Are banks becoming obsolete? The future of money
What started off with barter a long time ago, gradually changed into trading coins or shells and then it changed into the money as we know it.
But what will happen with money now that the world is transforming digitally?
In the physical world, money transfers are slow. They move at the speed of humans. In the digital world, money transfers are a little bit faster. But still, they only move at the speed of banks. We are in need of trusted entities who are the gatekeepers of our money transfers.
But what will happen if we change the money as we know it now into currency of only digital series of letters and numbers, rather: ‘cryptocurrency’. The best known form of cryptocurrency are bitcoins. This form of currency consists of special software updates that monitor all transactions. Every computer connected to this network has a copy of all money transfers. This means that every person in the network knows what transactions have been made. (Mind you, although every transaction is public, the transactions are anonymous, so privacy is protected). Six times per hour, the system adds files to all accounts. These files (or ‘blocks’) contain the new payments that have been made. All these files (or blocks) together form a chain: the block chain.
Because every computer connected to the network has to agree to every payment, no human checks are needed.
These cryptocurrencies eliminate the need for intermediaries, such as banks. What’s more, with cryptocurrency, one can pay to whomever he or she wants. This can be done directly to the other person, without any interference of customs, tax offices, or whatever. Of course this technology has its risks, especially related to security and legislation but it also poses great opportunities.
What do you think will happen in the future?
Sources:
https://www.rabobank.com/en/about-rabobank/customer-focus/innovation/tech-trends/articles/cryptocurrency-or-the-future-of-payments.html
http://www.coinbeurs.nl/wat-is-crypto-currency/
https://www.youtube.com/ watch?v=Z22eElccb3E
http://themerkle.com/wp-content/uploads/2015/04/february-6-2010-bitcoin-market-established-mod.jpg
