Online banking

Banking was originally where people would go to store their money in a large vault to keep it safe, and the more money you had the more you would be able to make with investments and interest. When you were paid it would be done with a physical check would then be paid to the bank and the money put into your account. This system has evolved over time produce the modern online banking service you see today.

Modern online banking
Nowadays rather than a physical payment people get their salary via an electronic signal which goes to the bank to tell them put money into your account. Similarly when you bank in an amount of physical money like a £20 note, that will be converted to data and then you bank balance will increase by £20. The newer, faster and more convenient system allows people to control their bank account whenever and wherever they want to due to it being simple data rather than notes and coins in a bank which is harder to track and count.

However, whilst these advancements are making our lives easier they are in fact taking a long time to do so. This is mainly due to people not trusting the system, the disconnection from their money makes it seem like it’s harder to control and as a result this makes them feel it may be tampered with easily. This highly untrue as the only breach in security to someone’s account can only be cause by the person themselves. A system called phishing is used by hackers and thieves to trick the user into giving their details by giving out a link which sends them to a mimic site to then type in their details. This can be avoided in a number of ways, for example to avoid phishing you may get free antivirus to scan the link to check if it is legitimate or not, or simply learn how to differentiate the real emails
from the fake ones. Furthermore to increase security even more, card readers are used by some banks to get a newly generated passcode every time someone wants to log in and this is further reinforced by memorable information where people must recall the character of a sentence or phrase they chose.

Whereas most banks would have started off years ago as large physical building such as Barclays or Lloyds, they have now moved to smaller locations and moved more online. Due to this less money is stored in banks and there is no need for large vaults. Furthermore gold is also used as a real valued currency to trade with and similarly in recent years oil has been used in the same way, this is better than actually money because it has physical value rather than virtual.

Some banks like first direct have never been and are not physical and are purely online and this makes way for them to put more money into their security systems and therefore makes them a slightly more trusted online bank. The lack of a physical bank also hugely reduces running costs of the business as less people are needed to maintain the company.

Virtual currency
Bitcoin is a currency that was created by the public and while it does not use a bank it is purely online and virtual. The original way to get Bitcoin was for a computer to solve algorithms and earn Bitcoin for doing so. The landscape for the currency involves no banks and all Bitcoin is either still locked by an algorithm or owned by someone to be traded in E-commerce. This system makes Bitcoin the only currency used worldwide with no bank or government involvement, the public have complete control over it, and where it goes.

Online banking has huge advantages with it giving people access to their accounts to make transfers and payments to others. Furthermore it’s much cheaper for banks to have online banks as it creates less demand for physical banks to go to and therefore less staff is needed to manage them. However this exposes massive drawbacks for the workers at banks as they will end up being paid less or even being out of the job.What is more, its advancement is taking a lot of time due to people being less trusting of it.

Sources:
http://www.norcimo.com/blog/archives/2006/04/more_lloydstsb.shtml
http://sketharaman.com/blog/2014/06/