Banking vs Crypto

 


Banking vs Crypto how does it work?

1- BANK 

When someone makes a deposit in their bank account, that money is no longer the depositor’s property, not directly. The bank now owns it, and in return, you receive a bank account where you can withdraw your money. In theory, the customer should have access to their deposit amount on demand but that is not true. The bank doesn't hold on to the full amount, only a fraction normally from 3% to 10% and the rest is loaned or used for operations.

2- Bitcoin

Contrary to the system, we have Bitcoin, which is a decentralized digital currency that introduces a very different economic framework. A distributed network of nodes runs Bitcoin and its data is protected by cryptographic proofs and constantly recorded on a public ledger called the blockchain. There is no need for a bank or any kind of intermediary with Bitcoin and no such thing as fractional reserve. Also, the issuance of Bitcoin is finite, it is simply not possible to generate coins from thin air like traditional banking. You have a fixed amount and it cannot be modified ever.

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