them.

I'm sorry to say that I think you're asking the wrong question. The relevant one today is whether the banking system, especially central banks and public authorities, are going to be able to get their hands on Bitcoin. Not to wipe it out but to control it with ever stricter regulations involving KYC and transaction censorship.

Take note that BTC was not created to erase the traditional banking system, that is where people seem to get it wrong; fiat and the traditional banking system will continue to exist for a very long time.

BTC was created to be a censorship resistant and permissionless alternative to that system, and for people who want to control their finances. But obviously not everyone would want to do that, there will surely be more people who are totally comfortable with the present order of things and do not want a change. Then even for the people who want to control their finances through BTC, they must still have a certain percent of it in fiat for spending and other necessary payments.

This is what we have discussed over and over again on this forum. Bitcoin is existing not to be a substitute but an alternative to fiat and banking system. Fiat has some characteristics that bitcoin do not have. Also bitcoin has some characteristics that the banking system and fiat do not have. They are alternatives to one another but bitcoin is far better and worth holding as an investment.

Not really, I mean it can work as an alternative to what is being used by millions on our planet but it will not be able to overtake and become what traditional banking systems are.
I am sure it says Be your own bank however you surely relate every Bit of Bitcoin with a intrinsic value of a dollar which is based on the real cash, hence Banks control it either way.

For one, I would say that moreover that Bitcoin has gained popularity and also disrupted the financial industry , it is only safe to say that it is unlikely to replace the traditional banking system in the nearest future. I mean , mortgages , loans and financial services are functions that are carried out by these traditional banking systems. But then, Bitcoin and other cryptocurrencies have the potential to provide alternative options and challenge certain aspects of the traditional banking system .. What do you think?