What purpose do bankers serve?
They like to make us think they are so important but when you really analyze it, they do nothing more than bookkeeping. Once we understand this, we can start to wrap our minds around how the system really works.
In the age where we are on a quest to decentralize everything, knowing what each entity's role is helpful.
The fact that most people lack financial and monetary knowledge means the bankers can carry on the charade. That said, it is now time to end it.
We discuss the idea of mass adoption of cryptocurrency. Many feel threatened by it, like it is something new. The reality is that we have been used ledger-based money for decades. Banks are not moving money around like we are led to believe. Instead, they simply put numbers in different places on a ledger.
This is called balance sheet banking.
For decades the banking system created their own form of money. This became what is known as the Eurodollar system. It was developed by bankers outside the scope of the governments and central banks. Ultimately, this served to take over the global economy.
Here is where we saw the bankers aim to match the demand for money with the supply. It is something the major central banks cannot do. They like to claim that they can affect the money supply but the truth is they do not.
Notice a trend of the misrepresentation by the entire banking industry?
If we have trillions of dollars moving around the world, yet it exists only in virtual form, what role do bankers really serve?
Ultimately, they just keep track of it all, aka providing a bookkeeping service.
What is blockchain? It is distributed ledger technology.
What is cryptocurrency? Distributed ledger-based money.
Do you notice something here? If blockchain is ledger technology and cryptocurrency ledger-based money, isn't it evident that a blockchain can serve as the replacement for the bookkeeping tasks performed by banks?
After all, how often do we actually put cash in a bank for them to keep? Even checks, which were a dominant payment mechanism in the early 1900s, are just the moving around of numbers.
In short, the banks are cooked. They are the poster children for intermediaries that serve little purpose but extract fees. Blockchain can perform the same services for much less.
Some feel that stating the banks are done is a bit over the top. If that is the case, look at what they actually do. FinTech already proved that much of the services banks provide could be replaced with technology. Look at the mortgage industry. In the US, the largest mortgage originators are basically applications.
This is only going to keep expanding.
Certainly there are some things that are beyond the money creation process. For this, we have the introduction of Decentralized Finance (DeFi).
If the bankers could gain control, then it only makes sense to think that DeFi will likely take over the world. The ability to innovate in this area is without limit. Over the next decade, we are going to see applications built that make a great deal of what the bankers do obsolete.
Ultimately, these entities could end up becoming nothing more than front ends, linked on the back end to DeFi applications that are truly running the financial system.
We are watching the end of traditional banking.
Of course, the new system is one that is inclusive and will really provide the resources for massive economic growth over the next few decades. Since the Great Financial Crisis, we saw the lack of USD and collateral in the international banking system caused major problems.
Cryptocurrency solves this.
Take a look at this list:
All of these are industries that were disrupted by the Internet. When that happens, whatever is there tends to get destroyed. While some will adapt, most do not. This is why we saw bankruptcies in each of those industries.
As technology gets more powerful, and more people use it, the scope of what is destroyed only grows. Early on, travel agencies were targeted by online application like Expedia™. While that does not rival a bank, we are a lot further along as compared to 20 years ago.
Blockchain and cryptocurrency are causing havoc within the entire financial sector. Banking is at the top of the list. Software already replaced much of the bookkeeping industry. Now it is going after the ones who dress up as something else.
Questioning what is going to happen with this technology shows a complete lack of understanding how the Internet works. There are some who believe the banks are not vulnerable. The idea is they are "too big to be taken down".
The reality is that FinTech already did a number on them and we are watching the second act unfolding now.
What is different this time, as compared to the Eurodollar system, instead of being narrowly distributed, we see cryptocurrency goes a lot wider.
Remember what file sharing did to the record companies. Essentially, a single application, Napster, destroyed some of the most powerful companies in that realm. While that entity ended up going under, due to being centralized, the idea of file sharing never went away.
Do not underestimate the technology we are dealing with. Over time, it will only grow more powerful as infrastructure is put into place. This will lead to further development, targeting even more areas of the banking system.
In the end, these well dressed bookkeepers will find they have no defense.
How do you see the future of banking? Let us know in the comment section below.
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