To understand the problem of the banking system, let ’s look at an example.
This is a Rube Goldberg machine.
It is a ridiculously complicated machine that does something really simple like cracking an egg.
Well, kinda reminds me of the financial service industry.
They slow things down.
It can take a second for an email to go around the world but it can take days to weeks for the money to moves through the banking systems across the city.
They take a big piece of the action.
They charge 10-20% just to send money to another country.
Today, if you want to send money to a friend or family member in another country, making an international wire transfer via an existing global interbank payment network (SWIFT) could take anywhere from 2 to 10 days, with average total fees of up to $50.
Believe it or not, wiring money internationally can be slower and more costly than sending that same amount as cash in a physical package.
And if you or the recipient don’t have a bank account – which is still the case for more than 2 billion adults worldwide – you would have to use a company like Western Union which can charge as much as $95 in fees to send $1000.
What’s worse, it’s generally poorer working-class people who are more likely to be unbanked and have to pay these fees to send their earnings to family members overseas.
They are growing problems.
To begin, they are centralized so they can be hacked and increasingly are.
Governments and banks, cannot be trusted to not debase our money because they have done in the past and will continue to do that.
The 1997 Asian Financial Crisis, the 2001 Dotcom Bubble and most recently, as mentioned above, the 2008 Subprime Mortgage Crisis which directly led to the 2010 European Sovereign Debt Crisis.
Each time caused by banks and the financial industry abusing the trust we place in them.
They exclude billions of people from the global economy.
For example, people who do not have enough money to open a bank account.
There are currently 7.7 billion people in the world.
The number of adult people is roughly around 5.5 billion.
Currently, roughly 2 billion adults don’t have a bank account.
It is an astonishing number.
All these people are using cash for their everyday needs.
These people pay school fees, trash, water, and electric bills in cash.
Do you think their money is safe?
Do you think the paper could last for years without damaging itself?
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Milos is an independent trader, with a background in journalism and publishing. Nomadic by nature, he’s lived in four different countries this decade. He’s fascinated by Blockchain technologies’ potential to reshape all aspects of our lives. Milos got into Bitcoin while completing his degree and hasn’t looked back since, writing about anything crypto-related. He is the co-founder of the Cryptoaims and he has a strong passion to educate people about this revolutionary technology.