Except for bankers, everyone views banks as essential evils. Simply put, these institutions are the finest we have for running entire economies and managing financial resources. But that is about to change, as we’re about to launch a brand-new monetary system that is more reliable, equitable, and most importantly, decentralized.

We’re obviously referring to cryptocurrencies and blockchain, which are already changing the way we think about the world and providing an alternative to banks.

Let’s examine the main problems that banks are currently facing and determine what can ultimately bring them to ruin.

Main Issues with Banks Nowadays

First off, banks’ online services can occasionally be unreliable. They frequently have issues with their apps, which prevent you from using online banking and force you to go to the closest ATM to withdraw money. More crucially, since they aren’t available online, complicated banking operations may call for a visit to your bank.

In addition, banks are pricey. Simply because banks serve as a middleman and provide infrastructure, their fees are significantly greater than those of decentralized financial firms. When it comes to cross-border payments, they are very expensive.

There is a lot of bureaucracy involved with banks, which can cause a delay. The restrictions are frequently quite disadvantageous, and some transactions take a lifetime to complete.

Banks hold a lot of data on us, including in-depth knowledge of our spending patterns, which can occasionally lead to human bias and negatively impact individual accounts. For instance, banking systems frequently freeze hundreds of people’s accounts without any justification.

Finally, banks don’t have a good reputation for security. You could lose your money in an instant, so you definitely don’t want to fall victim to a physical or online bank robbery. Of course, if your money is taken without a pistol being pointed at you, it’s less tense.

Code Is the Answer

Instantaneous communication was made possible by the development of the internet, and as a result, people’s needs for faster and more secure money transactions grew. Even so, the prevailing financial system did not allow banks to adequately serve their customers.

Over time, it became obvious that updating the financial system and using code is the best solution. Nevertheless, it wasn’t practical until the launch of Bitcoin in 2008.

Blockchain gave us the ability to send and receive money without the need for a middleman, thereby eliminating the need for banks. This was just the beginning, though, as many banking services required banks to be present. The good news is that the DeFi industry is currently thriving, and we are developing creative decentralized solutions to replace established banking infrastructure.

Blueshift is a fantastic illustration of a DeFi system. It functions as both a decentralized exchange (DEX) and an asset management protocol that controls cryptocurrency assets through liquidity portfolios. Through the Blueshift protocol, Automated Market Makers (AMMs) calculate exchange prices and manage liquidity flows. Blueshift is a great resource for learning about DeFi in general in addition to being a DEX. The platform was made by devoted experts with years of DeFi experience.

Decentralized technology brought the idea of transparency in addition to giving banking a fairer and more secure infrastructure, as we can examine the code governing the protocol and make sure it is not rigged in any way. Contrary to banks, which want to keep their core protocols secret from the public, this might increase user trust.

Final Thoughts

Will banks eventually become extinct? Although it’s difficult to anticipate, their significance, sway, and overall power are expected to decline in the near future. Banks must acknowledge that the global financial system is changing and moving toward decentralized finance if they want to survive.

Additionally, banks need to adopt this perspective and reimagine their services by putting an emphasis on decentralized finance. Even in that case, one of the possibilities is that people will prefer DeFi so much that they will disregard anything remotely linked to conventional centralized systems entirely.