The rise of bitcoin has seen banks scrambling to implement blockchain technology into their current system. The underlining tech may truly be revolutionary, but thats not where the banking ends. I have posted a blog before referring to where the banks got it wrong. Banks and bitcoin is at war, so as it seems. The idea presented by satoshi nakamoto in my personal opinion was more on decentralization which was backed by a truly remarkable software in the form of bitcoin/blockchain that we see today.
Banking & Bitcoin:
A few things that have had confused me earlier or maybe I misinterpreted, was that bitcoin is a replacement of banks. The thing I have now come to realize is that bitcoin is really not the replacement of banking. But infact is a replacement for the current fiat currency as we have come to know it. Fiat as we know is governed and controlled by countries its accepted in. That is also why it holds value and is constantly exchanged back and forth with bitcoin. Why I say this is because I believe banking has so many more aspects to it then we as tech enthusiasts forget to see or realize.
Banks offer banking. Yes they are controlled and centralized but arent all the services that are being built on bitcoin the same? We see banks as a place to hold our money, isnt that what bitcoin wallet services such as bitgo or coinbase or mobile wallets doing the same? with the blockchain becoming bigger and bigger its harder to run the full bitcoin qt clients.
Then we look at services such as btcjam and bitfinex which offering loans and buying btc on leverage opportunities. Does that not fall into the space of a loan by a bank? I think they are very similar in nature. Banks now offer you running finance, or loans on interest where as these companies are doing the same.
Remittance is a hot topic in bitcoin. Bitcoin remittance has been talked about, and service have been built upon it. There are just too many to list here with each one operating in their requisite country of operation. While all try to take bitcoin out of the forefront they are built on buying and selling btc for consumers. This model has seen some success but not on a worldwide grand scale as of yet. If bitcoin remittance is broken down into its basics it basically offering what banks do with wire transfers to your loved ones in any country.
One more aspect that I would like to talk about here is escrow service, I guess you can compare that to Letter of credit as the banks call it. Basically its a guarantee that once a service is tendered the liability of payment lies in the hand of a bank (third party). If we consider a bank a third party then there are many escrow agents working as these third parties to make this happen.
I believe bitcoin is a replacement for currency and not banking. Banks need to understand this and so do the crypto followers. The services that were being offered by banks once are now being offered by individuals who are mimicking the services of banking, one sector at a time. While its not a bad thing, I believe that banking is being revolutionized with the coming of bitcoin and it will be in the best interests of banks to realize that now then later.