Bitcoin and Cryptocurrencies - A Paradigm Shift in Banking?

Bitcoins

@adil2018 has written an interesting post here:

https://steemit.com/bitcoin/@adil2018/bitcoin-is-not-a-bubble

The Bitcoin is not a bubble. It's a paradigm shift. It should (and it most certainly will) replace the present banking system in most if not all nations.

Bitcoin did experience problems in its early years. It was suspected of enabling fraud. For instance, see these:
1 https://dealbook.nytimes.com/2013/12/05/in-the-murky-world-of-bitcoin-fraud-is-quicker-than-the-law/?_r=0
2 https://www.valuewalk.com/2013/12/bitcoins-fraud/
3 http://www.nber.org/papers/w19747

Of course, when a big amount like $100 million is lost, it will draw ire. This was in 2013. Moreover, statements like this from Gaven Andresen:
https://www.technologyreview.com/s/540921/the-looming-problem-that-could-kill-bitcoin/
And Mike Hearn:
http://www.bbc.com/news/technology-35343561
Both of whom developed Bitcoin, would've surely discouraged investors and interested people.

But what turned the tide in favor of the cryptocurrency in such a way that despite all the negativity and skepticism around it (even from its own developers!), it is fast becoming an indispensable asset in trade?

Singapore government owned firm Temasek Holdings decided to experiment with Bitcoins in 2014.
https://www.coindesk.com/singapore-government-owned-investment-firm-experiments-bitcoin/

In 2015, Singapore PM Lee Hsien Long termed Bitcoin a success and cited it as a sign of the future.
https://www.cryptocoinsnews.com/singapore-prime-minister-cites-bitcoin-sign-future-speech/

The nation where Bitcoin is fully regulated: Japan.
https://spectrum.ieee.org/tech-talk/computing/it/japan-takes-lead-in-legitimizing-digital-currencies

Bitcoin has increased in value over a million times in 7 years.
https://99bitcoins.com/price-chart-history/

What makes Bitcoin more advantageous than even other cryptocurrencies for that regard?

1. It's limited in number. At present, there are only 16.5 million bitcoins. A maximum of 21 million bitcoins will exist totally, so the more it's mined, the costlier it becomes.
2. Bitcoin transfers reduce transaction costs that exist in other channels/routes.
   https://www.moneyweb.co.za/moneyweb-radio/investing-in-bitcoin-what-you-need-to-know/
3. It's anonymous and also harder for governments to regulate.
4. Sales taxes are minimal to nil in bitcoins.
5. As long as there is an Internet connection, bitcoins can be traded with no trouble.
6. Since bitcoins grow in value with time, people will prefer to park their currencies in bitcoins instead of banks. Banks can increase gold/fiat currency supply, but bitcoins in circulation will remain fixed.

However they do have their own downsides:

1. Competition from other cryptocurrencies.
2. Very volatile, varies in value dramatically. For instance:
   https://www.cryptocoinsnews.com/newsflash-bitcoin-price-falls-3000-china-influence-wanes/
3. It's not used as currency, but investment.
   http://positivemoney.org/2014/04/bitcoins-fatal-design-flaws/
4. Bitcoin can process maximum 7 transactions per second, compared to Visa that can process 2,000 transactions per second, and if necessary, 56,000 transactions per second.
   a https://www.technologyreview.com/s/540921/the-looming-problem-that-could-kill-bitcoin/
   b http://www.ibtimes.com/bitcoins-big-problem-transaction-delays-renew-blockchain-debate-2330143
5. Poor liquidity:
   https://futurism.com/the-age-of-blockchain-crypto-has-a-major-problem/
   Due to its limited number, its liquidity could be dented unlike fiat currency. However Omega One is trying to solve this.
   https://omega.one/
6. Security. Anybody who can hack your account/network has access to your bitcoins.
   https://99bitcoins.com/know-problems-with-bitcoin/
7. Bitcoin could fall into the hands of those who can afford thousands of dollars buying bitcoin mining hardware.
   https://99bitcoins.com/know-problems-with-bitcoin/
8. Governments can't control or compete with bitcoin, but will surely try to stop it.
   https://www.coindesk.com/yunbi-bitcoin-exchange-latest-close-china-crackdown/
9. Most businesses still haven't adopted the cryptocurrency.
   a http://www.thehindu.com/business/Economy/use-of-bitcoin-illegal-says-govt/article17702483.ece
   b http://time.com/money/3658361/dell-microsoft-expedia-bitcoin/
   c https://www.stearsng.com/article/dont-sell-me-bitcoin-ripple-or-ether

With that being said, I believe once the above concerns are addressed, bitcoins and other cryptocurrencies can replace the banking system which takes a significant chunk of GDP in every nation and simplify trade. Even if bitcoin is too expensive and out of reach for some people, they can rely on Ripple, Ethereum, Litecoin, Dash, etc.

IOTA is another new cryptocurrency that could help.
https://iota.org/

I've not fully understood this, but from what I inferred, simplified business to business interactions is one of their goals and the Internet of Things is one of their tools.

This, my friends, is the future of banking and finance.

Thank you all for reading. Have a great day.