Why banks fear crypto so much - Episode 332 - by cryptohunt.it

Why banks fear crypto so much

Ever wondered why banks never really talk about crypto publicly? Because they are afraid of it.

Welcome to the Cryptohunt Jam, where we spend a minute a day explaining the intersection of exciting new technologies and your world. As always: In plain English.

You know that we are big fans of the ideas behind blockchains and cryptocurrencies, and see huge technological potential. But we've also been vocal about using common sense to see through all the talk - because for the most part, crypto is still a solution in search of a problem.

Except for one area, where it's becoming a clear thread to the existing system: And that is banking.

Gatekeepers and intermediaries have existed as long as humans have traded: Want to cross this river? Pay the guy who owns the property in front of the shallow part. Buy fruit? Pay the merchant who has an exclusive deal with the farmer.

Banks are no different. They funnel money from one place to another, and take a cut. A huge cut, in fact, if you look at Wall Street salaries.

What makes banks special though, is that moving money is one of the easiest things on the planet. It just involves simple calculations and contracts. And nothing is better at executing those than computers.

Which is to say: Theoretically, we don't actually need most of the bankers, and since computers don't want to drive Ferraris or drink champagne, they are also much cheaper to keep happy.

Up until now, banks also controlled the money itself, which is why they are so powerful still. But that changed with crypto. It literally lets us program the bankers’ jobs into computer code, and execute it without having to pay them their salaries. This is called a smart contract, and is already happening at scale. Of course, there are painful downsides - like a lack of regulation and oversight - but those could be solved if we all worked together.

And that's why banks fear crypto more than anything. Because it's the more efficient way to get an already simple job done. And while they are doing everything to hold on to their power, eventually crypto will eliminate large amounts of their business.

It will take a while: But you have a front row seat to see it all happen in real time.

And before we let you go into the weekend - we ask for one little favor. If you like this podcast please tell your friends about it and leave a review. This will help us a lot.

This podcast is produced by Cryptohunt.it, the easiest place to learn all about Web3. Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, design is done by Carmen Rincon, and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.