Bitcoin Forum

Well, I guess we have arrived at the point where banks are feeling the hot breath of Bitcoin...
Today I received a letter from one of the more larger and well known Belgian banks.(general mail, not directed particular at me)

I won't bore you with all the details (2 pages long); but it wasn't a love letter to Bitcoin.

They finish their letter with (translated):

KBC advises not to invest in Bitcoin. We will summarise the many risks for you:

* Very hard to comprehend, and way to complex
* Not backed up by anything or anyone
* High volatility
* No money or gold guarantuees
* Lots of uncertain technological risks
* Very sensitive to fraud, illegal transactions & government regulation

This was a mailing that was sent out to all their investors & clients...I couldn't help but immediately think of this:
http://tapastic.com/episode/3686 (http://tapastic.com/episode/3686)

I never expected this to happen in Belgium, but it seems that the banks over here are starting to spread the FUD...

PS: full contents (in Dutch) to be seen here:
http://pastebin.com/Cj5nTjDa

Translation: We don't mind if you invest into some high-risk asset that you don't fully understand, but we want you to perform your investment through us because otherwise we don't profit from it.

Onkel Paul

It is so much FUD, it reads like a parody :D

That is pretty funny when you consider each point they made...against the USD, or pretty much any other fiat currency for that matter.  

In a contest , I think bitcoin compared to USD against the bullet points they made: bitcoin edges them out.

The hard to understand point is close though.  I'm not a great explainer.  And I don't think I have had much describing to folks I talk to about either a) how bitcoin works (even though I know the subject well, still a bit a difficult to succinctly lay out with out many technical terms      or   b) how currency is created from two entities buying stuff they made up from one another, at interest, out of thin air, that is based on nothing, and how each countries' currency in the global economy is pegged against that one.    

I think A) is easier to explain but it is close .

Let's do a quick comparison here with Bitcoin (A) and USD (B)

* Very hard to comprehend, and way to complex
-see above
* Not backed up by anything or anyone
-bitcoin) backed up by its ability to resist counterfeit  (imho)
-usd)
* High volatility
-bitcoin) experiencing unbelievable growth due to its intelligent design
-usd) well nothing is going to be that volatile if everything is pegged against it,
* No money or gold guarantees
-bitcoin) exchangeable for either ,anywhere on the globe, in moments, due to technology
-usd)  used to be exchangable for gold at any bank.  until the banking industry had this repelled. now there is no backing, except the threat of violence. which isn't a great thing to base currency on from a sociological or humanistic perspective.  
* Lots of uncertain technological risks
-bitcoin) open source code, any of the millions who use it can see the code and if they find flaws, work to bring them to attention
-usd) their are a great deal of uncertain technological risks when the vast majority of created currency only exists as numbers in alternate ledgers. i.e there is no 'ultimate ledger' for money, and most of it exists in computer banks.  if you are a bank with 1/5th of the worlds currency and you magically gave yourself 10$ million this would be incredibly, maybe impossible, to detect, if you had the control and know-how .  not to mention the other inherent electronic weaknesses of old currency, credit cards are not a secure system and prone to abuse
* Very sensitive to fraud, illegal transactions & government regulation
-bitcoin) public block chain record system
-usd)  can be counterfeited.  often used for fraud, bribes, and illegal transactions. countless examples, but HSBC's huge drug cartel money laundering comes to mind.   how about government regulation? when your economic policy is not dictated from elected officials but instead employees of Goldman Sachs, you have a problem. this is becoming more and more obvious and will continue to do so, because the problems behind this are too huge to miss.


On further consideration, stuff like this from the banks scares me a bit. Because so many people seem to believe this lies about fiat currencies, even when they logically know that they are incorrect or that the system is broken.  It is so ingrained though that to even consider it being incorrect is unfathomable. It's like some sort of odd, logical/emotional dissonance

Perhaps you should write back to them and ask why they are telling deliberate lies. And then add, "Oh sorry, forgot for a moment that you're a bank." Also mention that there are legal repercussions under European law surrounding abuse of truth in advertising.

 ;D i want bore with details ... thanks for the original letter.  8)

Actual source:
https://multimediafiles.kbcgroup.eu/ng/published/KBC/PDF/Bitcoins_NL.pdf

Found at:
https://privatebanking.kbc.be/nl/bitcoins-speculatief-en-dus-te-riskant

Meh, seems each bank is just copying the other.
Last vain attempt to survive.

The list you post is providing correct information regarding investments in BTC. Why are you calling this FUD?

They are not telling lies. Every item in the list is correct.

The list you post is providing correct infomation regarding investments in BTC. Why are you calling this FUD?
[/quote]

Because it is precisely FUD. these banks wildy invested their client's money in worthless derivatives and now they are spouting b.s. because they can't make money out of something. Bitcoins is backed by nothing.... yeah, except mathematics.

English version:
https://multimediafiles.kbcgroup.eu/ng/published/KBC/PDF/Bitcoins_EN.pdf

True, but since this was sent out I have received numerous messages / calls from friends and family (who know I'm into BTC) that are telling me:
"OMG OMG SEE! EVEN THE BANKS ARE WARNING YOU! I TOLD YOU SO!"

Every story has two or more sides to it; but here they deliberately target some unaware / uneducated (in regards to BTC, that is) mass to deliver some kind of proactive strike. The only upside to this is that the people who received this will maybe, just maybe, think for themselves and do the proper research. (and make up their own mind instead of blindly following the banks' communiqué)

Thanks for this!

No, that is not FUD. That was not published in any specific venue to spread fear, uncertainty and despair. Assuming you are telling the truth, that is just a mail to alert people about the inherent risks of virtual currencies. Moreover, not all banks invest their client's funds in derivatives.

No, Bitcoin is not "backed" by mathematics. Perhaps you do not know what are you talking about?

Thank you. I advise everyone which is still learning about Bitcoin to read carefully the above document.

Be aware of risks when dealing with BTC.

 8)

Sometimes I feel I speaking with bricks in a wall. That remind me of Pink Floyd.

Right, it was not published in any venue... Er yes it was. Perhaps you don't understand either mathematics or English.

No, Bitcoin is not "backed" by mathematics. Perhaps you do not know what are you talking about?

Why do they call it a crypto currency?

Right, so now the USD is backed by the government, I can redeem it with what exactly? Politicians? It is a meaningless concept and has no bearing on the real "value" of the Usd. Bitcoins' "integrity" is backed by mathematics. The value can vary drastically but one bitcoin will always equal one bitcoin. And that is backed by mathematics.

Dont waste time on conservative bankers  ;D

???

USD is backed by the full productivity of a multi-trillion dollar economy and its people. Yes, it boils down to a promise by a nation to provide value for the notes it issues, which necessarily requires trust, but that's an entirely different thing from Bitcoin, which isn't backed by anything (meaning if the system breaks there's nothing and no-one to say, "here, take this gold/wood/labour/Coke-a-cola instead").

I'm sorry but that is nonsense. Have you heard of Zimbabwe? Weimar?

In which venue that was published solely to spread fear, uncertainty and despair? Yes, perhaps I do not understand mathematics or English. So, explain to me, what is the "mathematics" backing Bitcoin?

Because "they" are misinformed. It is not really a "cryptographic currency".

If fiat was backed and limited to the supply of gold the world would not be in the mess it is now.

BTC 21,000,000 limit is what will give it strength.

We would also have never had a thing called the industrial revolution.

Holy fuck, given the intellectual depth of your comments so far, I would live to hear the reasoning behind this gem.

The only thing that backs Bitcoin is the same thing that backs the fiat currencies, stocks and bonds, and anything else. It is the value that people place on it.

Bitcoin has expanded by virtue of what the people think, in 5 years, so that it is becoming a threat to the fiat currencies, currencies that have been around for as long as hundreds of years. It all has to do with what the people think. And what the people think has to do with what the banks and governments have trained them to think. Now it is starting to backfire on the banks and governments through Bitcoin.

:)

The USD is backed by 50 million pensioners and 30 million under employed people   :-\

Nope, there is a whole legal/financial/governmental/military structure backing fiat currency. There is nothing like that backing BTC. By the way, stocks and bonds do not have exactly the value that people place on it. It is not a financial instrument which value is defined only by speculation.

Stocks and bonds are "backed" by the dividend/coupon streams they're expected to pay out. Obviously many companies don't pay dividends, choosing instead to invest their profits back into the business at higher ROI than most shareholders could deploy capital, but they're *eventually* expected to produce a cash-stream to shareholders.

But obviously stocks/bonds are not the valid comparison. Non-producing assets like fiat-cash or gold/silver are more apt comparisons to bitcoin. To say that either is "backed" by anything is silly. I see the point about "legal/financial/governmental/military structure" backing dollars, but that's really just a way of defining the infrastructure you're putting your trust in. With bitcoin, that infrastructure is miners, the cryptography, the internet, peer-to-peer protocols, etc. What the upside and downside risks are for each, is totally another issue.

Actually, it IS the value that people place on all these things. However, it isn't always direct value.

We wouldn't have a military if people didn't place trust in government officials to provide a military. So, indirectly, it is the value that people place on the military.

Now that people can see more and more how the banks and government and the military are NOT doing what they want, the people are turning to Bitcoin to overcome the problems that they see in the system.

It all has to do with the value people place on everything.

:)

actually i think most if not all the things they say are true.... they are certain risks that one should be aware of when making an investment.

it's a shame they fail to point out any of the positives or maybe dont even understand them.

it is true though that bitcoin can be a risky investment in terms of many other types of investments.  however those of us who understand the tech behind it and the improvements it brings in things like transactions tend to understand the full picture more and we typically see that the potential outweighs the current risks,  these risks should be talked about though and improve upon.

the ceo of circle gave a speech about this recently that instead of trying to ignore these risks or write them off as "anti bitcoin propaganda" we need to realize that a lot of these risks are valid and we need to working on finding solutions and or explaining to people how long term these risks should tend to fade away as the infrastructure and industry grows.


when talking about bitcoins to strangers/friends/family/etc etc  i always try to be honest about any of the risks or concerns they have, and instead of simply saying "oh thats nonsense dont worry!"  i explain WHY i think the potential still outweighs the risks and how/why these risks will be overcome. ive noticed people typically people have a better response to bitcoin when i'm more honest like that instead of just saying 'oh dont worry its just bank propaganda, the government hates bitcoin they dont want you to know' etc etc.

Please, stop with this bullshit. There are billions of people very happy with their respective fiat currencies. No one is coming after BTC to "overcome the problems that they see in the system". The majority of people come after BTC to make money and speculate.

I believe you haven't got a good perspective of the users neither on the state of banking.

I started out as a speculator (I understand that most people start out like this), but I quickly realized how to use bitcoin to make my finances more efficient and a lot cheaper.

As for people happy with (any) fiat? The older generation experienced how all the fiat slowly degrades to shit and they are far from happy. Younger generations are facing the never ending recession and a lot of them live without any perspective for the future.

People who do more than receiving their salary on a bank account also don't seem to be happy at all. I have experience with banking in several countries and in my experience, the main attributes of the old system are inefficiency, inconvenience and high fees and charges.

Bitcoin is the first alternative, with a completely new concept on money. I think it doesn't matter what % are speculators, it cannot affect the utility of the protocol. I don't think they are any ways harmful at this early stage either.

Again, it isn't always what the people are doing directly. It's what they are trusting the governments to do. Once the governments do what they do, the people will fall in line, if they like it. See my fourth post at https://bitcointalk.org/index.php?topic=438564.new#new, post #11 if nobody deletes any of their posts.

:)

There is nothing cheaper when dealing with a high volatile medium of exchange such as BTC.


Bitcoin do not solve that problem...


...neither this problem.


Finally, some sense. Yes, agreed.

Ergo, don't use Bitcoin because it's not a form of electronic money to purchase eBooks, for they're not a form of real books. Also, don't pay for pay-for-view concerts with any currency, for they, too, are not real concerts.

The following is NOT a real goat:

http://upload.wikimedia.org/wikipedia/commons/thumb/b/b2/Hausziege_04.jpg/384px-Hausziege_04.jpg
"I see what you did there!" <not a real quote>

Lot of unfounded statements. Particularly about the US being such a large economy, which it is not. (Economy in the sense of production not virtual numbers). It does have a astronomical debt system backed by the promise of oil for dollars (but even that promise has almost lost it's meaning). Unfortunately even if all the oil that's left on the planet could be extracted for free, that still wouldn't be enough to fill the giant debt hole that has been created.

No fiat-system in history has survived, not a single one, and there is no fiat system that has existed for hundred(s) of years.

Fiat is a ponzi scheme, it isn't even backed by shit. And the latter is what all the insurances of the state and banks will mean, when this currently just over 40 years old petrol-dollar experiment inevitably fails. It managed to postpone the official bankruptcy of America after the Vietnam war and combined with fractional reserve banking has created this guaranteed irrecoverable global trainwreck.

"Billions of people very happy with their respective fiat", are you freaking serious? Billions eh? Perfectly happy as well. Even as a joke that remark wouldn't even be funny. Well at least you make perfectly clear where you are coming from.

Btw I don't believe "money" should be worth anything at all. We just need a practical means of exchange for human effort and bitcoin is pretty damn good when compared to everything that is currently available.

Good points, and I agree with them all.

What is money? Here is what money is, nothing more and nothing less: Money is the stored up labor of the people. In the short term, the act of exchanging money is what causes the various forms of labor to increase or decrease in value with relation to other forms of labor. Money itself is simply stored up labor.

:)

There is more at play than just the points in the list, considering their own position a few years back, it's strange they can truthfully warn about bitcoin's risks now "tout court"
Is it not FUD when they mean to cause FUD, regardless of the words used?


lol treat them to some pizza or maybe top up their mobile vikings account with bitcoin

remember the basta episode about  belgian banks?

Maybe not lies but certainly spreading FUD.

i believe this is simply translated as:

"we want to scare you away from bitcoin for atleast 5 years, to allow us to buy the cheap coins, then i 5 years we will sell them to you at 500 times the price"

The banks do not need to do that in order to buy cheap BTC. If they can create they own virtual currency, why would they even care to waste money speculating with BTC? They can create they own speculative instrument for few dollars.

btc foundation should issue warnings about fiat on regular basis  ;D

Funny people, Belgians. I happen to know, because I'm Dutch. BTW here is a great Belgian professor quoting Henry Ford about money:

http://www.youtube.com/watch?v=Z9Tj3bMGkhg (http://www.youtube.com/watch?v=Z9Tj3bMGkhg)

The D in FUD stands for Doubt.

Speak for yourself. Plenty of people understand that bitcoin represents an experiment in a perfect-information non-manipulable money supply, in contrast to the world's 40yr experiment with infinitely manipulable fiat money. Many people *accept* the reality and utility of fiat currency in their daily lives while also recognizing the reality of long-term inflation in fiat, and the very unstable debt-dynamics it can create.

And there are myriad other reasons people come to bitcoin, including:
1) Fascinating technology
2) Easier, more frictionless, way to transact
3) Far more secure way to move value around the internet
4) Mining as a hobby for the sheer fascination of it all
5) Bitcoin2 ("programmable money") ideas

People can latch on to any of the above, and more, as the primary reason they're interested in bitcoin. And yes, many people who initially found value in bitcoin due to one of the above ideas realized the investment potential and took (or are taking) advantage of that. That's only natural, and a healthy part of the process.

Buzzwords everywhere.

"Non-manipulable money supply", what a joke. Do you think the supply of BTC cannot be manipulated? How naive you are?


1. ...and very complex to understand completely.
2. ..., but very illiquid.
3. ... with a high risk to have a loss or be victim of a fraudulent scheme.
4. ..., which includes to waste electricity and heating only for the sake to produce some random SHA-256 numbers (much excitement, bro!)
5.  ???


OK, agreed. But my point still stands, most of the above is only seen as advantage to speculate.

Ok, thanks for the correction.

There may be all that but there is clearly not the will/power/intention to stop printing billions upon billions, each and every day, for no other reason that it's possible and people don't understand the consequences.

Now the world is in a currency war and there are winners and losers, making many people, companies and countries unhappy.

+1

lol who would even take banks seriously the inevitable is near bitcoin will win the currency war.