JPMorgan Chase, a large multinational bank and financial services firm has acknowledged for the first time in their annual report that cryptocurrencies pose a threat to their business model. The largest cryptocurrency — Bitcoin, offers the ability to store and transfer funds around the world without the use of any banks or transfer services.
During Bitcoin’s 9-year (and counting) lifespan, it has led to the creation of approximately 1,500 cryptocurrencies, many of which don’t require any financial institutions and can’t be acquired (bought out/taken over) by any company. Of the top 5 cryptocurrencies (by market capitalization), none of them (with the exception of Ripple’s XRP) are owned or operated by any financial institution or organization. At most, they have foundations that lead the development of software updates.
The conventional financial system has always entailed involving a (often greedy) middleman to facilitate electronic transfers, as fiat currency is physical. You simply can’t send a dollar bill over the air, you could get robbed of your cash during a flight to another country, or you may be limited to carrying small amounts of money overseas.
With Bitcoin, Litecoin, and similar decentralized cryptocurrencies, you can just use the same wallet in any country. No transfers needed for those who are travelling or moving. Accessibility is the same everywhere. JPMorgan Chase and other banks will also have a hard time matching the low fees offered by cryptocurrencies like Litecoin and Stellar Lumens (XLM).
Last year JPMorgan Chase’s CEO — Jamie Dimon said that Bitcoin is a fraud, and made a series of disparaging statements about it. He has now stated that he regrets calling it a fraud, and that ‘the blockchain is real’, according to CNBC. JP Morgan is now developing a blockchain-based system that may reduce transfer times from weeks to hours.
If Bitcoin was to fail entirely, it still would have had the success of forcing banks to improve their transfer services, and the even greater success of motivating the public to learn how their respective countries’ financial systems work. The modern economy is global, and therefore needs a globally accessible currency which is resistant to interference.