Blockchain + Cryptocurrency, can it really disrupt traditional finance, or is it just a "New Clothes of the Emperor"?? 🔥🔥
Blockchain is an open, traceable, and unchangeable "shared ledger", and cryptocurrency (like Bitcoin) is the "digital money" that circulates on the ledger, requiring no bank management. Blockchain eliminates intermediaries, allowing direct connection between parties in a transaction, saving time and transaction fees; cryptocurrencies are not controlled by institutions and can be used wherever there is internet, breaking the barriers of traditional finance.
In 2024, the total market value of cryptocurrencies is expected to reach $3.8 trillion (an increase of 110%), with the blockchain market valued at $18.3 billion, projected to grow at an annual rate of 53.6% over the next decade, showing strong growth momentum. The trading volume of stablecoins in 2024 is nearly $37 trillion, and cross-border transfers arrive in minutes, much more efficient than traditional methods.
-- Here’s where they "clog up" traditional finance! 👇
1. Cross-border transfers: Traditional methods take days and have high fees; cryptocurrencies arrive in minutes, already taking business from banks in Africa and Southeast Asia;
2. Lending: DeFi platforms use cryptocurrencies as collateral for quick loans, with DeFi lending scale expected to grow by 113% in 2024, challenging bank lending;
3. Information security: Bank data stored in a single database is prone to leaks, while blockchain data is stored in a decentralized manner, making it more secure.
-- At the same time, they have their own "troubles"! 💥
Slow speed: Bitcoin processes only 7 transactions per second, Ethereum a few dozen, far less than the thousands per second of Alipay and WeChat, and it gets congested during peak times.
High energy consumption: Bitcoin mining consumes more electricity per year than some small and medium-sized countries, which is not environmentally friendly.
High price volatility: In 2024, Bitcoin is expected to break $100,000, then sharply decline, resembling a high-risk speculative product.
Regulatory chaos: Anonymity can easily be used for money laundering, with varying regulations across countries, leading to high risks.
【Finally, I want to say: Traditional finance cannot just "sit and wait"】
Banks use blockchain to optimize clearing, reducing transaction time by 30% and costs by 20%; some banks help cryptocurrency companies with funds management, and investment institutions allocate small amounts to cryptocurrencies but control risks strictly.
Blockchain and cryptocurrencies have advantages, but it is difficult to replace traditional finance; in the future, they are more likely to integrate: traditional finance can upgrade services using blockchain, and cryptocurrencies can be used for cross-border small payments under regulation, jointly creating a diverse financial environment.
