Bitcoin versus Traditional Banking: Which is the best option?

Bitcoin has created a new way for people to store their money. By purchasing this virtual currency, investors put their money into something that is safer, more accessible, and has the potential for higher returns. However, there are significant differences between this digital currency and traditional banking. Bitcoin has been around for over a decade and has seen immense interest, challenging conventional financial institutions and their product range. Visiting a recommended trading platform like https://bitcoin-era.ro/ will help you become an effective Bitcoin trader.

Bitcoin versus Traditional Banking

This virtual currency is completely decentralized, and people can use it as a medium of exchange and a store of value. One can acquire this electronic currency from an exchange platform and secure their holdings in a digital wallet. This virtual asset ensures that its users remain anonymous as transactions recorded on the blockchain technology do not reveal the addresses of Bitcoin users. Also, this electronic money has an underlying technology known as blockchain that promotes peer-to-peer transactions. So, this electronic currency has limited human interaction because of blockchain technology.

On the other hand, banks are the dominant financial institutions in the world that have been available for many years. These banks provide financial services to those that meet their needs, including loans, savings, and other monetary requirements.

Nevertheless, banks have numerous problems associated with them due to their centralized nature. Bank transactions are also relatively slower than this electronic money. Below are the main pros and cons of the banking system versus this virtual currency.

Financial Inclusion

When creating an account with a bank, the bank will request one to provide lengthy paperwork and in-depth background checks. Banks are also quite biassed in providing loans and other financial services to a particular group of people.

On the other hand, this digital currency promotes financial inclusion as there are zero barriers to entry. This digital currency does not require lengthy paperwork or identification to operate or create an exchange account. When purchasing this electronic currency at an exchange, you only provide the platform with some personal information but no background checks or credit scores.

Moreover, transacting using this virtual asset does not require one to be at a specific location. Instead, you can transact with a person in a different country using this virtual asset from the comfort of your home.

Security

Through the use of blockchain technology, these virtual money transactions are permanent and hence irreversible. Therefore, Bitcoin users do not suffer from chargebacks which can be costly. Also, this digital currency uses a peer-to-peer network, thus ensuring that transactions do not go through a third party for authentication. Eventually, these electronic money transactions require minimal human interference.

However, the banking system, especially online systems, can be hacked, among other fraudulent activities such as money embezzlement. Also, with banks requesting their users to fill out forms regarding their personal information, this information can land in the hands of hackers, which can be dangerous.

Accessibility

Banks operate within certain hours; for instance, on weekends and during holidays, banks remain closed. Moreover, they are not open 24/7 but function within specified hours daily. Therefore, at times transactions may take days to clear. Also, banks require one to be physically present when making a transaction. Sending remittances using banks can be pretty challenging.

This digital currency, on the other hand, operates 24/7, even on holidays and weekends. So, this virtual currency makes sending remittances possible and fast. Also, as an entrepreneur who wants to purchase a product beyond your borders, you can use this digital currency to send money. Therefore, this digital money enhances cross-border transactions.

The Bottom Line

Both the banking system and Bitcoin have their advantages. However, this digital currency has pros that outweigh the traditional financial system. Moreover, you can choose to transact using both techniques.