Summary of The rise of Bitcoin doesn’t mean the end of banks. Here’s why

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The rise of Bitcoin doesn’t mean the end of banks. Here’s why summary
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As bitcoin and other cryptocurrencies gain more acceptance, many wonder if the blockchain technology behind it will usurp the role of banks. According to professors Dirk Baur and Niels Van Quaquebeke, the answer is a resounding no. By applying historical context to the bitcoin craze, the authors shed light on why the currency may be unworkable in the long term without a governing central authority. getAbstract recommends this thought-provoking article to bankers, investors and anyone interested in the future of bitcoin and blockchain.

In this summary, you will learn

  • How bitcoin works,
  • Why bitcoin lacks the key element of trust that currencies have historically derived from central authorities, and
  • Why bitcoin and other digital currencies are unlikely to usurp the role of banks in the monetary system. 
 

About the Authors

Dirk Baur is a professor at the University of Western Australia. Niels Van Quaquebeke is a professor at the Kühne Logistics University in Hamburg, Germany.

 

Summary

Despite the increasing prominence of bitcoin, banks will undoubtedly continue to play a central role in the global monetary system for many years to come. The reason, quite simply, boils down to trust. Bitcoin relies on blockchain technology, an electronic mechanism that allows one party to send payments to another without going through a financial institution. Instead of trusting a bank, blockchain users place their faith in technology to make the transaction work. History shows that only a few cases exist in which a currency operated successfully without the guidance of a central authority, and bitcoin is unlikely to evolve into the next example. 


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