Blockchains have been regarded as a disruptive force for the financial sector, especially when it comes to the functions of banking and payments. However, decentralized blockchains and banks are not the same; they are hugely different from one another.
Kavan Choksi UAE on the basic differences between banks and blockchains
Kavan Choksi UAE is a credible and successful entrepreneur with expertise in the areas of business, technology, and photography. According to understand how a bank is different from a blockchain, you need to compare the system of banking to the implementation of blockchain by Bitcoin-
Banks are brick, and mortar structures, open from 9 am to 5 pm only on weekends. There are some banks open on the weekends but only for limited hours. All banks are shut on banking holidays.
Bitcoin has no opening and closing hours. It is open 24/7, 365 days a year.
Due to the laws governing KYC requirements, the government can track people’s bank accounts easily and seize their assets for a number of reasons.
If Bitcoin is deployed anonymously, governments will have a difficult time tracking it down before seizure.
When it comes to payments by card, the fee differs as per the nature of the card. It is not paid directly by the user. The fee is paid to the processors of the payments of stores and generally charged as per the transaction. The effect of the fee often makes the price of the goods or the service increase.
The fees for checks often are priced between $1 and $30 depending upon the bank you use. ACH transfers cost $3 when it is sent to external accounts. For wire transfers, outgoing wire transfers for domestic transactions might cost you $25, and for international wire transfers, the price can go up to $45.
Bitcoin has transaction fees that are variable by users and miners. This fee ranges between zero to $50; however, users can determine how much of these fees they want to pay. This gives birth to an open marketplace where the user sets the fees so low that their transactions fail to get processed.
Speed of transaction
For card payments, the speed of the transaction is 24 to 48 hours and 24-72 hours for clearing. For wire transfers, the transaction speed is within 24 hours, with the exception of international transfers. Transfers between banks are not processed on bank holidays or weekends.
Bitcoin transactions take at the most 15 minutes and over an hour, at the most, in the event of network congestion.
Ease of transfers
The minimum requirements for digital transfers are a bank account, an ID issued by the government, or a mobile phone.
In the case of Bitcoin transfers, a mobile phone and an internet connection are the minimum requirements for the transfer.
According to Kavan Choksi UAE, bank products and bank accounts need KYC or Know Your Customer procedures. This is a legal requirement for banks to keep a customer’s identification before they open a bank account. Anything or anyone who participates in the network in Bitcoin needs no identification. In theory, even an entity with artificial intelligence can participate.