Bitcoin is the bank

Say I pay you using bank ledger money: I instruct my bank; my bank grants permission, updates its private ledger and tells your bank; your bank grants permission, and updates its private ledger.

But if I pay you with Bitcoin, there are only two steps: I make an entry in Bitcoin’s public ledger, and the Bitcoin network confirms the transaction. And that’s it. I’ve sent you the money, and the transaction is complete.

Nothing physically moved: the money stayed where it always was, on the Bitcoin ledger. But now the ledger shows publicly that the money was transferred from me to you. Our names aren’t recorded in the ledger – just our Bitcoin addresses, virtual locations which we control.

We didn’t need banks to hold our money, receive instructions, grant permissions, or transfer our funds by updating their private ledgers.

Instead, we just used Bitcoin’s public ledger. We didn’t need banks at all.

Bitcoin is the bank.