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Why are cryptocurrencies safer than banks?

With the emergence of Bitcoin in 2009 and the subsequent take-off of many other cryptocurrencies (most of them decentralized), important challenges have arisen for banks: they work under a totally centralized scheme, which prevents them from achieving the efficiency and convenience of certain functions of this new type of assets. Many people wonder "Why are Cryptocurrencies Safer than banks?" so, we will analyze how these digital assets can protect our finances.

If we start from the centralized nature of banks and contrast it with the P2P or Peer-to-Peer infrastructure (direct relationships between pairs) of bitcoin and most cryptocurrencies, the storage of transaction information is the first great contrast point of the two platforms.

Why are cryptocurrencies safer than banks?


While banks store all the transactions of their users in a large ledger that remains on the central servers of each banking institution, the ledger with cryptocurrency transactions is distributed, that is, it is replicated in each node of the network.

The user of a cryptocurrency wallet not only has his balance and transaction history in view, he can also examine, if he wishes, the history of the transactions of other wallets.

Certainly the users of a bank can have access to the movements of their accounts in that institution. However, account statements are sometimes limited to the last three months. On the other hand, there are transactions, for example interbank transactions, which are only reflected the next business day.

The most beneficial aspect of cryptocurrencies compared to banks, is perhaps the speed of payments and transfers, which is also related to the advantages of decentralization.

A cryptocurrency payment is reduced to a transfer of digital codes between one wallet and another, which is done in minutes, regardless of the physical locations of the sender and receiver. The security of the transfer is guaranteed by the cryptographic procedures that are part of the design and structure of the network.

For banks, which must guarantee the security of these transfers from their central servers, the speed of the service depends on the type of recipient client. If the recipient is also a bank customer, the transfer is immediate. If you are a customer of another bank, the transaction takes one business day, which can mean three days if it is done on a Friday afternoon.

In the world of cryptocurrencies, the transaction lasts the same, regardless of the day of the week, or if it is business time, but more importantly: for transfers and payments with cryptocurrencies there are no geographical borders. The same takes a payment to a pizza vendor than a multimillion-dollar transfer to anywhere on the planet (that has Internet access, of course).

Cryptocurrencies: A weapon against inflation and bad governments

The fact that cryptocurrencies work in a decentralized way protects their users from bad government management that ends up destroying the economy of certain countries, as we have seen in the case of Venezuela and Argentina.

If a citizen keeps his savings in cryptocurrencies that have a long-term upward projection (such as Bitcoin or PAX Gold), he will not only keep his capital in safeguard, but he will obtain benefits each time the price of said asset increases. In the case of Bitcoin, it is a cryptocurrency designed with a deflationary model (its value will increase over time) and although other cryptocurrencies also have a bullish projection, sometimes it is safer to invest in assets that we already know as gold, for which it was created PAX Gold, a coin anchored to gold.

When people depend only on fiat currency and keep their savings in banks, the economic decline of the country where they live would break their capital in half or even more. Cryptocurrencies prevent this from happening.

“Why are cryptocurrencies safer than banks?” is a question that can be answered by only looking at economic crisis statistics, regardless of where you’re from.


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