Bitcoin Forum

Banks all across the globe share a similar interest in making money; disregard the pathetic services they provide; if it doesn't involve money, they wouldn't offer it; everything must be profitable, even if it appears that they are assisting people.
Bitcoin and banks both have the power to transfer money from one person to another, but Bitcoin provides for people's needs without considering itself, unlike banks, which do so constantly.

I've been contemplating how little the general public knows about bitcoin and banking. They don't realize that bitcoin operates on a double standard and will do anything a bank could do without asking for permission, whereas banks will require you to present identification documents dating back to your birth in order to use their services.

When you examine these two institutions, you will find that bitcoin is more appealing than banks, even if some people believe that banks and bitcoin must coexist for acceptance. The observations include the following:

(1) Borderless transactions: Have you ever thought about sending money to someone in another country? Have you gone through the procedure of transferring money to another country? It takes at least 48 hours in every country. Other neighboring countries may speed up bank transactions, but two odd countries/continents need time before payment. Here is where bitcoin comes in; you don't have to register, you don't need any application to carry out any transaction; all you need is your private key to sign that transaction, it goes through miners, and you're done without any interruption or questioning.

(2) Excess fees on transactions: Banks charge you for transactions, and the government charges you for using banks. For example, in my country, we pay VAT(known as Value added Tax) when a transaction exceeds a certain threshold, and you will be charged for that transaction. This is what the government and banks do to people, whereas Bitcoin is free. Transaction fees vary depending on how busy the network is; you may pay as little as a cent when the mempool is nearly empty.

(3) Extra charges for bank notifications: I'm not sure if banks in other countries provide similar choices, but when you enroll for transaction notifications, you will be charged for SMS and email messages. Assume we have to pay some sats to use bitcoin explorer; everything else, apart from the transaction fee is free with Bitcoin, and that is the freedom of using it.

(4) Banks Network Failure: I can relate to this very well because, before the election season in my country, practically all of the banks experienced failure, making it impossible to use mobile banking and transmit transactions across states. Many shifted to bitcoin and USD as an alternative since there is no middleman or point of failure with bitcoin.

(5) Banks' freezing of accounts and limitations: You wouldn't understand if your account had never been frozen before. Banks can make life difficult; you might lose everything if you fail to read their terms and conditions, and there is nothing you can do except follow due procedure; this is what happens when there is a middleman on any platform. Bitcoin overcomes this limitation by granting no constraints to your wallets; you may spend as much as you like and no one can penalize your account because you possess the private key.

There have been lots of issues with banks in the past, although this varies depending on where you live, but they all have similar objectives and people fail to check into these things, this is what bitcoin provides you without any constraints or limitations.

Heavily depends on country and banks. In my country banks usually have zero fees when doing transactions with other customers of the bank, and 0.5% to other banks inside the country. This is through Visa, if using direct bank transfers the fee is 0.5-1% but capped at $15 max, so you won't pay thousands if you send millions.

Bitcoin on the other hand can have pretty high fees on mainnet sometimes. And there's not much you can do about it.


My banks have apps and send notifications from there, or they send notifications for free through messengers.

These features are surely not overlooked here on the forum. Bitcoin has so many qualities which makes it unique, with the top for me being that you function effectively as your own bank.
You can set up your branch when you want and send transactions once you have some bitcoins in your balance without having to trust any third party.

Banks are an integral part of our society at this time and any there financial institution must coexist with it.

setting up an personal savings account just to store value
bank:
name
two proofs of ID,
questions about income
national social security number

bitcoin
install software.
generate a bitcoin address

---

setting up a family trust fund
bank:
several meetings with bank manager
several meetings with a solicitor/lawyer
name (multiplied by how many family members involved)
two proofs of ID, (multiplied by how many family members involved)
questions about income (multiplied by how many family members involved)
national social security number (multiplied by how many family members involved)
all family need to attend to sign involvement

bitcoin:
install software
generate multiple addresses
create a multisig address
give family each key

---

setting up an BUSINESS account just receive funds from customers
bank:
personal name
two proofs of ID,
questions about business income
national social security number
tax reference
business plan
proof of any licencing requirements
insurance references

bitcoin
install software.
generate a bitcoin address

International bank transfers do not always take 48 hours and some can be made in hours if you use the fast payments that a lot of European countries use but it does cost more then a transfer in your country and I think that is why Bitcoin is better for this example. Bitcoin does not cost more if you need to send it to someone living next to you or if someone is living across the world from you.

I have not heard of banks charging for notifications usually they notify you for free on their banking apps but Bitcoin does not notify you unless you check the address yourself which you can do with a bank so I do not think there is a benefit to Bitcoin in this example you have posted.

I don't think anyone in Bitcoin overlooks that stuff. Those are the things we all know about which are just some of the reasons Bitcoin is better than the banking system.

Do people who are actually using or looking to use Bitcoin really overlook things like lower fees, the immutability and accessibility of the network and instant non-premium border-less transactions? I would think that these are some of the most popular things that drive people toward using it. One thing I can agree with, is the accounts and limitations that are overlooked. If this aspect was not overlooked, everyone would use their own self-custody wallets and the effects of exchanges/services going under or running away with coins would be much less. A new campaign more effective than "not your keys, not your coins" needs to be created to also include the banks while putting them next to exchanges, with a push to self-custody solutions.

And bank statements?

Some bank even charges for that, especially when one tries to generate many bank statements beyond the 1 or 2 free statements per year. Where's for Bitcoin you just have to go to through your wallet software's transaction history or blockchain explorer.

Also, people complain about Bitcoin transaction fees being expensive at times, but I have never seen a bank that can charge less than a dollar in transaction fees for $500,000 transfer across the borders

Not entirely correct, when you want to transfer your coins from centralized exchange to other exchange or wallet, you will get charged higher fee like $10 even though based on the mempool you're only need to pay for $1 with the same speed. So make sure you're need to hold on your non custodial wallet and use reputable P2P platform in order to prevent from the centralized exchange ask for additional fee to proceed your transactions.

It is true that there are aspects of Bitcoin that make it appear superior to traditional banking platforms, such as much lower fees, borderless payments, decentralization, etc. But even so, Bitcoin cannot completely replace the role of banking in society, because until now many aspects of our lives still require traditional banking. Precisely compared to saying "more superior" I agree more that Bitcoin complements the current global financial system and makes innovation in the financial sector faster, for example in the past traditional banking platforms seemed reluctant to innovate their systems and switch to digital, but now there are many banking platforms that launch digitalized systems to make it easier for their customers and even now central banks are already planning to launch their CBDC and this is all thanks to the presence of Bitcoin and Altcoins which accelerate innovation in the global financial sector.

This is correct, but I don't think this is overlooked. It's just that many are not anymore comparing Bitcoin and banks. Many are drawn to Bitcoin not because it provides them the opportunity to be their own banks but because it provides them the opportunity to make money.

If there are people who overlooked this, they are the ones who embraced Bitcoin but also embraced centralized platforms at the same time. To a centralized exchange, for example, there are surely borders; there's in fact a list of blacklisted countries. There's censorship. There are also excessive fees on transactions. There are extra charges. There is also the possibility of a system failure. And then there's also the freezing of accounts and numerous limitations. There's also locking and confiscation of funds.

These two issues are my top priorities, particularly during this election and the current phase of Nigeria's cashless policy.

Bitcoin is currently the best option because, once you have an adequate network, you can aid your transaction without any abstraction and restrictions. This is because, even with Bank apps that are supposed to make transactions as quick as possible, banks networks became very slow. This has even caused problems when trying to sell cryptocurrency for fiat using some exchange p2p transactions because the seller will not receive alert early to release cryptocurrency to the buyer.

You're right that many people are attracted to Bitcoin because it offers them the opportunity to make money, but that doesn't mean they aren't comparing themselves to the banks.  Indeed, many people are using Bitcoin as an alternative form of investment and are comparing the returns of Bitcoin with those of traditional banks.

Personally, however, I advise against approaching Bitcoin as a form of investment but rather as a free form of payment.

To me, the most important thing is the last one posted and it's basically what Bitcoin was designed for, so not putting that one first is pretty weird


That's the main advantage, the rest you listed are somewhat meh, depend a lot on the country you're from!
Taking one by one, let's be honest there are billions living their entire life without making an international payment, in EU you have instant bank transfers, no VAT payable over a certain amount, and right here I'm actually curious about what country you're from since I've never heard that before.

That aside, there is one funny thing also:
This is actually false, you can't pay less than 3 cents, cause the smallest transaction even at 1sat/b fee is ‎111 vB so, so almost 3 cents.


Common, this world is full of people who do monthly international payments of over $500 000, let's be realistic on this, less than 0.1% care abotu that and more care about how much they pay for a loaf of bread.

I am surprised to hear this one. I never heard about down time in any bank server ever but there could be some cases as happened with you. I love bitcoin and that's why I am here today but it does not mean we can just let down the banking system and its infra just like that. I mean we gotta say the engineering behind the banking system is slit, and it really maintains heavy load on it's server all the time. The real time gross settlements to automated clearing house, everything works in synchronization even after all the billion peoples are using it at the same time.

However, in case of Bitcoin, that kind of scalability issue remains till today. Now I dont want anyone to tell me we have lightening network and shit, that's actually bad excuse one can get over and over again.

We know very well how congested the networks were back in 2017. Its horrible management. Hope so we compete soon though its not a race of any kind.

You can send a transaction with low fees like 3 cents but it would never confirm because the miners do not have a incentive to process the transaction and if it did it would take a very long time so I know you can include a fee of 3 cents but no one will do that because it would never confirm in time for any transaction that could be made. I think the op is misleading saying you can pay what you want because if you want it to confirm you will need to do the typical fee or just below if you can wait.

The Banking institution is not a charity institution, it is a business and the aim of every business asides providing services to customers that are satisfactory is to make profit.

From your perspective and speaking from knowledge, bitcoins present themselves as more appealing, but to other people with limited knowledge and not the same perspective with you, the bank's will still remain an option for them.

It is normal to expect charges call fees for transactions, the only problem is how these charges are becoming excessive and irregularly deducted from one's account. There are still fees that you are charged for bitcoin transactions, but they are only collected when you make a transaction, not when you have made no transactions and you are being charged a fee with a ridiculous name like the banks do.

If you go back and see what Satoshi has proposed in his whitepaper is "Peer to Peer electronic Cash transfer" and the idea is to give authority of your money in your hands. Bitcoin has rightly proved over a decade a period the core idea proposed by its founder. Bitcoin is bank whose owner is the person having the private keys to access it.
We need banks atleast for now as governments are totally relying on fiat currency. Bitcoin no doubt has its own benefits and we can use it in parallel to banking system.

I would be better if the banks did not exist because they are scams and have complete control over your money and if they decided to go bankrupt you cannot argue to get your money back you will lose it. Some countries in Europe and the US protect the money up to a certain amount but you do not get it instantly and it can take a very long time for you to be compensated for a bank going bankrupt. At least that cannot happen with Bitcoin and you have the complete control of the wallet.

Not exactly 3 cents as that transaction not only would need to be set at 1sat/b but also to have just one input and one output with no change.
But transactions at 2sat/b or 5cents in case of simple tx are getting confirmed even now, I just picked some random ones :

https://mempool.space/tx/c24fea79350b0773f4a238dfcf9d8368f12f1bc7cca135e1f5d9c4224778f80c
Fee   292 sat $0.06
https://mempool.space/tx/1e69f38f18a6f8ed3d8f6e192ab05c56eb1b0a1575ac200a15d2492b0495f319
Fee   222 sat$0.05

Anyhow, the thing is that most wallets won't let you choose a fee that is under 1 sat/b, that's the minimum relay fee set for most, so for the average Joe is impossible to even send a 1 cent fee transaction or 0.3sat/b at current rates, not speaking of it getting confirmed unless a miner makes a special case.

I would be better if the banks did not exist because they are scams and have complete control over your money and if they decided to go bankrupt you cannot argue to get your money back you will lose it. Some countries in Europe and the US protect the money up to a certain amount but you do not get it instantly and it can take a very long time for you to be compensated for a bank going bankrupt. At least that cannot happen with Bitcoin and you have the complete control of the wallet.
[/quote]

There will come a time when banks will compete to appropriate Bitcoin and I wonder what could change for that part of the population who don't know how to get a Bitcoin or some satoshi.  Then the banks will come to mediate the purchase and bitcoins will be centralized again because they will be in the cold wallets of the banks.

I'm not sure if people are actually comparing this. For me, it makes no sense. My regular savings account in the bank doesn't even give me 1% of interest per annum. That 1% could be earned with Bitcoin in just an hour. So, they're not even comparable.

Perhaps you could compare Bitcoin with stocks or bonds or gold but not returns from traditional banks. Even time deposits could only give you more or less 2% of profit in a year.


Well, this is oftentimes just hollow words. So, while I may agree with you, the reality is that everybody is talking about the price, not because it strengthens the purchasing power of Bitcoin but because it means they are making more money.

This is true, There is no bank in my country that charges a fee when making a transaction or using the service of registering for transaction notification via sms, everything is entirely free as long as the user installs the application and has an internet connection.

My bank account is not charged as OP mentioned, unless I apply for the visa service for international payments, I will have to pay a small fee to register and maintain the service. I don't know if there is a difference between countries, but in my country, there are no high transaction fees or additional fees like OP is talking about.

The financial industry is probably the strongest all around the world and it is not going to disappear no matter how much you wish for it, the truth is that there are good reasons for the financial industry to exist, it is just that they abuse their power to benefit themselves while affecting their customers.

This is why we have bitcoin, and while bitcoin is not going to be enough to make it disappear, at least it offers us an alternative we did not had before.

Also, when you deal with Banks.. you deal with people. Now as you know, it is not a pleasant experience to visit a Bank, because you are already frustrated when you had to stand in a queue at a Bank for 1 hour, before they help you.... then you have to deal with the Bank employee that are tired or in a bad mood.  ::)

The human element are removed from Bitcoin transactions, because it's all automated. You become your own Bank, so you do not need to deal with people. (or ask permission to access your wealth)  ;)

Some transactions in Banks can also be reversed... (Credit cards) ....where no transactions can be reversed with Bitcoin.  :P

You wouldn't understand the pain of owning a bank if you hadn't had one. I am now dealing with a failed transaction. I've been having issues with my Virtual Bank, also known as OPAY, after using their Card on a POS terminal. I filed a complaint, but I have yet to receive a response. I recently discovered that they svck at customer service; now tell me why I should continue with banking activities. If I had used Bitcoin in the first place, a failed transaction has a maximum of 14 days to stay in mempool, and if any miner could not verify my transaction, it would be returned to my address with no effect on my balance, but banks are simply evil institutions.

The bank has problems that sometimes make us unhappy, but if the bank disappears completely, then I don't want that to happen. Banks provide us with many services, not just depositing or transferring money. I just took a simple example that we see most often: when you need money for some work, what do you do if there is no bank to lend money to, you cannot do it with bitcoin. In general: bitcoin and banking are both useful in our lives, and I need both. There are many solutions and many options that will make our lives easier; why would we prefer to eliminate either?

While I agree with your points, there are banks that offer similar or even the exact same features. First of all, with Revolut or N26, two online banks anyone can register with, you can send money with a SEPA deposit and receive it in a few hours or one business day at most. Fees for European accounts are usually free or minimal at the very best. While some local banks here charge you for SMS notifications, mine doesn't, and neither do the two I mentioned.

On the other hand, I completely agree with the other two points; I've experienced network maintenance issues in the past and account limitations for reasons I wasn't even responsible for.

Opinions differ between those who see Bitcoin as an alternative to the banking system and those who think that both systems can work together in semi-integration, and those who think that Bitcoin can replace the entire financial system (money and banks).
In my opinion, in our current world based on centralization, each system has its advantages and disadvantages, although the banking system's disadvantages are much more than its advantages. Bitcoin can replace the role of banks as a money transfer system, via the blockchain. And in a global system governed by banks, it will not be easy to dispense with banks since it is not easy to dispense with fiat money.

This is the most important point, in my opinion. I can feel the pain of people who got their bank accounts frozen for different reasons. In Lebanon, thousands of people lost their money or got their bank accounts frozen due to many banks being declared bankrupt, even the central bank of the nation wasn't able to hold the situation. Therefore, the people there have realised the importance of a technology like the blockchain and especially Bitcoin, which resulted in a spike in crypto currency usage in Lebanon and the other countries where there are similar situations. Indeed, it's a great feeling to have full control over your money, and crypto currencies are becoming the best form of money.

I do not know how they would compete how can you convince people who like to have the freedom of not using a 3rd party to use their service when it makes it less secure. I think in the next 10 years most people will be self custody and there will be a small population that use banks to store their Bitcoin if they offer the service but I think it is more likely that people keep their money in fiat if they are prepared to use banks because they miss the point of Bitcoin.

Though I agree with every thing said in the op, but the bolded line is actually what caught my attention, and I just imagined how true..
Made me remember an experience I had with my bank one time when I went to deposit some money into my account.

The bank assigned someone to me, to guide me on how to install an app on my phone through which I can pay bill, buy recharge card plus other stuff, the lady was all nice, calm and loving to me that I had no choice but to oblige to every of her instructions, finally, the app was installed and registration and customer verification was done successfully, I went home.
.
After about a week of using the app, I realized that the bank did not actually assist me in any way, they did what they did for their own Monterey gains, fees charged for transactions through the app was exorbitant that at the end, I had no choice but to just delete it.

Indeed, for me, bitcoin is the best form of money at the moment, but like the op said, many are yet to realized this fact.

At the present, I see no other advantage of this technology over banks aside from profit potential and avoiding taxes. Regulation and overall acceptance across countries are still an issue which I think limits the advantages of this industry and is something we have to deal with right now. Also, it is hard to conclude still whether the interest this technology is having, would be the same once global adoption occurs in the future thru regulation simply because transactions will no longer be with anonymity and there is a tendency for the market price to stabilize. We all know why cryptocurrencies are in hype and that is because of being profitable. So if it would no longer be, perhaps, then will you still be interested?

Same experience the bank I'm using got some technical problems that affected my account like it got freeze so I dialed them online. But bro the customer service doesn't even sound concerned with my problem like they don't even announce informations that will make their customer calm with the given situation. I almost thought my account got freeze or hacked.The only thing I could do was went to the their bank and ask for my money to withdraw then I'm out. That's why I never want to put my money in the banks the transactions hassles unlike in the bitcoin. But its up to you where you can trust up your money I just go with my experience.

Recently a very large U.S. bank has failed (SVB): https://www.cnbc.com/2023/03/10/silicon-valley-bank-is-shut-down-by-regulators-fdic-to-protect-insured-deposits.html

Some portion of funds are secured by the government but after 250k USD, there is no federal security. So there's a lot of people that are worried right now considering the bank has entirely collapsed after failing to secure emergency funding. This bank was publicly traded and any shareholder has completely lost everything.

It's not even as if this bank was mismanaged, necessarily. They invested heavily in tech stocks in 2021 and U.S. treasury bonds. However, the interest rates hikes sank their investments and the tech stock crashes throughout the last few months put them in a rough financial spot.

People with funds in SVB all withdraw simultaneously seeing as SVB was struggling and the sudden surge of mass withdrawals mad sure they were unable to guarantee withdraws (the same situation with FTX).

Moral of the story -- any funds you deposit into a bank are not yours. Banks can and will collapse no matter how large they are.

There are too much hassle in opening bank accounts and much more hassle in withdrawing our funds especialy when we are withdrawing a huge amount of money, it will take days depending on the capability of the bank. There is also a daily limit on how much we can withdraw, and if we wanted to increase our withdrawal daily limit, we have to make a request.

Comparing with Bitcoin, we can do whatever we want with our coins.  There is no transaction limit, no verification process, etc..  We just need to install the software and voila we can easily transfer Bitcoins anywhere in the world.