It may be interesting for many to find out how money actually moves between people's accounts, comparing fiat (money that has value due to a government decree) and crypt, especially for those who are not familiar with this topic.
Let's compare two standard procedures for transferring money between people from one account to another:
- traditional bank transfer
- transfer using cryptocurrency
Bank transfer:
They inserted the card into the ATM, indicated the amount, the recipient's account number and pressed the "Confirm" button.
Next, processing (software calculation by the payment processing center), according to which the balances on our card account and the recipient's account will be immediately adjusted taking into account the transaction (our amount will decrease, and the recipient's will increase by this amount). But in fact, the money will be transferred at least the next day.; Initially, through the correspondent accounts of our bank and the recipient's bank (if it is serviced by another bank), and only then distributed to the recipient's personal target card account.
The whole scheme is transparent to the bank and the state - who, how much and to whom.
Cryptocurrency Transaction:
Logged into your personal cold wallet. You specified the amount and the number of the recipient's wallet and clicked the "Send" button. The blockchain network has confirmed the operation, and the money has already been credited to the recipient's account within 1-3 minutes.
If we want to transfer our cryptocurrency from the exchange to any wallet, then we must understand that we do not own the wallet of the coin listed on the exchange. The wallet belongs to the exchange itself, and as requests for transfer and orders for the purchase and sale of cryptocurrency are placed, it only performs operations on our request. Therefore, the procedure may take a little longer than direct crypto transfers.
This, by the way, also confirms the importance of owning a cold crypto wallet if we want to protect ourselves from various possible force majeure on the part of the exchange.
That there may be a commission for bank transfers and crypto transfers. In case of crypto transfers, it depends on the cryptocurrency itself and the workload of the network itself at the current time. That is, if many people send or receive cryptocurrency at the same time, the commission may increase, and vice versa.
As a result, what we have: regarding the speed, independence and security, there is no alternative to crypto transfers today, which the fiat currency cannot boast of, although this directly relates to the main function of money.
Based on this, it is worth thinking about the relevance of the banking sector in the near future.
Taking into account the fact that a number of crypto-currency platforms and services are already successfully performing lending functions in the crypt, and savings are provided by staking networks where the interest rate can reach up to 7% per annum, the deep meaning of the banking sector hides before our eyes.
