Question

Will cryptocurrencies/bitcoins affect the commercial bank? If so, in what ways?

Answer 1

Cryptocurrency uses a peer to peer technology to operate. It doesn't require any central agency to regulate them. It is a self controlled system.

Cryptocurrency are encrypted digital currency and they are highly decentralised and this provides them with an edge over traditional banking system which offers most the currency which are controlled and regulated by a third party and they have a lot of government intervention.

Cryptocurrency are affecting banks as it has the potential of seizure of the market share of banks as digital currency are created and transacted in open source environment where they are controlled by code and rely upon peer to peer networks. No third party can affect the Cryptocurrency.

With the popularity of cryptocurrencies, A major shift is starting to happen as there are bitcoin wallets which helps in transacting outside the gambit of traditional banking system.

These can eat the market shares as there is no scope of fraud as it is highly transparent and banks are sometimes prone to frauds and misstatements so Due to the modern and sophisticated nature of cryptocurrencies, they have the potential of being the next big thing and completely taking over traditional banking system.