2 Reasons Why Bitcoin Would Not Disrupt Financial Institutions

Hello Monkeys!

Stumbled upon a very interesting article regarding why Bitcoin would not lead to the disintermediation and death of the banks. Here is the main takeaways of the article:

A common idea about the blockchain, the technology that powers Bitcoin and other cryptocurrencies, is that it can “create trust”, or allow two parties to make a transaction “without relying on trust”.

1

The blockchain does not create or eliminate trust. It merely converts trust from one form to another. While we previously had to trust financial institutions to verify transactions, with the blockchain we have to trust the technology itself.

2

It is also not clear that a blockchain-powered currency (such as Bitcoin) can go mainstream without the backing of a trusted authority. In fact, there are hardly any examples of money (including gold) that have ever worked without the backing of a central authority or a sovereign.

If history is any guide, privately created money such as Bitcoin or any other blockchain-based currency is unlikely to become globally accepted without a trusted central authority. This means that an “open” blockchain will not succeed. Although a “closed” blockchain, with the backing of a central authority, might work, it would be very different to the core feature of Bitcoin and the blockchain - decentralization

On top of these, I personally think that the adoption of a "closed" blockchain is exactly what the financial institutions need to be cost effective as they become technology companies in order to survive in today's increasingly disruptive world, which seems to be the practical outcome of the Crypto revolution.

Do you monkeys think financial institutions fear a new financial instrument, with all its accompanying derivatives, innovation, etc.? Is this not exactly what they want as institutions; new "toys" to play with, so to speak?

Or do you think that the "open" blockchain will gain the people's trust and succeed? That it is time for disintermediation, considering the banks' role in the 2008 Financial Crisis?

Let's discuss.