I have long been attracted to the topic of cryptocurrencies, but I don't yet fully understand what the cardinal difference between them and traditional banks is. Yes, I know that crypto is decentralized, but what does that mean in practice? How do transactions work, security, and what makes cryptocurrency so special in general compared to the banking systems we all use on a daily basis? I'm interested in hearing an explanation from someone who really understands the topic and can explain in simple terms how it all works. I would like to know what the pros and cons of each system are.
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This is an interesting topic. When they talk about the differences between real banks and cryptocurrency banks, it all comes down to how they handle your funds. This is a pretty open question and this article https://ocnjdaily.com/news/2024/sep/24/crypto-banks-vs-traditional-banks-key-differences/ helped me understand it. In regular banks, your money is managed by third parties, i.e. banks that control transactions, charge fees and provide security. With cryptocurrency banks, you have more control over your funds because transactions are decentralized and run through the blockchain. The key difference is the lack of middlemen and faster transfers.