The $1.7 Trillion Reason Banks Choose Blockchain or Distributed Ledger Over Bitcoin

Banks know Blockchain is a threat to the linchpin of their economics: the customer relationship, and the $1.7 trillion they made in two thousand fourteen from global payments revenue which is a massive 40% of their annual profits.

Banks know Blockchain is a threat to the linchpin of their economics: the customer relationship, and the $1.7 trillion they made in two thousand fourteen from global payments revenue which is a massive 40% of their annual profits.

Historically the banking industry has provided three main services: financing, investment and transactions. And now they seem to dismiss Bitcoin publicly and highlight the distributed ledger or Blockchain.

Do we indeed need a middleman?

The customer relationship is the glue that ties the banking institutions together and keeps this type of profit rolling in. Albeit after taxpayers taking the hit to their pocket over the recklessness of bankers’ decisions which caused the global recession in two thousand eight and the introduction of a decentralised global currency that liquidates the need for middlemen and expensive fees, does the customer indeed trust or even need banks in their current state anymore?

2014 was an extreme year for the global payments industry with even the most optimistic expectations clearly exceeded and revenues growing by dual from 4% in previous years to 9% in two thousand thirteen to 2014, taking their profit from $1.Five trillion to $1.7 trillion and global payments enlargening its share of the total bank revenue from 38% to 40%.

According to a report by McKensie, this revenue from global payments is set to proceed to rise at a relatively stable annual rate of 6% during the next four years, exceeding $Two trillion by 2020.

Will the banks rivals sustain this time around?

While banks have always faced competition, history has shown that most of their rivals uncommonly build up a solid footing. During the dot com boom of one thousand nine hundred ninety seven to 2000, less than 10% of payment startups survived, with PayPal being the most notable.

However, the majority of experts are expecting this time around to be different.

Never before have banks had competition from the largest and most valuable companies in the world such as Apple, Samsung, Google, Facebook, Microsoft, Amazon and Alibaba.

These companies have loyal and very engaged user bases, are integrated into many aspects of their customers’ lives and have massive cash reserves. Combine this with them having the benefit of revenue flows beyond payments and you have formidable competitors.

Smartphones with clever payments services

Android Pay means more Android platform users for Google; AliPay means more e-commerce sales for Alibaba; Apple Pay means more iPhones are sold, enabling them to reap value from the existing payments value chain and upend pricing models by providing payments services either free or for significantly below-market prices.

Global smartphone invasion by population is expected to exceed fifty percent by two thousand seventeen and as more users become familiar to how they can accommodate a multitude of their everyday needs, there will be a shift from the use of bank apps to third party financial service apps by a segment of users.

In the United States, 33% of millennials aged inbetween fifteen and thirty three believe that within the next five years they will not need a bank at all.

Reminisce even tho’ Apple Pay, Samsung Pay and AliPay can suggest cheaper transactions for the reasons stated above, there is still the Visa, American Express and MasterCard fees which take a chunk out of retailers’ profits.

The fattest threat of all to banks profit

This is where the fattest threat of all to banks profit in payment revenue comes in as the digital currency Bitcoin. It eliminates the need for banks, credit and debit cards fully, suggesting secure, global and instant payments with practically no cost to the payer or receiver.

Financial institutions, central banks and payment processors know that the Blockchain is the greatest technological innovation in generations and it makes their existing systems seem outdated and will eventually make them obsolete.

They know with the rising adoption of smartphones and non-bank based payment applications, and the technology behind Bitcoin simplifies for users over time, their trillions in profit of payment revenue every year is in danger of disappearing.

They can’t take control of it, they don’t even know how to regulate it, and they are fully aware that at this stage they can’t even stop it.

Bitcoin vs. Controllable Blockchain

Their only option is to overlook the word, dismiss it as tainted and attempt and hoodwink mainstream society into the trend of using a fresh buzzword like Blockchain or distributed ledger while persuading them of the benefits of their Blockchain which they can control and at the same time retain some profits from.

When you realise that this is a fight for $1.7 trillion a year in profit, which is 40% of the bank's total global revenue, you can understand why they choose to use the term Blockchain instead of Bitcoin.

In the long run I don’t think the name used will matter much as the honey badger of money is still on an unstoppable journey to mainstream adoption over eight years later with transactions and trading volume at all time highs.

The $1

The $1.7 Trillion Reason Banks Choose Blockchain or Distributed Ledger Over Bitcoin

Banks know Blockchain is a threat to the linchpin of their economics: the customer relationship, and the $1.7 trillion they made in two thousand fourteen from global payments revenue which is a massive 40% of their annual profits.

Banks know Blockchain is a threat to the linchpin of their economics: the customer relationship, and the $1.7 trillion they made in two thousand fourteen from global payments revenue which is a massive 40% of their annual profits.

Historically the banking industry has provided three main services: financing, investment and transactions. And now they seem to dismiss Bitcoin publicly and highlight the distributed ledger or Blockchain.

Do we indeed need a middleman?

The customer relationship is the glue that ties the banking institutions together and keeps this type of profit rolling in. Albeit after taxpayers taking the hit to their pocket over the recklessness of bankers’ decisions which caused the global recession in two thousand eight and the introduction of a decentralised global currency that liquidates the need for middlemen and expensive fees, does the customer indeed trust or even need banks in their current state anymore?

2014 was an extreme year for the global payments industry with even the most optimistic expectations clearly exceeded and revenues growing by dual from 4% in previous years to 9% in two thousand thirteen to 2014, taking their profit from $1.Five trillion to $1.7 trillion and global payments enhancing its share of the total bank revenue from 38% to 40%.

According to a report by McKensie, this revenue from global payments is set to proceed to rise at a relatively stable annual rate of 6% during the next four years, exceeding $Two trillion by 2020.

Will the banks rivals get through this time around?

While banks have always faced competition, history has shown that most of their rivals uncommonly build up a solid footing. During the dot com boom of one thousand nine hundred ninety seven to 2000, less than 10% of payment startups survived, with PayPal being the most notable.

However, the majority of experts are expecting this time around to be different.

Never before have banks had competition from the largest and most valuable companies in the world such as Apple, Samsung, Google, Facebook, Microsoft, Amazon and Alibaba.

These companies have loyal and very engaged user bases, are integrated into many aspects of their customers’ lives and have massive cash reserves. Combine this with them having the benefit of revenue rivulets beyond payments and you have formidable competitors.

Smartphones with brainy payments services

Android Pay means more Android platform users for Google; AliPay means more e-commerce sales for Alibaba; Apple Pay means more iPhones are sold, enabling them to reap value from the existing payments value chain and upend pricing models by providing payments services either free or for significantly below-market prices.

Global smartphone invasion by population is expected to exceed fifty percent by two thousand seventeen and as more users become habitual to how they can accommodate a multiplicity of their everyday needs, there will be a shift from the use of bank apps to third party financial service apps by a segment of users.

In the United States, 33% of millennials aged inbetween fifteen and thirty three believe that within the next five years they will not need a bank at all.

Recall even however Apple Pay, Samsung Pay and AliPay can suggest cheaper transactions for the reasons stated above, there is still the Visa, American Express and MasterCard fees which take a chunk out of retailers’ profits.

The thickest threat of all to banks profit

This is where the fattest threat of all to banks profit in payment revenue comes in as the digital currency Bitcoin. It eliminates the need for banks, credit and debit cards entirely, suggesting secure, global and instant payments with practically no cost to the payer or receiver.

Financial institutions, central banks and payment processors know that the Blockchain is the greatest technological innovation in generations and it makes their existing systems seem outdated and will eventually make them obsolete.

They know with the rising adoption of smartphones and non-bank based payment applications, and the technology behind Bitcoin simplifies for users over time, their trillions in profit of payment revenue every year is in danger of disappearing.

They can’t take control of it, they don’t even know how to regulate it, and they are fully aware that at this stage they can’t even stop it.

Bitcoin vs. Controllable Blockchain

Their only option is to disregard the word, dismiss it as tainted and attempt and hoodwink mainstream society into the trend of using a fresh buzzword like Blockchain or distributed ledger while coaxing them of the benefits of their Blockchain which they can control and at the same time retain some profits from.

When you realise that this is a fight for $1.7 trillion a year in profit, which is 40% of the bank's total global revenue, you can understand why they choose to use the term Blockchain instead of Bitcoin.

In the long run I don’t think the name used will matter much as the honey badger of money is still on an unstoppable journey to mainstream adoption over eight years later with transactions and trading volume at all time highs.

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