One of the more interesting misconceptions regarding Bitcoin is how the popular digital currency is not offering any banking services to its users. This is only normal, as Bitcoin was designed to let people control their own funds, rather than enlisting the help of third party providers. At the same time, some companies are exploring how banking services can help bitcoin gain more acceptance. As is always the case, third-party services should be used at one’s own risk.
Banking Services In The Bitcoin World
Depending on whom you pose the question to, Bitcoin will either never need banking services, or need them right now. Transitioning from the financial ecosystem we all know and despise to Bitcoin takes some time to get used to the new sets of rules and options. After all, very few people have ever been in full control of their finances in their life.
Unlike banks, Bitcoin does not offer lending services, savings accounts, or debit cards by default. Various companies are exploring these hybrids models of merging Bitcoin with existing financial infrastructure, and some of those projects are quite satisfactory. Especially the companies focusing on how to make spending Bitcoin more accessible to consumers worldwide are seeing a significant level of success.
More traditional banking services for Bitcoin users, on the other hand, are not as fortunate as most people would like them to be. There is an excellent reason for that, as most people get involved in Bitcoin as a way to escape traditional banking services. The digital currency ecosystem offers plenty of options to replace most banking services while still putting people in full control of their money at any given time.
Companies such as BTCJam offer a way for Bitcoin users to loan funds for projects or other various needs. At the same time, this platform gives investors a way to earn passive income on their Bitcoin funds, as they put various interest rates on their loans as they see fit. But there is also the risk of never seeing one’s funds back, making this type of banking service less appealing.
BitFinex is a well-known Bitcoin exchange that offers a similar service as well. Users can lend money to margin traders in exchange for an interest rate. Whether or not doing so is a good idea, remains to be seen, though. Bitcoin is a non-refundable digital currency, and there are no guarantees for investors ever to see their funds again.
In the end, it all comes down to customer preference. Using banking services in the Bitcoin world will more often than not requires users to rely on third party service providers. This means giving up financial control once again, which is exactly the opposite of what Bitcoin was designed to provide.
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