Bitcoin Forum

Banks are only necessary if people need to deposit their money in them. With bitcoin there is really no reason to keep your bitcoins in a bank.

However, it is foreseeable that people may want to keep their bitcoins safe by keeping them in a bank that they trust. Even if this occurs, bitcoin allows for PROOF OF SOLVENCY which means that everyone can verify that the bank is actually storing their bitcoins for them.

This effectively eliminates the possibility of Fractional Reserve Banking. Who in their right mind is going to give their bitcoins to a bank that turns our around and lends them to other people and makes bets in the stock market with them? Nobody.

Only those banks that embrace PROOF OF SOLVENCY will survive with bitcoin. Those banks that try to hide what they are doing with people's money or try to give some reason why people should allow them to keep only 3% of deposits in reserve and lend the rest out, will not survive. Nobody will use these when there are PROVEN SOLVENT banks now in existence.

What you think?

Banks and bitcoin are two different things but we could as well have banks for bitcoin or cryptos because the conventional banks only services fiat currencies but they are not limited to deposit alone but you can as well with funds from it.

As long as there will be people looking for credit, to buy a house, or a car, they will be plenty of business for banks. And no company in the first world would be able to live without a substantial credit line. What if some customers pay late? This happens everyday...

Banks, in particular, provide many services that someone will still have to provide even if old currencies were to be totally replaced by bitcoins. People will still need to borrow money, for example and other people will want to lend it.

I think you are ignoring reality.

If people deposit money in banks and don't care about FRB, why would they care more with bitcoins? People deposit bitcoins in Coinbase, and Coinbase does not do proof of solvency. Most people just don't care about FRB as long as they are told (and believe) that they will get their deposit back.

Digital currency will accepted as payment methods, which is agreed by lots of companies on internet. This is a new challenge for the industry. Traditional currency will disappear and bitcoin is legal foundation of digital economy.

After Mt. Gox people should care!

I think the people in Cyprus and in Greece care about Fractional Reserve Banking a little more than we do right now, but I think it may become a little more important to us in the future.  ;)

The beauty of bitcoin is that people who don't want to use banks or services like Coinbase don't have to. But those that want to now have the choice to only do business who do Proof of Solvency, such as Vault of Satoshi:


Bitstamp has followed suit:

https://www.cryptocoinsnews.com/bitstamp-provides-proof-bitcoin-solvency-first-step-towards-real-financial-audit/

As well as Bitfinex:

https://www.cryptocoinsnews.com/bitfinex-passes-stefan-thomass-proof-solvency-audit/

But Vault of Satoshi is the only one currently that allows for full proof of solvency. I think this trend will eventually extend to all exchanges and places that people trust to hold their bitcoins. This is just yet another extension of how Bitcoin allows for innovation in finance.

There will always be people that want to borrow money, and there will always be people who are willing to lend money for a fee. What will not continue is Fractional Reserve Lending because it is predicated upon the necessity of people having no choice but to deposit their funds in banks and the impracticality of proof of solvency.

With bitcoin there is no need to deposit your bitcoins in a bank and even if you do, you now have the choice to only deposit your bitcoins in a bank that allow for full Proof of Solvency so you know for sure that your bitcoins are safe in sound and not being lent to low income borrowers with no job no credit or bad credit, and not being gambled on bad bets in the stock market.

This does not mean that there will be no more loans. Just look on this very forum there are people offering loans. Loans will still exist they will only exist in a more honest fashion, which is to say that lenders will be those who have excess capitol they are able to lend, instead of promising to keep your money safe and turning around and lending your money to people. Lenders will will have to be those who lend their own money, not those who lend other people's money. And I think that is a more honest system for the economy to be based on.

What kind of legal measures could someone take if the borrower defaults on a loan? And if there are none why would people lend?

I think you under estimate the apathy of the general public. They don't care what the banks do to them or their money, just like they don't care what their government does with their taxes.

Not necessarily apathy, the general public is simply pretty ignorant about concepts such as Fractional Reserve Banking
Your average Joe doesn't even realize that the Federal Reserve is as federal as Federal Express

for those who are still bemused by the banking system, here is a humorous half-hour cartoon explaining it
https://www.youtube.com/watch?v=mII9NZ8MMVM



Services like btcjam and BLC use Net-Arb which is useless in many cases
Bitcoin needs wider adoption and recognition in order for governments to create the legal framework needed for btc lending to truly scale
However the current lending model based on reputation has been working better than most expected

Why would anyone keep bitcoins in a bank? The whole concept of bitcoin revolves around using peer-to-peer technology to operate with no central authority or banks. It eliminates the nasty charges and unnecessary money sucking procedures that banks carry out in the name of providing you a storage for your money. You're giving banks power and underestimating bitcoins if you're keeping them with banks. Disgrace!

One word - Interest.
Right now, there are no avenues for me to safely invest my bitcoins. If a bank started accepting bitcoin deposits and pays interest on them, I would be ready to give them a chance.

well then you should check out platforms which lend btc, there are many websites for that which can even provide you quick interest over your bitcoins. Some examples of such website would be btclend, btcpop, etc. Check them out, maybe you can check out and browse some deals, it is a profitable opportunity for businessmen and private investors. An example of a btc lending post: https://bitlendingclub.com/loan/browse/lid/17584/30-btc-for-30-days-3-64

Regardless of your vision of bitcoin, people would (and do) keep bitcoins in a bank for security, convenience, and interest.

My coins are already with a bitcoin bank and I'm very happy with the level of service thus far.
They offer very good security but their interest rate on deposits suck big time but guess that's the price you pay to have full control over your own funds.
The bank has nice business hours, they are open 24/7/365 and their support desk is not bad either.
Their internet banking is excellent and you can do banking directly from your mobile at no additional cost.
Opening new accounts are so quick its almost instantaneous and there is no paperwork required.
The best however is the low fees. There is no monthly account maintenance fees and the other fees on transfers etc.. are ridiculously low.
International transfers used to take anything up to 5 or 7 days, my bank now does a complete secure transaction in under an hour.

Need I go on? Anybody interested?

The bank is called Trezor   ;)

Yep but there is a distinction between commercial banks and investment banks.

While commercial banks may become obsolete, they can just switch themselves into investment banks, and continue their existence but with bitcoin.

As a broker or investment/liquidity provider in various bitcoin investment.


That is of course a decentralized investment platform doesnt come out, then the banks are really in big trouble.

You can't compare bank deposits with lending platforms such as btclend.
My expertise is not in determining creditworthiness of borrowers - that is why I outsource it to a bank.
Plus with my bank I know that my deposits (to some extent) are covered by insurance.

would not be the same as keeping them on a exchnge? they can't offer a better security, especially if we are talking about exchange that offer full offline storage like xapo

interest also will be very low like they are now for fiat...

I think that it is easy to determine the credibility of borrowers, just simplify it with factors like how much popular they are, if they are popular in the community it is obviously because they have always returned their money on time along with interest. Such people with trust points are a better investment, I keep investing and also borrow. It has helped me tremendously and it actually is beneficial, don't be too pessimistic about it. Its a little risky, but there are thousands of people using such services everyday, they profit. You can too, sir :)

well bitcoin never repalces a bank in at least this 10 years it could require a BT to 3000$ and like 3 billion users and lots of BT to be made its can get very bad for btc after this 12.5 per Block halfs

If everyone started using Bitcoin and removed banks out the factor would be a very moment for banks to close down and BTC to rule and dominate the world for transactions.

Thats why bitcoins growth can be gradual so that banks can integrate themselves. We dont need to abolish banks, but to steer them in the right directions.

I doubt that the oligarchs ruling the banks care about it, they just care about money, and if we allow them time to reposition their investments in bitcoin then they will have no reason to shut it down, but it will just let them invest in it so nobody loses money.

Do you honestly think that after hundreds of year of 'banking' people suddenly will stop using their services? It is not about that we don't know that our money are used to grow wealth of the banks.
Most people just don't care and accept it as a normal state. I am sure in the future when any form of crypto/virtual currency will take the lead there will be digital banks (even though it is totally not needed).
Virtual banking will be our reality just because banksters and corporation will make it look trendy and needed so people would follow.

Sure, i`m very happy with that, that will be the most civilized, and probably the most likely outcome.

The other one would be to totally ban bitcoin, and setup a spygrid tracking everyone who uses bitcoin and putting them into cages.



I`m sure the first one is the future we all want. We want a civilized humanitarian society.

Assuming that such a situation could only takes place when mass adoption is taking place regarding bitcoin and banks can definitely feel the heat, publicly determined to eliminate such a service labeling it a scam and hence determined illegal. Idk how the govt can have the power to track every bitcoin user, I thought the btc technology promotes anonymity and protects users. Oh, and once such a mass adoption would be taking place, let's assume around 10 times than the population of users now, good luck trying to arrest 5-30 million people, maybe more.

They dont have to arrest 30 million people, its enough to arrest 100-200 of them to make an example and every other person will just obey.

Thats what always happens in any crime, if you were to arrest every person on the planet that has comitted a crime, no matter how small then the planet would instantly turn into a prison planet.

Funny though we already live in a prison planet, so i think justice has already been served... :D


==

But joke aside, that is how population is controlled, you make an example of 1-2 people, then the 1 million other sheeple will be too scared and it will obey.

You do notice that the banks make their own rules, buy politicians to not be obsolete.

And always stay ahead and being in profit, despite their federal reserve itself is a bank as well lol.

The banks will keep thinking for their slice of the pie, make no mistake. But I think there is a place for banks in the future, and when I mean banks i mean companies like Xapo which basically are Bitcoin banks.

Bitcoin is still years behind making banks absolute. Go to your local grocery store and try to pay with bitcoin, they simply don't know what bitcoin is and reject it. Bitcoin is still to new and unknown in order to make banks obsolete.

as long as their is the fiat form..

i dont think any bank will ever dissappear, since they profit us using their currency they keep pumping out..

When bitcoin first came out, it was advertised how people will take charge and stand up for themselves, creating an economic evolution and becoming their own banks. Now, you're back to the same mentality you were conditioned for. You are talking that if we stand up to something which is right, we will be arrested. The government doesn't run the country, the people run the country. Talking about India, if 125 million people want something, that would be democracy speaking. The 60 something appointed people won't be defined as the govt

I don't think we'll ever need them at all unless they can take the deposit to find some ways to generate profit and give us back something in return. Banks need a way to manipulate the orderbook and since they can't change the blockchain, i don't think bitcoin will be if any interest to them.

Almost everything a bank does has to do with accounting. Keeping accounting the same across many branches using the blockchain is exactly what they need.

yes, they need the block chain technology, not bitcoin. So if noobs think that banks will invest in bitcoin and soon price of btc will be 1000000000$ then boo hoo, that isn't happening. Bitcoin can and shall never be centralized, something which banks will do the day they can actually do it. And if people still expect a bitcoin bank where they'd get funds back to keep their btc there, lol. never happening. Rather go to btc lend for that :P

The only thing Banks are still useful for is safety deposit boxes and loans. If people stop wanting to borrow and start living within their means and saving then yes banks could be pretty obsolete and almost useless but as long as people want to live beyond their means then yes as banks lend money and governments keep printing it, they will still be around to haunt us.  :)

I believe that bitcoin will risk the banks with the use of money. Because a debit card can be used with bitcoin in the same way like will fiat money. Always if the owner who release the debit card will not use high fees (hard to believe this). But I don't understand when it will be found the money for various credits which today can be taken only from the banks. Will be bank with bitcoin? But how I will use that bitcoin when they are not physic form? And it will not be the same with the fiat money because the credits will have the same fees to pay?

There are already a few bitcoin debit cards available which you can use at anywhere that takes Visa
https://in.xapo.com/campaign/debit/
https://cryptopay.me/bitcoin-debit-card

But since these run on Visa network, similar fees do apply
I think a new bitcoin card specific network would have to be created in order to get lower fees

You could as well say "there's no need for war if only people learn to live in peace..." :D
People will always need loans and they will always need institutions that provide them, be it banks or Bitcoin companies made by whales that will serve the same purpose in case of a global Bitcoin adoption.

I think that people would not care about FRB in the case of bitcoins as well. They'll continue to act in a way they are accustomed to i.e. trusting a bank as a safe place for their assets regardless of the fact what does the bank do with their money which is definitely unfortunate. If they don't care for FRB right now, why would they care in case of bitcoins then?

Sorry but have serious problems. Two rows above your citation from my post is written: "Because a debit card can be used with bitcoin in the same way like will fiat money." This does it mean that I know that have bitcoin debit card. Who told that don't have bitcoin debit card?

Or your post was to clarify mine?

Banks and bankers are ultimately too big to fail,
and governments will do anything they need to
in order to stay in business.
If the financial system starts moving to bitcoin,
then the banks will just buy out bitcoin
companies.

I`d be happy with that. It's better to have the banks as your ally than your enemy.

I have no problems absolutely with the banks, and this would be the best thing that could happen, to resolve this conflict in a civil way.

In an ideal world (a world where banks aren't this powerful and people are willing to take responsability) banks will become obsolete for the citizenship and small bussinesses, only useful for companies in need of big amounts of liquid assets. The reason behind this statement is that not very long ago most of the tasks that banks do today were solved in contracts among individuals.

For example the payment conditions for mortgages were stipulated in a contract between the interested parties (usually an individual owner and the buyer) and was in rare ocassions where a bank was involved. The contract was as valid as any other legal document and the law protected the owner in case of dues being unpaid or the buyer in case any of the contract conditions weren't met by the owner. Another example are personal loans which were done among individuals as well and all the conditions and interest rate arranged via a notary contract. Nowadays this would be a very valid way for people and small bussiness with some saving to have a good return for an investment with small risks since, again law protected the loaners against unpayment and loanees against not stipulated in the contract.

Right now I don't recollect the link but there are law firm websites which promotes and try to educate the population about the laws that were valid in the past can still be applied today for doing these kinds of bussiness arragements without a bank being part of the equation. A bank gives more security to the transactions and makes all the work for you but if the parties take the time to prepare the contract and hire a notary and educate themselves a bit about contract law both will benefit more since they won't have a middleman who asks for its share.

The best thing to do. It it will be the ideal choice if banks will adopt bitcoin as a currency with all the best it has. But I'm fear that this will fight the other currencies and it will not be possible. Only if the bankers find other incentives for the other currencies that can compete in some ways bitcoin.

I think the banks will like cryptocurrency eventually. They are already in this monetary system, gaining advantage of fiat, by printing it.

But when it collapses, the banks have to switch, to save their own businesses, and then it can come quite handy for a bank to be the first one to adopt bitcoin.

And politicians? They will love to get campaign donations via bitcoin, because it will be easier for them to raise money.

So its all set and done, its only a question of time until it becomes mainstream.

with Bitcoin I run my own bitcoin bank... that's one of the points and advantages of using bitcoin after all.

I don't know in which country you live but to run a bank needed to many licenses and capitals. It will be wonderful if it will be a bitcoin bank. By first of all bitcoin must be accepted and regulated by the Central Bank of the country (your country). Hope that this thing is ok in your case.

Bitcoin will provide all the banking facility to us at the free of cost. We can hold money and or receive. Other than paying interest we can enjoy all the benefits of banking with bitcoin technology. Now a days in many developed countries negative interest is practice already.