Bitcoin Forum

The TradFi has been in existence for a very long long time where banks, central banks and governments are in charge of the flow of money. But with crypto, there's a change; no middlemen, no permissions and an absolute self-control of funds.

Yet, many has disputed that crypto is in no way replacing the system rather it is building a new version of it (the system). Big exchanges still behave like banks, stable coins depend on fiat reserves, and the governments are experimenting with CBDCs

So what exactly is going on? Are we witnessing a financial revolution or is crypto slowly being incorporated into the same system it wanted to replace?

For me, I think crypto began as a rebellion but is now evolving into something in-between, like the bridge between freedom and structure.

What are your thoughts? Will crypto truly replace traditional finance fully, or will they end up merging over time?

When it comes to Bitcoin, it's a more revolutionary system than what traditional finance offers, as it offers direct asset ownership to its holders and allows them to freely manage their assets. Bitcoin's decentralized network allows no single party to control or manipulate the network, and all transactions are transparently recorded on the blockchain. In other words, it's far superior to what traditional finance offers.

But if it's about other shitcoins, I don't know, and I don't care what happens to them, because they are different compared to Bitcoin which is decentralized, shitcoins are mostly created for speculative purposes or for short-term profits for their creators.

Just because bitcoin is widely accepted now doesn’t mean we will forget how back then bitcoin was a controversial sensitive topic because governments were against it and only a few people would have known and understood it as opposed to now where almost everyone knows about it.

You are talking about smart contracts that get utilized to create defi which isn't truly decentralized. Those dapps still got your money in custody.

If we talk about bitcoin it's true decentralization, permissionless and no middle man. An entire different story if we talk about something else. The revolution is with bitcoin.

As for the other blockchain, it's more of incorporating tradfi participants to blockchain and facilitating big institution.

Not a revolution, but definitely an innovation. The blockchain and self custody that it enables are truly original developments in fintech. It might have turned out to be revolutionary had masses of people adopted it instead of mostly big capital with the arrival of ETFs. But not enough people saw its potential early enough, so they got left out.

None of these will happen and not be of interest to Bitcoin, because the existence of fiat cannot be a challenge to it's uses or adoption, they both are currency but serves on different purpose, the people are the ones that are deciding on using bitcoin over fiat because of financial privacy, which we see this itself revolutionizing the financial economy because that is what the people want over fiat system, now time will tell, either to expect Bitcoin alone or both to exist.

I think there will be a merge with time. Entire replacement is not really possible as governments and institutions won't give up control of money totally, but the idea of crypto such as transparency, borderless payments, user ownership, are powerful to ignore. What we are seeing is a blending: traditional finance adopting crypto's tech and crypto adopting certain structure of TradFi for stability. This began as rebellion, and it is turning integration, a hybrid system where both can coexist and get each other influenced.

True, not everyone believed in Bitcoin at first but considering the number of people who has ventured in Bitcoin because of all it has to offer, don't you think even those who we feel were left out can still slowly and steadily join the community. I mean there are lots of goodies attached to Bitcoin which you and I know that makes it far more preferable than the TradFi system.

True, only time will tell if they will continue to coexist or Bitcoin will be there alone, cause right now I don't think anyone who knows Bitcoin very well will choose the fiat over it.

Crypto is becoming institutionalized since Wall Street investors started buying into crypto but let’s be honest, we wanted that to happen as well. There was a time when btc was below $10k and not making any big moves. We literally invited banks and other institutions in so the price could move faster.

It used to be a rebel project and now to many people it is just another banking product. Many people buy btc through ETF’s. In the past that was considered a very bad idea but nowadays nobody says anything bad about it.

We used to see “be your own bank” quotes everywhere. Nowadays we see them very rarely.

Maybe other crypto coins can merge but not bitcoin. Bitcoin cannot be included since its consensus would not allow a merge with traditional finance, A hybrid model which may be possible is being integrated with stable coins which has its value pegged to Fiat (mostly in US dollar) and laced with lots of regulation can be fit for such integration with Tradefi, some centralized coins too can add to the list. Bitcoin adopting the regulated structure of Tradefi is not going to happen anytime soon.

For me, it will not replace traditional finance; both will stay, just like how Bitcoin was created and is still running and still useful now.

People now have the option to use Bitcoin or not, so for me, it's not necessary to replace traditional finance itself. But that's what Bitcoin is just solving most of the problems we have in traditional finance, which is nice.

They all will stay together: fiat currencies, Bitcoin, altcoins; central banks, commercial banks, centralized exchanges and decentralized exchanges, even mixers. It's naturally that in the world, it's impossible to completely eliminate things that can bring freedom to people and criminals always exist on earth so even governments are all against mixers, it does not mean in the future mixers will no longer exist.

For things not related to criminal activities, people want diversification, multiple choices and therefore many things will exist together for giving people different options.

Not all cryptocurrencies offer true financial freedom. To be precise, only Bitcoin gives you full control of your funds, entirely free from government or central authority interference.

Many of today's other cryptocurrencies are centralized. This means they can be easily controlled and manipulated.Bitcoin, as the original, offers the key feature we all desire, but too few people are taking advantage of it. Some prefer those centralized coins because they seem more stable, but they are missing the bigger picture.

Cryptocurrency may not fully replace the traditional financial system. It was designed to be an alternative, which is how Bitcoin was created. They have different roles, so it's unlikely one will completely replace the other.

The main purpose of crypto is to providing an alternative system that being fully permisionless. No one was saying it's gonna replace the centralized and permissioned system that is currently exist now.

It seems you're just being fooled to the click bait created by blindly supporter about crypto to replace the centralized system.

In fact, crypto can be called as a bridge between permissioned system and permissionless system. The value that went from the financial institutions to the crypto has proven it.

This makes crypto may be merging co-exist with the traditional system, and not killing each other.

Crypto would not replace Traditional finance under the watch of the government. Have you forgotten that Fiat is the government tool executing its monetary policies and running the country and is the backbone of traditional finance. Both of them can coexist, those who want to safeguard their funds from inflation and central control can keep it in bitcoin and practice self-custody. Traditional finance and Defi would coexist for a long time. I do not think any of them is replacing the other any soon neither do I envision any merger between them. The only possibility of DEFI having the features of Traditional finance is with the use of stable coins which draws its value from fiat.

As for the first one, we never know yet because cryptocurrency is not yet on its 100 percent adoption mode but a person can still decide whether if they will rely fully on crypto or not. For the second one, there are merging that occur already like banks now supports crypto or an individual also uses both crypto and fiat. Fiat was created first than on BTC but it can be a challenge to crypto because fiat has its own unique properties like it is physical and can be used or spent easily.

I agree that bitcoin will be incorporated with banks and governments which does not mean that bitcoin is breaching its own purposes. Until any government controls the core algorithm of bitcoin, I would not call that bitcoin deviated from its purposes. We cannot do anything about participation of a government or bank but in bitcoin's point of view, they are still just another user to the ecosystem.

And even up till now, there are still countries that are skeptical about bitcoin and haven't fully accepted it. However I believe the level of acceptance bitcoin has gotten, is way better than the initial stage. But as at today Bitcoin is systematically edging out the traditional financing system and that is why governments in other not to totally loose out on this technological advancement, they are bringing up CBDCs to try and mimic bitcoin operating system, but it's all to no avail as bitcoin is deeply rooted in it's own revolutionary style.

Bitcoin is not argitating for stability in the crypto networks, instead, all of them have seen how it thrive through and become what they entire world needed, far be it that you discover how bitcoin has been found depending on other coins or networks for it survival, instead they all works towards being in a similar pattern to its patterns, that's why after Bitcoin, every other coins are regarded as altcoins.

We all have different ideas of what the market is finally going to end up doing and to me none of those ideas are that bad or wrong because they'll all mean a success for Bitcoin. If Bitcoin was to merge with the traditional market. That's a positive news for the holders because then their holding wasn't in vain and if cryptocurrency was to replace the current currency that we have, that'll also be perfect for the early believers that invested in Bitcoin on time. The market has always proven that any new developments that gets accepted by the people will always dominate and so far, Bitcoin has being gaining more ground. It's only a matter of time before we all accept that the Blockchain technology is the guarantee way of operating our finances and when that happens, adoption of Bitcoin is going to be the next option.

The traditional banking system will look for all means to survive which is the reason, why they adapting bitcoin. But, I see this like we cannot take bitcoin to each and everyone but bitcoin will reach maximum people in a country only through traditional channels. People will come to know about bitcoin when their bank would be selling it and then same people will adapt bitcoin for enjoying "be your own bank" concepts (with or without closing all relationship with banks). Adaption of bitcoin will not happen over night but might take decades and for pushing the adaption, I believe incorporating into the same system seems a right way to boost the adaption rate.

It depends on what you mean by cryptocurrencies (bitcoin or altcoins). Any cryptocurrency (except bitcoin) has a designated "owner", so it's a stretch to talk about "self-control of funds".

Cryptocurrencies allow (and most likely will) the traditional financial system to change and move to a new level. One could say that cryptocurrencies have served as the "push" for this process.

We are witnessing a process of a certain merging of two systems: the traditional and the alternative (cryptocurrency).

Only bitcoin can be said to have been created to replace the traditional system (due to its significant shortcomings). Altcoins are merely "clones" that pursued their own goals, often integration with the traditional system.

Yes, what the mix of the traditional financial system and cryptocurrencies is starting to turn into resembles a kind of "Frankenstein" (can you really call something that "worsens" the financial lives of users, for example, KYC, a revolution), when it is not the advantages of the system (one or another) that are valued, but the disadvantages.

I expect integration. The traditional financial system we're accustomed to will be profoundly altered by cryptocurrencies, and will effectively cease to exist in its original form. In turn, cryptocurrencies will not be allowed to remain an alternative system (of digital financial freedom), much less a replacement for the traditional financial system. It will be a mix of the two systems, incorporating everything that's most disadvantageous to the end user-meaning, you and me.

We weren't expecting the government to openly embrace a system that will take away control and limit their influence on how people go about their transactions.  Emphatically bitcoin as a base crypto currency truly started out has a rebellious innovation but with the impressive price hikes and the competitive improvements on its layers the government has no choice but to embrace it at the later end.

The crypto revolution can be summarized in one sentence "Be your own bank!". Do you see billions of people "being their own banks"? Nope.
Maybe the crypto revolution has failed because of this. The vast majority of the people are still dependent on banks, fiat money and traditional finance. We heading towards the direction you are describing. The crypto is being incorporated into the fiat system. Maybe this will be a good thing in the long term, when most people will find a way to keep their financial assets in their own digital wallets, without having to rely on banks and brokers.

They are beginning to realize that blockchain technology is not just a threat; it also offers significant opportunities.
Bitcoin may not be fully controllable or takeoverable, but its impact on the global financial system has been proven to be too serious to ignore. Rather than fighting the system with new innovations, governments may now prefer to adapt. This is evident in the many countries that have begun creating crypto tax regulations, licensing exchanges, and even CBDC projects (digital versions of their official currencies). However, governments certainly want to maintain control over the monetary system, but at the same time, they know that crypto innovation is too valuable to ignore.

Maybe it's because government found out a way to control which is the CEX as a choke point to enforce rules.

But bitcoin is still truly decentralized and uncontrolled by single entity. Even if government is forcing KYC bitcoin is still pretty much the same decentralization that we have a decade ago so there's no problem.

I personally don't think the adoption from government is coming from the gains though.

Tradfi and Bitcoin/crypto are opposite systems. An upgrade to the other will prove incompatible unless it's not true crypto or tradfi. Bitcoin was Infact a backup solution to a failing tradfi and lack of regulation to keep it in right order. It has since become a primary and more ethical financial system for many. So, we can't afford to hand back control to the other and trust that the problem won't repeat.

And the best way to avoid becoming a tradfi is to ensure that the ideals of Bitcoin remain uncompromised, and/or build systems and platforms that do not deviate from the ideals...ideals like: decentralized control, open network, transparent transactions, data immutability, censorship resistant, etc.

Ofcourse,  we expect false cryptos, altcoins, or those deviating from the ideals and existing like tradfi to be regulated and eventually become part of tradfi. This is why one must careful depending too much on them thinking they are using decentralized system/platforms.

It is still evolving and Bitcoin was the first proof of concept that you can have a global currency which exists purely on an entirely transparent ledger, but it certainly will not be the final solution because it does have capacity limitations that it may not be able to overcome. Just like in precious metals though, what you might find is that bitcoin is like gold - quite rare yet highly desirable, but limited quantities keep the price heightened. However it needs something like silver, which is still rare but much more accessible and usable due to the lower pricing on the metal. There may be other offshoots too, like platinum. Ultimately the world is constantly changing and we never had something like this before Bitcoin came along - a financial network outside anyones exclusive control.

bitcoin  started as a kind of rebellion against the traditional economic system,, however over time, it is morphing into a hybrid system not completely replacing the old guard but forcing them to adapt. As you properly point out, online brocker or exchanges are now performing like banks &  stablecoins are reckon on fiat reserves,  this actually  blurs the line between freedom &  authority

however  you know,  till now Bitcoin remains stable, despite the centralized chaos.. It is completely decentralized &  censorship resistant, something neither stablecoins nor CBDCs are. In my opinion, the entire crypto space will probably be related to a kind of TradFi. But Bitcoin will truly be a symbol of revolution,  a real way out of the traditional system

Government can definitely not centralize cryptos but they can impose strict rules and regulations which will make our lives way more difficult because at the end we all have to cash out bitcoins. Without actually cashing out bitcoins, we simply keep on reinvesting or depending on online use cases.

Cryptos are great but what will be the benefit if we can't convert them into  fiat maybe at the end of our investment cycle? Governments can easily impose bans or strict regulations for crypto withdrawals or even spending cryptos for day-to-day purchases. This can be controlled by the government but us holding or trading cryptos will never be monitored or governed.

Government does have a lot to gain if they plan on regulating cryptos because this will somehow increase the income coming out of tax payers and this can also be used to stabilize the economy. Governments should seriously start thinking about the positive sides.

Cryptos is never going to replace our traditional system instead what I believe is it will be incorporated in the same system which will make the system more efficient and trust-worthy. Cryptos are an individual financial tool which does not need any intermediary from such financial institutions. Cryptos can survive without them as well but there is a lot of benefit for these financial institutions if they adopt cryptos into their system so they themselves will find ways to correlate with cryptos instead of treating them as an opponent.

Cryptos are basically meant to be an investment tool which can make investments more transparent and profitable. They do have some payment integrating functionalities but that is still not the core feature.

Yes, of course crypto will not replace the traditional system, but the circulation that occurs in many circles almost looks as if the system has changed. Crypto is a virtual currency whose security is guaranteed by clear cryptography without intermediaries and is also tied to any institution.
The advantages of crypto can be used by all groups safely as a transparent global investment in long-term investments, transactions using crypto are certainly protected by cryptography and there are several payment integration functions currently.

There is an assumption in the question that crypto is one thing and it has one purpose, and this is where things get slippy. Bitcoin is a creation of cypherpunk concepts regarding financial independence. Then Ethereum introduced programmability. Then there were dog coins and NFT casinos, and blockchain solutions to issues that did not exist. This lumping it all jumble confuses what is really interesting.

It is legitimately new what Bitcoin accomplished (making the digital scarcity without trusted third parties). The financial crisis that took place in 2008 is due to the fact that centralized institutions failed miserably and those who were behind it were left facing no penalty with millions of people left without houses. Bitcoin replied: alright, what about taking out cheating? Not by rules or controls, but by numbers and laws nobody can alter.

However, you are exactly right with that comment on exchanges and stablecoins. Majority of people do not desire revolution. They would prefer the system that they have to be efficient and cheaper. The crypto sector figured this, and began to relocate bank construction into better branding. That is all right, I suppose, but it kills the point.

Thus, Bitcoin does live on as this weird parallel system for those who need censorship resistance - dissidents, people in failed monetary systems, everyone who learned the hard way that "your" bank account is not really yours. All the rest is likely to be consumed or repressed into irrelevancy. Not a revolution. Not an upgrade. Yet another addition to the growing toolkit.

The latest innovation in modern technology is block chain technology. This technology allows for fast transactions and is very transparent. There is no system of concealment or fraud here, so it is different from the traditional banking system.

It is a revolutionary system. Currently, many countries and institutions in the world are supporting Bitcoin and its acceptance is gradually increasing more than before.

Although the governments of many countries are trying to duplicate the technical advantages of Bitcoin, this is not possible because Bitcoin is created according to its own characteristics.

I'm still in the "revolution" camp. It can however be a bit tricky to replace TradFi.

First, one has to ask the question: which parts or services of TradFi can be replaced? Banks are quite good, although not perfect, in assessing risks. For example the loans business is something very difficult to replace by a crypto-based solution, because there are so many vulnerabilities that can be "gamed" in a completely automatized system. There is no DeFi solution still where you will get a loan to finance your house, only providing a proof of income. In theory, one could tokenize a proof of income and then use it as a collateral in a DeFi protocol, but that would be hardly acceptable for people who don't like their job to be public.

So "banks" are hardly being replaced by crypto. But there can be traditional bank services, like trading accounts, that can become accessible to everybody via crypto, for example due to RWA tokens platforms.

If ICOs evolve further into a more trustworthy process, they can at least provide a strong tool for business funding and loans. But for that to happen, we would probably need some different institutions "regulating" and "certificating" ICO processes, evaluating tokenomics really fairly (and not bribed by some large altcoin corporation).

The real revolution would however take place if people can save in Bitcoin (or crypto). Not only the 1% "you can afford to lose", but a large part of your wealth.

I honestly wish I could confidently say that crypto is here to replace traditional finance fully but unfortunately, I can't say such since me myself don't believe that will happen, at least, not in our current generation and if thing like this is really going to happen, it will definitely or likely be when we all here have long gone to join our creator and our children's children have taken over..

So I would rather say that crypto is here to merge with traditional finance, though in a such a way and manner that we the consumers don't have to completely depend on banks and other centralized systems like it used to be in previous times..
In this new system, every person's now have the opportunity and ability to either manage their funds themselves or still leave it to be managed by centralized entities, this is what makes this new system difference and definitely better than the old traditional finance that I believe will gradually phase out.