Regulation or bureaucratic Tartuffery?

Bitcoin changed the financial world in 2009 when it became the first cryptocurrency to allow for cheap and peer-to-peer transactions without middle-men and anywhere in the world! This could also be done at any time of the day and any day of the week. Unlike traditional banks, there are set hours and no doors to close.

With the introduction of Bitcoin, came the Bitcoin Blockchain. Blockchain Technology has developers working intensely, barely scratching the surface of the application list for Blockchain. Blockchain largely remains associated with the Bitcoin ecosystem even though it holds the promise of change for the better in other numerous areas yet discovered. The value of Blockchain technology has not been defined.

Let’s look at Cryptocurrencies and how they have disrupted the traditional banking system.

Traditional Money vs. CryptoCurrency

Starting with the main difference between traditional fiat money (dollars, pounds, euro, etc.) and Cryptocurrency (Bitcoin, Etherum, Litecoin, etc.) The main and most important difference is that Cryptocurrencies are decentralized and out of the central bank or government’s control. Resulting in a payment system that is immune to governmental interference.

Essentially, there are no other major differences. Both fiat AND cryptocurrency store value and can be used to purchase goods and services. Both are used to store and transfer value and are driven by supply, demand, work, scarcity, and other economic factors.

Comparing Fiat Money to Cryptocurrency:

crypto vs banking FIAT Money vs Cryptocurrency definitions
chart courtesy of e-zigurat.com

Advantages of Decentralized Financial System

Cryptocurrencies have the ability to operate without a central point of failure. This means that a potential hacker has no one” area where they could launch an attack. This makes blockchains very difficult and costly to interfere with since nodes (computers) from all over the world are part of and support the whole system.

Financial freedom is finally attainable for businesses and especially for regions where humanity is largely “un-bankable.” A truly all-encompassing payment system for everyone.

It should also be noted that Cryptocurrencies raise the financial awareness of consumers that they must retain their private keys in a safe place because no one will refund any transaction or recover a user’s account if those keys are lost. Private Keys give the owner full control over his assets.

Regulators: Are they stepping in to control Cryptos?

As previously noted, Cryptocurrencies operate outside of the Banking system and its regulations. The costs of sending money are much lower, there is no need for a middleman, and it is open for business any hour of the day or night. These are perhaps some of the main reasons people are flocking to Cryptos and preferring this payment system to the traditional banking system.

.“Regulators mount up!” (does anyone remember that movie line?) As if predicted, governments realize the turn to this Cryptosystem and are stepping in and exerting control where they can. Supposedly a defense against terrorist activity, the inter-governmental Financial Action Task Force’s (KYC) “Know your customer” and the European Union’s (AMLDs) “Anti-money Laundering” rules are set in place. This is to ensure that no individual user is unaccounted for.

.In other words, these regulations can be viewed as governmental surveillance which negates the censorship-resistance ideals on which Bitcoin was created, or it can be seen as an opportunity to revolutionize the payment industry by bridging the gap between tradional banking and the cryptocurrency ecosystem.

Time will surely tell the story. Will these regulations allow cryptocurrencies to become mainstream, or will they ensure traditional banks and governments retain their control status?

Will Banking and Cryptos Merge?

The future of both and how they will interact remains in question. Will they merge or simply be tolerant of each other? It is obvious that Cryptocurrencies have to adapt to new rules and regulations, however, banks will definitely have to learn to play the new game in town. Banks will have to abandon some of their traditional methods of doing business and adapt a more aqueous role. Perhaps utilizing blockchain technology will help to modernize their operations so they can relax the grip they have had on financial markets?

Fintech in Emerging Markets

Mobile phones alter consumer practice and change the way they access the internet. In developing countries where they have never attained the levels of Western country’s physical banking infrastructures, they are more open to new Fintech solutions. The countries with the highest Fintech usage are China (69%) and India (52%). In China, they are well above the average global adaption rates at (33%) and across emerging markets adaption at (46%).

One clear thing, Cryptocurrencies nor the Blockchain is going away. And as banks and governments are growing keenly aware, they need to change the traditional way of doing business or get left behind in a fog of “wish I had thought of that.”

OH, the Tarfuffery!!

About the author

Gail holds one of the most challenging role in the Compumatrix Leadership: Membership. She ensures that that members and potential members enjoy the benefits of being part of the Compumatrix community.

Comments

  1. Great…one more piece of content for my “Compumatrix textbook.” The advantages of a cryptocurrency over fiat currency certainly sound very beneficial – especially like the fact that this currency is decentralized and not controlled by any government or bank yet. It seems like the banks are wanting a piece of this action – do you think the people will continue to use cryptocurrency without the banks trying to take back their control over the people’s finances?

  2. Agreed with Janis — great info Gail — and yes this is a multi-reader — it’s like going back to school as a kid and trying to learn — I stress trying to learn math like algebra 2 or trigonometry for me, and that is no simple task — but maybe someday we will comprehend ?? hope so thank you for time n info —

    1. so much great info — and we put that info with other great articles or blog postings and soon the info we achieve thru reading and reading again more than once — becomes very solid and legitimate business knowledge — and when we put the knowledge we are gaining with the time spent it becomes very much a wise maneuver and a very intelligent business decision — thank you for great info —

  3. I love the idea of using Cryptos and all the advantages that come with it. What worries me and sometimes upsets me too is that the government always has to barge in and regulate everything, not for the people’s betterment. For example, there was a time when you purchased items online, and you didn’t have to pay taxes. But of course, it was only a matter of time before the government barged in and started requiring taxes. I have nothing against taxes when they are reasonable. But overtaxing makes me sick, especially when we learn about how our taxes are spent. So much waste!

  4. Wow. What a difference. I love the chart you have here of crypto vs. fiat side by side. The couldn’t be any more different on so many fronts. Amazing! Everything in the news these days points towards governments looking into crypto and going in that direction. Especially with all the COVID stuff. No registers are the supermarket that wants to give you back any cash or coins.

  5. What an amazing blog Gail. Thank you! I love the chart as well, so many differences, and you can use cryptocurrencies from anywhere in the world. It’s amazing how COVID kinda pushed what was already there. We are still on track and growing while some are still tripping over their own feet.

  6. What an interesting and enlightening text, Gail! I believe that the cryptocurrency is really here to stay, and for sure in the future the governments and the banking system will have to accept this new way and adapt, just as we are all doing adapting to this sad Pandemic …

  7. Difficult to predict the future..
    I think the cryptocurrencies are here to stay as well, but there are many obstacles to overcome.. I’m not sure I’ll see all of them during my lifetime.
    My biggest concern is that the banks are pretty thick headed when it comes to adaptation of new things.
    The big banks out there have shown very little interest in cryptocurrency to this date.

  8. Thanks,Gail, for an explanation so simple even I could understand and integrate this knowledge for my benefit. It will also help me to explain to my family what Compumatrix and
    and cryptocurrency are about. I feel many times that I am unable to make clear to my family exactly what we do in Compumatrix so that they can understand what I’m talking about.

  9. so much great info — and we put that info with other great articles or blog postings and soon the info we achieve thru reading and reading again more than once — becomes very solid and legitimate business knowledge — and when we put the knowledge we are gaining with the time spent it becomes very much a wise maneuver and a very intelligent business decision — thank you for great info —

  10. The advantages of cryptocurrency over fiat currency certainly sound very beneficial – especially like the fact that this currency is decentralized and not controlled by any government or bank yet. It seems like the banks are wanting a piece of this action – do you think the people will be able to continue to use cryptocurrency without the banks trying to take back their control over the people’s finances? Great…one more piece of content for my “compumatrix text book”.

  11. I think crypto and Fiat will have to live together for a long time. There are many millions worldwide who do not have a bank account or the ability to use crypto. Many for whom bartering is still a way of life, Millions have little ability to use the internet for even basic functions. Until companies like cmpumatrix can spread the word and make crypto a norm there will be parallel money systems.

  12. I think it is a pity that the word Fiat is used in this context. To me Fiat are an Italian car manufacturer whose brand is not regarded with great esteem by the motoring fraternity.
    I do think that normal money and crypto will live side by side for many years to come. I hope Compumatrix can help with worldwide awareness of BTC and make trading it a very simple matter.

  13. Your last comment about mobile phones changing the world of banking and crypto is so spot on. There are over 2.5 Billion people in the world that are “un-banked” and the mobile phone has changed the possible access of using cryptos to bank on their phone for millions of people. I am shocked when traveling to a third world country at the amount of so called poor people that all have phones.

  14. You always simplify things and bring the message home, wow, this is great and enlighten the advantages, I know my people will love this and with time they will have that peace of mind especially the unbanked lot.

  15. Thank you for the wake-up call! In the last 6 months, the world has had time to learn new ways of using Blockchain and FinTech. This is just the beginning with banking and cryptocurrency. When I started Compumatrix, my family had no heard of cryptocurrency, now Bitcoin is a house-hold name. There was a hand full of exchangers available, now I look at my apps and I have to choose which one to use.

  16. Tartuffery what a great word, it appeals to me. It covers the hypocrisy that is exhibited by the banking systems that are in place today.
    Banks claim to be our friend and will do good for us, but there rules and regulations cover the, not us. Remove a large sum of money all at once, and see if you get it. That’s my money you say, sure it is, but the banks consider it theirs as long as it is in their depository. I don’t think many of us could withdraw enough to worry them. Tartuffery is also a gained and shared knowledge to create the inner workings of our CDAP. Thank God for the blockchain and cryptocurrencies. Thank God for the decentralized system that Compumatrix follows. Decentralized is to protect and secure our digital money and transactions.

  17. The chart says it all like day and night crypto being day of course and I do think the government is trying to regulate it in some way or another but the way I see it Jesus even said to pay your taxes so I will, I just hope they don’t get to greedy and be reasonable with there percentages to start out at 30% for capital gain was a sticker shocker for me I think that could be lowered a bit. The Fed is working on there own digital currency they are calling it experimenting with making it……read between the lines on that one……

  18. – What an amazing blog Gail. Thank you I love the chart as well so many differences and you can do it from anywhere in the world. It’s amazing how COVID kinda pushed what was already there. We are still on track and growing while some are still tripping over their own feet.

  19. When you read a blog, you realize just how much we have learned along the way. I see lots of familiar faces commenting and that is wonderful! Each blog opens up our world a little bit more. and today is no different! Today I have learned a new word. Tartuffery! If I learn nothing else today, I am happy. It is amazing how we can learn if we just read.

  20. Great article and handy quick reference chart to help educate others. One of my favorite aspects of Bitcoin that I enjoy everyday is the 24hr trading. I really enjoy checking how its doing all during my day, night and weekends. Its not dependent on someone being at work or it not being a holiday. Those things don’t matter when it runs on the blockchain.

  21. To me one of the big challenges is moving BTC in a safe way and then being able to use the money generated. There are so many con men and women just waiting to defraud innocent victims. There are hackers who seem to be able to infiltrate almost any site. There are so many apparently well meaning people with their hands out in the name of charity or religion that extreme care needs to be taken all the time Tread carefully otherwise all the patience we have exhibited waiting for the Compumatrix big reveal will have been in vain.

  22. To quote this
    (( One clear thing, Cryptocurrencies nor the Blockchain is going away. And as banks and governments are growing keenly aware, they need to change the traditional way of doing business or get left behind in a fog of “wish I had thought of that.” ))
    The RBC Royal bank of Canada just gave this notice on Nov 15, 2019 The largest bank in Canada the Royal Bank of Canada (RBC) is reportedly opening a cryptocurrency exchange… That is quite the change in mind set .. Guess they see a good thing and want a big piece of the action ..

  23. this is so much good usable info in this blog and yes must read and for me must read several times and notes to take lol — but the learning curve for me by reading and studying different blog postings and combining the thoughts facts and overviews of some great people makes this a great journey of discovery — seriously thank you

  24. Thanks for this blog sophye! It clearly shows that Compumatrix is on the right track! I have read that Swedish banks are introducing blockchain. I really hope they are not trying to interfere with or regulate our transactions that take place in Compumatrix. I trust Compumatrix but not our banks unfortunately.

  25. Another great blog. You ask the question “will banks and crytos merge” and in order to do so banks will have to abandon some of their traditional methods in order to play a more aqueous role. I am sure that everyone has noticed how people that use cash are now frowned upon almost like you are a criminal. Checking out at grocery store for example, you can’t pay with cash or use your debit card and try to get cash back. Not sure if this really fits a more aqueous role you are talking about but it is the first thing that comes to mind for me.

Leave a Reply

Your email address will not be published. Required fields are marked *