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The real problem with centralized banks and why encryption is inevitable

The real problem with centralized banks and why encryption is inevitable
 
    As highlighted in the Bitcoin white paper published in 2009, Bitcoin, invented by Satoshi Nakamoto, had a compelling goal. Eliminate the need for a trusted third party, enabling two willing parties to transact directly without suffering from the weaknesses of trust-based models.
 
    but why? The reason is that modern banks have flaws and disadvantages, the effects of which are ultimately felt by consumers. Due to their centralized nature, they are subject to human intervention. They can be unreliable, vulnerable to security threats, charge large fees, and even be biased.
 
    These exact issues and weaknesses of the world’s current financial systems are exactly why cryptocurrencies will pave the way for a better banking and payments experience in the future.

 
 
    unreliable
 
    Traditional centralized banks can be unreliable. If you use mobile banking and their servers are down, you won't be able to access your finances unless you go to your local ATM and withdraw money in paper money. The problem here is that ATMs may also be unavailable, especially for people located in developing countries.
 
    Imagine the trouble you have to go through. If you need money in a time-critical situation but your bank's mobile app is under "maintenance". It's unpredictable, but it worries a lot of people. Ironically, you entrust your money to the bank and in return they end up being the gatekeepers of your finances.
 
    provide you with more
 
    Cryptocurrency Price Prediction: $100,000 Bitcoin May Be Faster Than You Think 'Bitcoin ban' fails to crash markets as Twitter historically increases crypto payments First, cryptocurrencies on the other hand never cease service because they use automated systems because their software doesn't inherently require much Human interaction or intervention. Therefore, they can be accessed at every time of the day, including weekends and holidays.
 
    Today, cryptocurrencies are often purchased through crypto exchange platforms and stored in safe and secure crypto wallets such as Metamask or Ledger. These digital currencies are decentralized and they operate in a very secure manner. All you need is your computer or mobile phone and an internet connection.
 
    crazy charge
 
    Banks charge more than $15 billion in overdraft fees each year, according to the Federal Consumer Financial Protection Bureau. That's $15 billion of hard-earned money that people have taken from pocket to pocket. Overdraft fees should be illegal at this point. With overdraft fees, a simple cup of coffee can go from $3 to $35.
 
    This isn't the only expense to worry about. Fees can take many different forms, including late fees, returns, use of out-of-network ATMs, money transfers, inactivity, and international money transfer fees.
 
    When a person needs customer support, they may even be charged for asking a real person for help. Cryptocurrencies, on the other hand, don’t charge you that many transaction fees.
 
    The most common crypto transaction fee is called gas fee, which is basically a reward for miners to put a transaction on the blockchain or execute said transaction.
 
Transactions may take eternity
 
    For centralized banks, transactions can take a long time, depending on the type of transaction. For large cash or international payments, it may take a week or more. At first this seems ok, but what if you are in a situation like the Ukrainian-Russian war. You don't have a week, you have a few minutes.
 
    Unlike traditional banking systems that need to follow queues and protocols, cryptocurrency transactions are very fast. Therefore, cryptocurrencies can process more transactions per day than the traditional banking system.
 
    This capability elevates them above banks, as they will provide the economy with better possibilities for rapid expansion. Cryptocurrencies have no business hours and are available 24 hours a day, 7 days a week.
 
    As such, cryptocurrencies have proven to be crucial to ushering in the era of post-banking, post-cash finance.
 
    human bias
 
    Because banking transactions and financial services rely on account numbers and personal information, they are prone to bias. In the event of a dispute with an official at a certain bank, the Financial Services Issuing Officer can deliberately delay the transaction or, worse, freeze your assets. Every month, thousands of people's life savings are frozen by banks and exchanges.
 
    A modern centralized bank owns your demographic data, background information and spending habits. Believe it or not, the way they treat customers is sometimes influenced by data. But it could be worse; banks could arrest their own customers.
 
    In late 2021, Joe Morrow, 23, was arrested after claiming that Bank of America refused to cash his checks after racially profiling him and claimed his salary was fake. Of course, Joe Morrow got justice and was reconciled, but that doesn't change the fact that central banks can be influenced by simple human bias to make bad decisions.
 
    Cryptocurrencies are completely out of the control of third parties. This decentralized nature minimizes human interaction, which makes them unbiased. Cryptocurrencies don’t judge or describe you, central banks do.
 
    data collection
 
    Today, many platforms do share your data with third parties. But it is one thing for social media platforms to collect your data, it is another for banks to collect your sensitive information (such as passport or ID information, residential address, SSN and employment information).
 
    For banks, these types of information are necessary because they operate on trust-based models or specialized mechanisms required to respond to specific threat profiles.
 
    Rather than resenting Tiktok or Facebook mishandling or selling your data, the real perpetrators here are centralized banks. Purchases show where you are, what you like, and more. Central banks may share your personal and sensitive data with their affiliates or partners or third-party buyers.
 
    Banks not only steal money from you, they also make money from you. If you can't even trust banks to handle your personal data or money, how can you trust them?
 
    Security Question
 
    According to an Accenture survey, banks experience an average of 85 serious cyberattacks each year, a third of which are successful. Skilled hackers and engineers can crack many web portals and mobile banking applications. As a result, some people end up losing large amounts of cash from their accounts or getting scammed.
 
    These systems are also prone to fraud, especially the misappropriation of funds. As a result, hard-earned money was lost. Now with cryptocurrencies, such a threat is less likely because of its decentralized nature without a central source of power.
 
    Instead of relying on a central power source, encryption relies on a distributed network of computers around the world. Cryptocurrencies are more secure and tamper-proof because they use anonymous ID numbers in transactions.
 
    Whether centralized or decentralized, there is always some potential fraud or security risk. However, when it comes to dealing with people's finances, privacy and data, people tend to choose machines over humans.
 
    With the power of cryptocurrencies, people don’t have to struggle with the flaws of the modern financial system. While cryptocurrencies as a whole are still in their early stages, millions of people are already benefiting from the advantages of cryptocurrencies and blockchain. People deserve better.

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