Bitcoin Forum

Yesterday morning, several banks in Australia started rolling out a new payment system they’re calling NPP, or “New Payments Platform.”

Until now, sending a domestic funds transfer in Australia from one bank to another could take several days. It was slow and cumbersome.

With NPP, payments are nearly instantaneous.

And rather than funds transfers being restricted to the banks’ normal business hours, payments via NPP can be scheduled and sent 24/7.

Across the world in the United States, the domestic banking system has been working on something similar.

Domestic bank transfers in the Land of the Free typically transact through an electronic network known as ACH… another slow and cumbersome platform that often takes 2-5 days to transfer funds.

It’s pretty ridiculous that it takes more than a few minutes to transfer money. It’s 2018! It’s not like these guys have to load satchels full of cash onto horse-drawn wagons and cart them across the country.

(And even if they did, I suspect the money would reach its destination faster than with ACH…)

Starting late last year, though, US banks very slowly began to roll out something called the Real-time Payment system (RTP), which is similar to what Australian banks launched yesterday.

[That said, the banks themselves acknowledge that it could take several years to fully adopt RTP and integrate the new service with their existing online banking platforms.]

And beyond the US and Australia, there are other examples of banking systems around the world joining the 21st century and making major leaps forward in their payment system technologies.

It seems pretty clear they’re all playing catch-up with cryptocurrency.

The rapid rise of Bitcoin and other cryptocurrencies proved to the banking system that it’s possible to conduct real-time [or near-real-time] transactions, and not have to wait 2-5 days for a payment to clear.

Combined with other new technologies like Peer-to-Peer lending platforms, fundraising websites, etc., consumers are now able to perform nearly every financial transaction imaginable– deposits, loans, transfers, etc.– WITHOUT using a bank.

And it’s only getting better for consumers… which means it’s only getting worse for banks.

All of these threats from competing technologies have finally compelled the banks to innovate– literally for the FIRST TIME IN DECADES.

I’m serious.

When the CEO of the company launching RTP in the US announced the platform, he admitted that the “RTP system will be the first new payments system in the U.S. in more than 40 years.”

That’s utterly pathetic. The Internet has been around for 25 years. Even PayPal is nearly 20 years old.

Yet despite the enormous advances in technology over the past several decades, the last major innovation in bank payments was back when Saturday Night Fever was the #1 movie in America.

Banks have been sitting on their laurels for decades, enjoying their monopoly over our savings without the slightest incentive to improve.

Cryptocurrency has proven to be a major punch in the gut. The entire banking system keeled over in astonishment over Bitcoin’s rise, and they’ve been forced to come up with an answer.

And to be fair, the banks have reclaimed the advantage for now.

NPP, RTP, and all the other new protocols are faster and more efficient than most cryptocurrencies.

Bitcoin, for example, can only handle around 3-7 transactions per second. Ethereum Classic maxes at around 15 transactions per second. Litecoin isn’t much better.

By comparison, there were 25 BILLION funds transfers in 2016 using the ACH network in the US.

Based on the typical holiday schedule and the banks’ 8-hour working days, that’s an average “throughput” of roughly 3500 transactions per second.

So, now that banks have finally figured out how to conduct thousands of transactions per second in real-time, they clearly have superiority.

But that superiority is unlikely to last.

It takes banks decades to innovate. They have enormous bureaucratic hurdles to overcome. They have endless committees to appease, including the Federal Reserve’s “Faster Payments Task Force.”

And most importantly, given that most banks are still using absurdly antiquated software, any new systems they develop have to be carefully designed for backwards compatibility.

Cryptofinance and other financial technology companies have no such limitations.

As my colleague Tama mentioned in the podcast we released yesterday, the cryptocurrency space sort of exists in ‘dog years’.

Things move so quickly that one year in crypto is like 7 years for any other industry.

Right now there is almost a unified push across the crypto sector to solve the ‘scalability’ problem, i.e. to securely transact a near limitless number of transactions in real time.

Those solutions will almost undoubtedly come from technologies that you haven’t heard very much about yet.

Hashgraph and Radix, for example, are two such ventures working on extremely elegant payment solutions that break the mold of previous cryptos.

Rather than build upon standard cryptocurrency concepts like blockchain, Proof of Work, and Proof of Stake, both Hashgraph and Radix have created their own algorithms from scratch.

This is the bleeding edge of the bleeding edge of a massively disruptive sector that has existed for less than a decade.

And there are literally dozens of other companies and technologies aiming for similar heights.

Some of them will undoubtedly succeed. And still other ventures that won’t even be conceived for years will have yet more disruptive power in the future.

The banks don’t stand a chance. The future of finance absolutely belongs to crypto.

https://www.zerohedge.com/news/2018-02-14/terrified-bitcoin-banks-forced-innovate-first-time-40-years

It is not something that is new to banks, it is true with everything. Competition is needed in order to ensure that innovation continues. Banks have had it easy for too long and have only faced competition from each other (hardly real competition because they can just 'agree' to be as lax as each other). Now that cryptocurrencies are offering a real alternative banks are going to have to start taking things seriously and prove to their customers that they are still the best choice.

Big Banks want to destroy Bitcoin before it destroys them. Bitcoin is the people’s currency and it has the potential to become a new currency, free of the control of big governments and big banks. They should be terrified.

Bitcoin has been the worst nightmare for governments and bankers.That's why they consider bitcoin as their main rival.They are trying their best to destroy bitcoin but poor boys,they could not do so.

Bitcoin has been the worst nightmare for governments and bankers.That's why they consider bitcoin as their main rival.They are trying their best to destroy bitcoin but poor boys,they could not do so.

There innovation might require them to change personally not technologically as banks suffer this kind of pullout from clients not because they’re not us technical adaptive to the trend but because of greediness and self serving interest that makes every bankers unworthy of any money from the public. It’s more of bankers versus the people and not with the cryptocurrency.

Bank is just setting and do nothing about technology that’s  why as of this moment they trying to coup up with the technology but it seems they far behind  as what block chain technology had been done that s is why Crypto currency and  blockchain is considered a trait to the banking system.
[/quote
]Yeah considering that if you are a bank costumers and you can observe how dynamic block chain technology is all you can do is fall out your account from the bank and transfer to bitcoin since bitcoin more profitable than bank because the technology is faster than bank. I don’t know if the bank can coup easily in terms of infrastructure because it needs much resources. While Bitcoin has the miners that help the development of block chain infrastructure.

It's about time too, I'm glad that bank seem to have picked up on the fact that the service they offer is getting more outdated every year.
My own bank now has a feature that you can make online payments using a QR code, just like you do with Bitcoin.

They've also enabled 1-day transfers (express payment), which used to be something you'd have to pay extra for.

It's clear to me that part of this innovation was pushed through because of the rising popularity of cryptocurrency.

Nice to known the revolution is coming on strong and all those dinosaur banks would have to either shape up or shift out. On the part of the governments, playing the Ostrich won't solve anything, way forward would be to accept change and stop standing in the way of Bitcouin and other cryptocurries. Unknown to most governments, they stand to gain so much more from Bitcoin by accepting 
and embracing.

A big problem for banks is this, even if they were able to match bitcoin in everything I'll still choose bitcoin, why? Because I'm my own bank, bitcoin gives me independence of banks while banks will only make me rely more on them and this is something banks will never give us because this will be the same as giving up their business model, so even if it does not seem like it, banks are in big trouble.

Decent content. Worth a read for anyone interested in bitcoin or crypto and how they stack up against banks in terms of competition.  :)

On a side note, this is a positive piece zerohedge published on bitcoin.  I don't know how ZH accumulated a reputation for only posting anti crypto content. It may be undeserved.

The article mentions hashgraph and radix are two of bitcoins best hopes for faster transaction speeds. I haven't heard of either project. Will have to look into both. Does anyone have info on either they ccan share?

Its an interesting observation to suggest that centralized industries such as banking are prone towards stagnation and industry wide lethargy. So it would seem bitcoin is forcing the banking industry to innovate and make progress for the first time in decades... Interesting point.

The only way banks can survive the fast paced changes is Adaptation. They must be able to catch up with the changing ways of the society, otherwise, they will become obsolete.

Indeed, but i wonder if these banks are united or Is their policies will only for their associates in every nation? because here in our country in which Bitcoin is not declare a legal but our Banks are very supportive to Bitcoin in which our Central Bank did not restrict the use of it but instead they help us by releasing a guidelines on how to avoid of being scam when joining Bitcoin investments so therefore for me, this news will not cover the whole world banking system.

Wow, quite surprised that ZeroHedge published this article. They are really known for their anti bitcoin stance (they are more on gold). This is one of the few that the author changed the tune. However, I'm not surprised at all with the Australia moved since they have embrace bitcoin and crypto since last year. Its good to see though, and I hope that this can set precedence in a worldwide scale. And they really knows how bitcoin should really works, fast, seamlessly without borders unlike traditional banks which take days to move and transfer your funds, and if you need it immediately, you have to pay more. Yeah, I guess this will be really the trend once crypto find its way to other nations but I'm sure that there will be strong resistance from the old, boring traditional banks. And if banks doesn't keep up with the trend, sooner or later they have do otherwise they will lose billions of revenues.

Not only could they not destroy Bitcoin but if you look at the 5 stages of grief they have now in my opinion moved on to stage 5 and we all know what happens there. If not I will paint it out for you.

1) Denial=That silly Bitcoin thing can't work
2) Anger=Only drug dealers and pedos use it
3) Bargain=We want blockchain not Bitcoin
4) Depression=?? (Skipped it or similar to 3)
5) Acceptance=Oh shit guys, lets change something before they leave us

How I view it we are in stage 5 and by the time that happens they are already screwed and left behind. They can try innovate now but they innovate on a linear curve whereas cryptos innovate exponentially. Good freaking luck catching up banks, you dug yourself an unfathomable hole on this one ::) 8).