Blockchain vs. Banks

person holding white and red card

The desire of users to get rid of the shortcomings inherent in traditional payment systems and services based on centralized algorithms has led to the emergence of new technology with distributed data storage. Blockchain proved to be suitable not only for replacing payment systems but also in a number of other areas. This is how cryptocurrencies appeared, and as a result of blockchain technology development and the implementation of smart contracts into it, other digital assets appeared, such as NFT and DeFi.

In many ways, the heyday of the new technology was provoked by the financial crisis of 2007, when many central banks, due to management problems, were forced to take extreme measures – to launch a printing press, which led to an increase in inflation on a global scale.

The solution proposed by Satoshi Nakamoto solved the problem of centralization and many others, and the principle of open source allowed to bring this technology to the masses.

The crypto industry turned out to be quite viable, despite the huge stream of criticism that hit bitcoin and its followers. Moreover, in many aspects, the use of cryptocurrencies turned out to be much more effective than banking systems. But due to volatility, digital assets have not been able to significantly push aside their fiat competitors in terms of online payments. And as an investment tool, they are indeed a very attractive object.

Cryptocurrency vs. Banking Systems

The traditional financial system, which has been formed over the centuries, is based on banks. They have been used for a long time for money transfers, lending to people, and as a means of storing fiat money. Internet banking has significantly expanded the scope of its use, but banking systems are characterized by shortcomings that are very difficult to eliminate. This includes a high level of centralization, significant interest rates, and low speed of many types of transactions, which is often a critical factor.

The cryptocurrency was initially positioned as a decentralized alternative to banks. Thanks to the use of a special blockchain structure and powerful cryptographic algorithms, cryptocurrency is considered to be secure. It is completely transparent and allows you to track all transactions that cannot be changed retroactively. Finally, it provides complete anonymity. The combination of these qualities makes cryptocurrencies very tempting in terms of replacing traditional finance.

What are the Main Drawbacks Of Banking Systems

Let’s take a closer look at why the banking sector does not satisfy everyone.


Although most banks work online, 24/7 round-the-clock support is not always implemented. And those issues that require a visit to the department cannot be resolved at all outside of business hours. Meanwhile, businesses at all levels work seven days a week, and any delays in making transactions, especially large ones, are extremely undesirable.


Banks often use methods of promoting their services aimed at a certain category of users. On the one hand, this is good because, under these programs, you can get preferential loans, low-interest rates, or deferred payments. But in general, such preferences are discriminatory in nature since they do not cover all customers.

Security issues

Mobile banking is quite a young industry, which means that it has childhood illnesses. Cybercriminals use them, looking for vulnerabilities in the relevant applications and software. As a result, both banks and their customers, who risk losing their savings, suffer.

Additional fees, low transaction processing speed

Most banks are charging additional fees from customers, which, as a rule, are not advertised or advertised. International transfers are especially guilty of this, where the commission percentage can be very high.

Transactions involving a sufficiently large amount are often processed slowly – banks are insured by performing a number of additional checks to be sure of the purity of the transaction.

The human factor

Bank employees make mistakes. If you operate with large data sets for a long period of time, such errors are even inevitable. But that’s not all. They may, for one reason or another, be biased against some customers, deliberately delaying the processing of transactions or even refusing service for far-fetched reasons.

All the described disadvantages of banking systems have an objective nature; it is difficult to get rid of them.

But with the advent of blockchain technology and cryptocurrency, the situation began to change.

How Can Cryptocurrencies Offer More Than Banking Systems?

The inability to get rid of certain shortcomings in the functioning of the classical banking system does not mean that these problems cannot be solved in principle. And it was the blockchain technology that was initially focused on their solution. Let’s consider exactly how cryptocurrency can be more efficient.

Decentralized nature

Banks, central or private, are always controlled by someone, and this control extends to customers. Blockchain technology puts decentralization at the forefront. The cryptocurrency infrastructure is controlled by the software and the distributed registry user community. At the same time, all transactions are made almost automatically, without the participation of third parties; they are anonymous and secure. And at the same time, anyone can track such transactions.


It is believed that it is impossible to hack blockchain – the use of chain hashing and a consensus mechanism ensures that fraudulent transactions will be blocked. The structure of the blockchain is such that completed transactions are stored in it forever, and it is simply impossible to change them.

Yes, there is a risk of stealing passwords from users’ crypto wallets, but it has the same nature as in cases with passwords to Internet banking accounts.

Financial accessibility

In most cases, the entry threshold for cryptocurrencies is low or even completely absent, especially for young tokens. This is a good incentive to attract new users to the industry. Well-known calculators of cryptocurrencies, such as Coinmarketcap, allow you to assess their prospects by studying price dynamics charts and their market capitalization. Another plus is that the blockchain works around the clock, unlike banks.

Minimizing the human factor

Blockchain technology works automatically in accordance with the transaction processing algorithms embedded in it. It is enough to specify the recipient of the payment and the amount, everything else will be processed automatically without involving a third party.

Fast transaction processing

Algorithmically, the blockchain does not close transactions instantly. Each cryptocurrency has its own boundary time barrier necessary for payment processing. As a rule, it is relatively small, so in general, transactions are faster than in banks.


The emergence of smart contracts has significantly expanded the scope of cryptocurrencies, allowing the development of applications focused on a specific task. Banks cannot boast of such versatility.

A good example of a blockchain platform with a wide scope of applications is the Decimalchain platform, which uses the token Decimal. It is focused on the use of smart contracts in many industries, often unrelated to traditional finance. For example, Decimalchain has developed an application that allows users without special knowledge in this area to create their own cryptocurrencies based on the token Decimal. The Crypto Decimal calculator also is very beneficial for traders helping them to account for their profit. This feature is implemented on the basis of a smart contract, the terms of which can be set by users. Also, all crypto Decimal places are regularly monitored by skilled industry experts.


As you can see, cryptocurrency has many advantages, and it is already trying to curb its volatility with the help of stablecoins, with their value tied to a tangible asset. In short, blockchain technology is very promising and rapidly developing. But will it prevail in the near future?

Time will tell.