Bitcoin Forum

I had a most interesting discussion with a investment banker today.

I asked him the question... "Do you see Bitcoin as a disruptive technology or a threat to the traditional banking system"

His answer {Most arrogantly} ....We do not consider Bitcoin as a "real" currency.  :o

I then asked him to define a currency in his opinion ...and he said ..." a system of money in general use in a particular country "

I then told him...Bitcoin is a global currency... He then replied.. "But nobody use it"  ;D ;D

They are clearly in the "Let's ignore it" phase of the disruption cycle... When they wake up... it will be to late to change.  ;D

The typical confusion between currency and legal tender.

But by a banker? Careful with your money...

Sometimes, when you listen to bankers ignorance about Bitcoin, don't you just wonder "How did a baboon such as you get into banking?" On the positive side, the longer they can ignore Bitcoin, the longer we'll have to make them jobless . So it's a Win Win situations ;D

electricity have no tangible value
gaz have no tangible value
air have no tangible value
bitcoin have no tangible value

but all of this things ... cost a lot of a life.

so ... what ?
it's real for a part of people.

and that's good.

"No-one" has sure as hell been sending alot of transactions, although presumably this non-entity was sending these funds to their non-existent self

He's right Bitcoin is not a "real" currency. It's far better than fiat currency and it's Crypto Currency.
You can't proove the money flow on illegal activities if they've used fiat in cash form.
But You can see even satoshi's transactions from the begining.

His friend, did not want to believe me, when I told him that Bitcoin is currently sold for +/- $250 and it sold for +$1000 a while ago.

I had to go onto the internet and prove to him that it actually sells for that amount.... {He looked interested... but the banker stayed arrogant... with a superior attitude}

I was amazed at how very little they cared to learn more about this technology.

Banker=Bankster
Banker= ignorant fools

Ask your Banker again in a few years. I bet he will have changed his mind.

well, if you tell someone about gold coin ... it don't care, too.

because nothing of educated people see the INFLATION (less pound for the same price).

the first thing for bitcoin is to protect against this.

but it's complicated to explain at people ... at the first time.
because, they don't want to trust this (more tax, morecost, less money).

If that is his logic that Bitcoin isn't a real currency...then he should actually look at the fact that money in reality holds on real value as well...it is only dictated by the government and how people use it. Cause at the end of the day it is nothing but a piece of paper with ink on it.

Typical bakster. Only sees in front of him, and not around... So it is an expected answer!

These guys fear Bitcoin as a disruptive tech, so they want nothing to do with it! :D

I quite agree with that. BTC isn't a real currency, but it's definitely disruptive technology, and a threat to the traditional banking system, albeit a small one at this stage.

He is right - nobody is using Bitcoin.  We have estimates from the FRB, ECB and Jeffrey Robinson which indicates the user base is under 250,000.  Schmucks like Coinbase and previously MtGox loved to claim "millions" but addresses =/= unique human users and most of their addresses are empty.  Risto Pietila, here on Bitcointalk, has spent countless hours analyzing Bitcoin's adoption.


If this was any other industry or the tech sector then Bitcoin would be considered a fail.  A fail in the sense that if it couldn't attain the proof of concept (viral adoption) over 6 years and it probably never well. 

In the mean time - Whatsapp is newer than Bitcoin and it has attained 600 million users.  Even Telegram app is 2 years old and has 50 million users.

Inb4 "Digital Currency is new" - blockchain might be new but that is about it.  We had older stuff like eGold and older predecessors and it goes back to the 1990s.  Even estimates indicate that eGold was bigger than BTC in both capitalization and users but it wasn't really covered as much in the media.   

Bitcoin got a lot of attention because it made a lot of random people millionaires.  Whereas, nobody got rich off eGold except for the scammers and hackers.  The media loves that rags to riches story..

Block size is still 1 MB.

Bitcoin is still an experiment. I think it would be very risky to achieve an adoption at WhatsApp, CandyCrush or even Telegram levels at this moment. Also, all these platforms are centralized.

Even more, Bitcoin is not just an end-consumer product. To being functional as everyday money, it needs to be accepted by merchants. And this is a slow proccess. It doesn't have commercials on TV. It doesn't have the "hey, I'm using it and you should use too".

Just to compare, even debit and credit cards still didn't get an universal adoption. Here in South America, there are a lot of informal and formal places which don't accept them, they only work with physical cash.

I'm of the belief that bankers are the last ones you want to wake up... let them dream of little money printing trees... sleep well my friends.

Not all of the bankers are ignorant.
https://bitcoinmagazine.com/19864/ubs-open-blockchain-innovation-lab-london/

fiat money are not real currency either, because a real currency should not lose its value over time

also a true currency must not be necessarily a tangible thing, digital one are considered true currency in the same way

so no, bitcoin is a true currency much more than any fiat

You should have asked him (do it next time without fail) how it happened that gold is still considered a global currency, though no one actually uses it in everyday transactions. If he says that gold isn't by any means a global currency either, then ask him how come that central banks of most developed countries are still hoarding it?

Time will come when he will realise Bitcoin is the first real money in history.

I can see where he's hung up on the "general use" issue.

Just as I can't pick up a pebble and trade it among my friends and say its a currency since it's not generally accepted as such, Bitcoin as a global currency might not be there quite yet; with 7 billion and change people on the planet, less than a million people using it, it's not exactly at saturation point. That's not to say it won't be in the future, nor that bankers aren't watching it, but as far as general use, I don't think any of us can argue its reached that point yet.

What are bAnkers missing by not recognizing it yet, though?

Should they offer Btc denominated accounts, or something?

Anything can be real money as long as people see value in it, paper cash itself is almost worthless its about the trust regarding this paper, you can use something else instead like bitcoin, if people value it and use it as means of exchange then it's real money, whether its cash, bitcoin, shells or rocks doesn't matter. These bankers are damn retarded or scared, bitcoin is coming no matter what.

Well, did its acceptance actually increase in the last year? Bitcoin has inherent deficiencies (due to its decentralized nature primarily) which don't make it very convenient for casual expenditures (actually far from it). So, in a sense, that banker is right that bitcoin is not a true currency, since it doesn't circulate as real monies should do...

Acceptance did increase, it doesn't have to circulate like fiat to be real money, i can order food and get it delivered with bitcoin, to me bitcoin is real money.

To you it's real money. To me it's somethjng that's potentially valuable. But the banker wants to see more in the way of trabsacting before he considers it a "currency".

My real question is, with so many of us declaring Bitcoin to be the end of banks, what does his opinion matter? What could he or his employer do differently if they thought it was a "real" currency versus not?

I mean, I've suggested in the future that banks could offer safekeeping services in the form if BTC denominated deposit accounts for people who dint feel they're capable of securely holding their coins themselves, but that suggestion is laughed off as out of hand if not derided altogether...

So if we won't give btc too banks to hold or to lend, their primary businesses, what does their opinion matter?

Bingo, somebody talking sense.

There are LOTS of people that work in banks, that are void of the knowledge required to be useful in the future that is coming. Alot of them, don't even understand how computers work, how would you expect somebody as impotent as that to grasp the full potential of something as beautiful as bitcoin?

They are stupid, and whether or not they are aware of their own stupidity doesn't really matter, because in the end, people like that are the ones which will be phased out in the global economic future, and rightfully so because there are too many idiots living and breathing in this world which DO NOT BELONG.

I use it and have made money off of it.

RFOL.  The smug is strong with this one

Hahahah theres nobody use it ? If he only knows that all over a million using bitcoins. And also the million users that have been helped by the bitcoin.

That investment banker, how old was he? You gotta understand most ex jp morgan people already started their own private funds to start a private mining company of their own.

eg: cucumber mining

If you do a search and read some threads, the coins that were bought from auction for silkroad coins links to something interesting lol.

Besides, thats only one investment banker and that also tells you that even though he has the title, I repeat title as a, "investment banker".  It doesnt tell you that he knows the difference of what currency really means - fiat : means trust, which is what most are already have been doing for bitcoin lol.

His argument would be in a constructive way, I would say would be how can you compete with a how many year old paper vs this digital currency.

BTC denominated accounts won't be a reality until there is regulatory clarity.
Banks have huge compliance departments and try to end on the right side of the law (although they do pay huge fines now and then).
There will be a lot of questions raised - will these deposits be insured, who will insure them, etc.

But if regulations come into existence for Bitcoins, there won't be any room left for decentralization I guess, and most importantly, there won't be any anonymity which we are here for...

These people has been too long in the current fiat banking system so you would expect what their responses would be. You will be surprised what they say will be basically follow everything by the book and word by word. I don't think you will even need to sell them the idea about bitcoin, it will be up to them to realize it one day.

They not believing in bitcoin because they never use it and they not know about it so dont expect that they will consider it as a currency because they only know is their country currency .

in a decentralization system security should be automatized(don't know how can you that now, but there must be a way...), with no maintenance ever by any human, a fully automatized system that can also preserve anonymity

There are many bad investment bankers out there and only a few good ones. He definetly belongs to the group of bad investment bankers. Talk to someone who sees the entire picture of the future's currency system and he would not argue like your guy did.

Investment bankers smell money. Once there is serious money to be made in Bitcoin, I am sure investment bankers will be attracted in droves. It doesn't matter if they have spent their whole life in the fiat banking system; they will still be eager to sell packaged bitcoin derivatives.

To answer some of the questions posted here...

He is still young... 47 {Most of these guys are a lot older} and he is highly educated. His whole family work in the banking sector for ages.

I think it's more a question of scale.... {In Banking terms... Bitcoin is still relatively small, if you compare it to other currencies .... transaction volumes etc}

I took it a step further, and discussed it with a friends wife...She is a branch manager for a local bank. {She has no clue, what Bitcoin is, and they only deal with what is approved by the Government/Reserve Banks and their shareholders}

She was interrested in the "low fees" structure of Bitcoins and wanted to promote their latest "low fee" option on saving accounts to me. {Obviously, I was not interrested}

They are simply ignorant and more interrested on how they can make more profit, from using some similar technology that is not patented. {The disruption will come quickly, whilst they are sleeping}

You have to pay a fee on a saving account? Next, if they are ignorant they won't see that if they try to use similar technology, no one will use it since they would have to make it decentralized which, in the first place, they will never do, and, in the second, if they nevertheless do, there is already tough competition there. So the end result is quite predictable in any case...

what did the kodak people say when photography became digital ?  :D

Yup. There are fees on savings accounts, but these are waived if you maintain a minimum balance.

The traditional banking model is built on a set of assumptions which Bitcoin has challenged. The entities which develop in the Bitcoin space will have an altogether different business model.

Fucking great analogy!

But if I remember well, it was Kodak who created the technologies behind digital protography.

I love it when an expert tells me bitcoin is not a currency because no one uses it. Even though I use it all the time.

Kodak is a good example of institutional blindness. As is Blockbuster video or any bookstore. These people build their whole world around an idea, then can't imagine the world moving on to a better idea. I think the banking business is poised for an even greater fall with bitcoin. They have NEVER had to face competition like this before and seem totally unprepared for it. Instead choosing to ignore reality and say stupid things like its not "real".

In my opinion, any currency should have a legal backing by the respective country by the equivalent amount of Gold in it's reserve. What do you say? Is it correct or not?

We've already been there. After 1944 the US dollar had been allegedly backed up by gold till Nixon Shock. And many countries were on the gold standard even before that (I mean before the First World War). Didn't end very well, though...

So you see, Bitcoin is and will be a virtual currency till someone or some country start backing it by some physical property like Gold, land, or any other kind of asset which has a real value in the market.

Who says Bitcoin isn't physically available???
Can't it be backed by those physical coins itself???
They too have a value after storing private keys in them, so why to go for something else instead BTC itself to back the virtual currency???

But why would they, given they don't have control over the blockchain? If they don't back up the currency they happen to emit by anything other than law and power, I think it is highly unlikely anyone would ever be going to back up bitcoin. It just doesn't make sense since it is already in a sense backed up by its blockchain...