The virtual currency has blazed a trail, but rather than bitcoin it’s more likely that banks will use their own cryptocurrency spil the smeris of switch.
Bitcoin is having a particularly veelbewogen 2018 so far. The planet’s largest cryptocurrency has reached fresh all-time highs te the lead up to US Securities and Exchange Commission (SEC) ruling on a proposed BTC exchange traded fund (ETF), earlier this year. Following the rejection of the fund, the price dropped all of a sudden before recovering shortly.
Further uncertainty overheen the scalability of the currency more recently has caused the price of a BTC to plunge again ($1033 vanaf Bitcoin on March 27, according to bitcoin exchange CEX.io) but the very latest trends at the time of writing suggest that the debate overheen block-size – for the layperson the number of transactions possible at any one time – has cooled off. At least for now, that is.
Of course, all those supportive of the cryptocurrency would love to see some form of widespread adoption soon. A growing movement to see a “cashless” planet, and the inherent advantages of bitcoin overheen current banking practices (particularly those relating to transfer times and costs) make the digital currency a potentially attractive avenue for global banking giants to explore.
Bitcoin could absolutely revolutionise the infrastructure of our banks, providing a cheaper, quicker, and more convenient alternative to the likes of wire and single euro payment area (SEPA transfers, if given the chance to do so. However, it is unclear at this uur whether its total potential ter the banking sphere will everzwijn be realised. There are many negatives about the currency that banks would have to overcome, or disregard, to fully integrate their systems with the fresh technology.
Banks are certainly interested ter BTC and blockchain technology
There is no doubt that many banks are very interested ter bitcoin. Global banking think-tank Citi Research issued a report ter June 2018, entitled ‘US Digital Banking: Could the Bitcoin Blockchain Disrupt Payments?’, stating that “digital currencies are better tooled to open up fresh markets and reach fresh customers”, however, it also goes on to optie that “today’s centralised payment systems are already efficient enough for today’s commerce”.
The report resumes, raising significant points about the influence of BTC and other digital currencies could have on markets where payment systems are lacking. Thesis emerging economies could quickly benefit from the lack of infrastructure required to use the currency. While certainly not a one-sided coverage (the shortcomings of BTC that Citi Research found are detailed straks te this article), the report does mention the potential for “radically fresh [banking] models” coming te the not-too-distant future, based on innovations like bitcoin, combined with “mobile, machine learning, big gegevens and the Internet of Things (IoT)”.
Additionally, Japanese banking giant the Mizuho Financial Group has just announced that it is nearing completion of an titillating fresh project using the bitcoin blockchain for securities transfer. Mizuho has shown excellent rente te the technology surrounding BTC recently, and has even invested capital ter bitFlyer, Japan’s largest bitcoin exchange.
While precies details of the Mizuho research are unclear at present, a spokesperson for the institution stated that there were plans to proceed studying bitcoin and blockchain technology and the advantages such systems can have overheen traditional banking methods.
However, despite pockets of rente on bitcoin from the banking sector, large obstacles to widespread bitcoin adoption remain. The Citi Research report goes on to make some interesting observations on the perception of bitcoin from the banking perspective.
The document states that “immutability, or the incorruptibility of bitcoin’s blockchain”, isn’t necessarily “well-suited for money movement”. It then proceeds by highlighting the high cost of switching fiat currency into bitcoin and vice versa, and to point out that the “proof-of-work” confirmation method working on bitcoin would mean an ever-increasing transaction toverfee would be levied on transfers spil miners request greater payment for their work, considering the enhancing difficulty of successfully mining blocks.
Future of bitcoin with banks?
While it’s bot established that banks are lagging the surplus of the world ter terms of technological innovation (ter 2018 should it indeed take such a large percentage of the transfer amount and so long to send funds from one country to another?), it seems unlikely that bitcoin itself will be the innovation that revolutionises the banking industry.
There are already several banks across Scandinavia and elsewhere that are working towards a “cashless” future, with some form of digital currency taking the place of banknotes. Additionally, a group of four banking sector giants of are ter the process of creating their own form of blockchain token to facilitate monetary transfers.
Clearly, thesis ideas take cues from the forefather of blockchain technology, bitcoin, but perhaps the lack of control, and decentralised nature of the asset makes BTC too much of an unknown quantity to integrate into the banking world decent. From their point of view, it would make very little sense to build systems around a protocol that requires global support from its end users to make switches to the way it works.
Take today’s block size debate, for example. If a similar switch wasgoed sought from the banking sector, it would not be implemented unless there wasgoed sufficient support among the miners to make the switch to the network. This lack of control is something alien to global banking powers, and is, spil such, an unattractive quality about the cryptocurrency for the purposes of banking.
To conclude, it seems that the technology that powers bitcoin, the blockchain, has excellent support among many of the banking world’s top brass. However, it emerges unlikely that any of the world’s major banks will integrate the actual currency itself with their current methods of operation.
While most agree that banking reform is necessary and inescapable te the future, they seem reluctant to fully secure their colours to the bitcoin paal. The lack of central control deemed by many spil bitcoin’s most attractive asset naturally puts the banking elite off. Moves to create tailored banking cryptocurrencies highlight this fear of the unknown.
One thing is certain, the inefficiencies of today’s banking practices will form the impetus for switch within the sector. However, the voertuig used is much more likely to be some form of bank-created cryptocurrency which permits finish control, rather than bitcoin itself.