In 2024, it’s not just electricity prices that will increase. Bank charges are also experiencing a notable increase. Can bitcoin, whose initial ambition is to be a peer-to-peer electronic cash solution, become a serious alternative to increasingly expensive banking services?
A significant increase in bank fees
After a stable year 2023, banks are catching up. In 2024, bank fees will increase on average by 2.5% to 3%. This is what the consumer association CLCV reveals in its annual study. At issue: account maintenance fees, and the cost of bank cards used for everyday payments.
Whether you are a business, a small consumer or a client with a large wallet, the increase impacts everyone. Thus, a small customer will have to pay on average 66 euros more than in 2023 to afford banking services. For larger customers, this increase reaches 207 euros on average.
Bitcoin, electronic cash to the rescue?
The change in bank rates shows to what extent payments and associated services are at the heart of our daily lives. However, there is little way to influence the prices of banking players. The latter decide arbitrarily and benefit without counter-power from theone of the most lucrative industries in the world. And when paying becomes more and more expensive, the consumer has no choice but to accept it.
Faced with this observation, bitcoin may have its cards to play. Since its creation in 2009, BTC has in fact been built on resentment towards banks. Their involvement in the 2008 financial crisis has greatly damaged the reputation of an entire industry. Their rescue by public money will also inspire Satoshi Nakamoto: he registers in the first block an explicit reference to this episode. Because before being a speculative asset, bitcoin is above all a peer-to-peer payment method without intermediary. In any case, that’s his initial promise.
Scalability limits
The fact remains that BTC cannot completely replace traditional payment networks. The bitcoin protocol has never really succeeded in optimizing its scaling without giving ground to the security or decentralization of its network: this is the famous “trilemma” of the blockchain. Increasing network scale without increasing network costs therefore becomes impossible.
Just like bitcoin, the banking industry requires large amounts of energy to operate. Some estimates report several thousand TWh per year to operate this complex system, the impact of which has never really been measured. Still in development, bitcoin is relatively limited in the number of transactions it can process. The network can only process up to 7 transactions per second (TPS) with a block generation time of ten minutes. A figure which tends to make bitcoin a digital gold 2.0, rather than an efficient means of payment. This is the eternal debate that has driven discussions within the bitcoin community since 2009.
The Lightning Network to the rescue of bitcoin
However, recent developments in Lightning Network could reshuffle the cards in the battle of online and physical payments. This second layer of blockchain (layer-2) works in optimizing transactions. By bringing them together in common “packets”, the LN makes it possible to increase to more than 1 million TPS, without sacrificing security or the initial decentralization of the network. In comparison, the Visa network can process up to 24,000 transactions per second. So, paying for your baguette or coffee in BTC becomes possible, with zero fees instantly and above all, without the need for a bank account. Many businesses are trying this method around the world, as is the case with this restaurant in Finland:
Should we boycott banks and their constantly increasing fees for the benefit of bitcoin? Although this solution does not yet seem very popular, more and more individuals and merchants are looking for alternatives to a monopoly that is not always beneficial for consumers. But despite the encouraging development of Lightning Networkbitcoin will probably never replace traditional solutions, which have also demonstrated a certain effectiveness in the management of transactions and banking services.
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