Benjamin Netanyahu Says Bitcoin Rises As Banks Die
On December 12, Prime Minister Benjamin Netanyahu openly commented on the future of the bank, seen through a video on youtube. He believes blockchain technology will replace traditional banks because of the growth of bitcoin this year. The head of the Israeli state also spoke on the roles of banks explaining that their primary reason for existence was to ensure transactions between two people are secure and valid. He also states that the banks control how money is spent and benefit from having that control, at the cost of the transacting parties. Blockchain technology allows users to communicate directly and secures and validates transactions more quickly, in comparison to the traditional banking infrastructure currently.
Bitcoin, the popular cryptocurrency, is facing increased scrutiny from government regulators in China, which are reportedly gearing up to close Chinese bitcoin exchanges. This decision resulted in a decline in the price of the cryptocurrency late last week. This is the latest in a series of steps by regulators in China to clamp down on the surging cryptocurrency market.
To be honest I think that bitcoin can actually replace banks, if it ever manages to evolve as a currency. Meaning that it would get mass adoption, low volatility and low fees. Banks only need to ensure that cash transactions are secure and valid, and that no one is cheating. Bitcoin achieves that, in a much trustable way, so it has potencial to replace banks. Not saying it will happen, because even if it did, we would still be miles away from that point, since people are still wondering if BTC is a bubble or not. But in years from now, money will probably be used inside a blockchain or something similar.
A good number of experts have pointed out that there is a possibility of radical changes in the monetary system as a result of cryptocurrencies. Others have maintained that bitcoin does not meet the criteria for money; therefore, it lacks the capacity to replace real money. Both arguments hold weight and it is wise to weigh both possibilities in order to arrive at a comprehensive conclusion. This can only be done by analyzing both the current monetary system and the cryptocurrency system This can tell the impact bitcoin will have on the monetary system and whether it can replace real money.
To explain this further, Modern Banks practice what is called Fractional Reserve Banking. For example, in the early 1900’s when the US Dollar was still backed by Gold and silver, Some private banks began lending out more money than was accounted for in their gold and silver reserves. Once people got wind of this, there was a massive run on the private banks to trade in money for gold and silver. Banks not only went bankrupt, but not everyone got their gold/silver because the Banks were lending more than what was available in reserve.