Bitcoin will do to the banks, what email did to the post office. True or false?

[Questing]

Bitcoin will do to the banks, what email did to the post office. True or false?

Email didnt put the post office out of business, but it changed the way they do things. Imagine what they thought of instant and free messaging technology when it arrived on the scene.
So now we have instant and free money transactions. Not to put banks out of business, but likely change the way they do things too.

Might make them a little more honest, or is that to much to hope for?

[1715200012]

1715200012

[1715200012]

1715200012

[lebing]

banks/paypal/western union...governments.

True.

[Severian]

The post office is also a money transmitter so email and Bitcoin have put the double whammy on them.

[Merralea]

With any luck, yes.

[qwk]

Bitcoin will do to the banks, what email did to the post office. True or false?

False. Bitcoin will not stop the banks from doing what they do right now. Namely investing, funding, speculating, trading, currency exchange, money creation etc. etc. Bitcoin just adds to those possibilities.

What will the average Joe do in a few years from now when he wants to finance his home? See his bankster? Precisely.
What will Joe the plumber do when he needs a loan for business? See his bankster? Precisely.
What will Jane Doe do when she needs Kenian Shillings for her Diani Beach loverboy? See her bankster? Precisely.

Bitcoin may or may not replace certain parts of the existing banking system, but on the other hand it will also open up new opportunities for it.

[Severian]

What will the average Joe do in a few years from now when he wants to finance his home? See his bankster? Precisely.

In a few years, Average Joe won't be able to afford a house. Then again, the banksters of today will be the Bitcoin scammers of tomorrow.

[Sukrim]

I'd say false, as there are some properties of Bitcoin that are quite different to "regular" fiat money. One of the most obvious would be the limited supply.

It has some uses, no doubt about that and might be attractive to some people - banks on the other hand, as much as some people despise them, also have their uses though and I know even of some projects to build community/"fair" banks.

Maybe just like post offices banks will adapt a bit if Bitcoin (or something with similar concepts/properties) really succeeds - but just look at Paypal which was the last big "bank killer" with the vision of allowing immediate transfers worldwide for everybody and what they became nowadays...

Another thing to consider is that bitcoins are heavily dependent on public electricity and network access as well as access to general purpose computing devices that allow you to run your own code.

[Questing]

Bitcoin will do to the banks, what email did to the post office. True or false?

False. Bitcoin will not stop the banks from doing what they do right now. Namely investing, funding, speculating, trading, currency exchange, money creation etc. etc. Bitcoin just adds to those possibilities.

What will the average Joe do in a few years from now when he wants to finance his home? See his bankster? Precisely.
What will Joe the plumber do when he needs a loan for business? See his bankster? Precisely.
What will Jane Doe do when she needs Kenian Shillings for her Diani Beach loverboy? See her bankster? Precisely.

Bitcoin may or may not replace certain parts of the existing banking system, but on the other hand it will also open up new opportunities for it.

Email didnt put the post office out of business, but it changed the way they did things. Imagine what they thought of instant and free messaging technology when it arrived on the scene. So now we have instant and free money transactions. I think its a fare comparisum

[whitenight639]

Bitcoin will do to the banks, what email did to the post office. True or false?

False. Bitcoin will not stop the banks from doing what they do right now. Namely investing, funding, speculating, trading, currency exchange, money creation etc. etc. Bitcoin just adds to those possibilities.

What will the average Joe do in a few years from now when he wants to finance his home? See his bankster? Precisely.
What will Joe the plumber do when he needs a loan for business? See his bankster? Precisely.
What will Jane Doe do when she needs Kenian Shillings for her Diani Beach loverboy? See her bankster? Precisely.

Bitcoin may or may not replace certain parts of the existing banking system, but on the other hand it will also open up new opportunities for it.

2 words - Crowd funding

[gendal]

False.

Ask yourself: do you expect non-technical retail users to interact directly with the core bitcoin network if/when this takes off big-time?  Where transaction charges for every payment will become the norm? With complete transaction finality (and hence none of the consumer "protections" they have, rightly or wrongly, come to expect)? With the risk that a single computer virus could wipe out their entire net worth?

I would argue no. I would not expect non-technical retail users to interact directly with such a system.

Just as I would not expect them to hold an account with a central bank and transact over a country's real-time gross settlement system every time they need to make a payment.

Instead, I would expect retail customers to transact through intermediaries, whom they would trust to look after their balances, provide payment, reporting and other services.  Institutions that look very much like banks, in fact.

Now, in the absence of a central bank that can act as lender-of-last-resort and so on, it will be critically important for consumers to *choose* the right such intermediary but, as the citizens of Cyrpus are discovering this week, that is true in the non-Bitcoin world too.

So it doesn't take too much of a leap to imagine a world where deferred net settlement / ACH systems crop up to handle high-volume/low-value payments and where it is "banks" who provide the safekeeping/account handling services.... with the core bitcoin network doing what it does best: performing the role of a sound monetary authority and running the core RTGS.

Will it be the current set of banks who corner this market?  I wouldn't bet against it...

[BTC Books]

This is mostly true, I think.

Email took personal communication away from the Post Office.  Hardly anyone sends letters to loved ones any more, finalizes plans for parties or get-togethers, exchanges news with people they've known forever but don't live near, etc.

The Post Office has retained - and even expanded - its business use case.  Most of eBay uses it, a lot of Amazon, dead-tree advertisers, and so on.

By the same token, I think banks will lean more and more to the commercial side of things.

Hasn't that always been the point?  To take back control of our own money?

And banks will have so much less opportunity to fuck with the world, once we're less dependent on them.

[MarlboroMan]

I believe banks are gonna be here for a long time regardless of Bitcoin. Theres always those who prefer the "old way"

[eins78]

False.

Ask yourself: do you expect non-technical retail users to interact directly with the core bitcoin network if/when this takes off big-time?  Where transaction charges for every payment will become the norm? With complete transaction finality (and hence none of the consumer "protections" they have, rightly or wrongly, come to expect)? With the risk that a single computer virus could wipe out their entire net worth?

I would argue no. I would not expect non-technical retail users to interact directly with such a system.

By that logic, your conclusion does not make sense. In the case of email, most end-users don't interact directly with the system (i.e. having their own mail server). If Mail/E-Mail = Money/Bitcoins, then Gmail = Instawallet, isn't it?

[qwk]

Bitcoin will do to the banks, what email did to the post office. True or false?

False. Bitcoin will not stop the banks from doing what they do right now. Namely investing, funding, speculating, trading, currency exchange, money creation etc. etc. Bitcoin just adds to those possibilities.

What will the average Joe do in a few years from now when he wants to finance his home? See his bankster? Precisely.
What will Joe the plumber do when he needs a loan for business? See his bankster? Precisely.
What will Jane Doe do when she needs Kenian Shillings for her Diani Beach loverboy? See her bankster? Precisely.

Bitcoin may or may not replace certain parts of the existing banking system, but on the other hand it will also open up new opportunities for it.

2 words - Crowd funding

For the loverboy? 

Seriously though, crowd funding is a great example of something that really replaces part of what the banks do now.

But crowd funding has nothing to do whatsoever with bitcoin. It came years earlier.

[gendal]

False.

Ask yourself: do you expect non-technical retail users to interact directly with the core bitcoin network if/when this takes off big-time?  Where transaction charges for every payment will become the norm? With complete transaction finality (and hence none of the consumer "protections" they have, rightly or wrongly, come to expect)? With the risk that a single computer virus could wipe out their entire net worth?

I would argue no. I would not expect non-technical retail users to interact directly with such a system.

By that logic, your conclusion does not make sense. In the case of email, most end-users don't interact directly with the system (i.e. having their own mail server). If Mail/E-Mail = Money/Bitcoins, then Gmail = Instawallet, isn't it?

Yes - exactly!  The analogy isn't perfect but, as you imply, the vast majority of email users access their service through an intermediary (GMail, Yahoo, their employer, maybe their ISP, etc).  Vanishingly few run their own server.

My claim is that the same will be true for Bitcoin: should it take off big-time, most people will interact with the Bitcoin network indirectly; their primary relationship will be with an organisation that looks indistinguishable to a bank.   My prediction is that, in time, they won't just be indistinguishable to banks, they will *be* banks.  Most likely, some major banks will start offering Bitcoin accounts and others will buy their way into the market by acquiring services such as Instawallet and the like. 

Going further, my suspicion is that deflationary effects and the rise of transaction fees will be such that, even for those who are sufficiently tech-savvy, it will be advantageous for most, if not all, people to access the network in this way.   Just as nobody would transfer $10 over Fedwire or the UK's CHAPS, nobody will use the core Bitcoin network to transfer a couple of satoshis.

[justusranvier]

Going further, my suspicion is that deflationary effects and the rise of transaction fees will be such that, even for those who are sufficiently tech-savvy, it will be advantageous for most, if not all, people to access the network in this way.

It will only be advantageous for the thieves, inside and outside the bank, who eventually loot the accounts of anyone foolish enough to entrust their bitcoins to a third party.

I submit this is the desired outcome of anyone advocating that Bitcoin remain deliberately limited such that most users will not have the option of maintaining control over their own funds.

[gendal]

Going further, my suspicion is that deflationary effects and the rise of transaction fees will be such that, even for those who are sufficiently tech-savvy, it will be advantageous for most, if not all, people to access the network in this way.

It will only be advantageous for the thieves, inside and outside the bank, who eventually loot the accounts of anyone foolish enough to entrust their bitcoins to a third party.

I don't disagree with your assessment but it doesn't make the "federated" outcome I outlined any less likely. Put another way: if Bitcoin goes mainstream and a few banks start offering Bitcoin accounts, my money would be on them capturing the majority of "retail" users before long. 

I mean: if Cyprus was not enough to trigger queues outside banks in Italy, Greece and Spain this week, what would detach the average person from their affection for lending their wealth to banks from whom they may not get it back?

I submit this is the desired outcome of anyone advocating that Bitcoin remain deliberately limited such that most users will not have the option of maintaining control over their own funds.

That is a fair point: the Bitcoin network, today, is wholly unsuitable as a mechanism for storing and transferring my parents' money (my usual test for whether a technology is ready for non-technical mainstream users).  That's not to say things won't change, of course.

[justusranvier]

That is a fair point: the Bitcoin network, today, is wholly unsuitable as a mechanism for storing and transferring my parents' money (my usual test for whether a technology is ready for non-technical mainstream users).  That's not to say things won't change, of course.

I agree this is the state of Bitcoin at the moment. The problems are known to be solvable though, as long as the solutions are actually implemented.

[gendal]

That is a fair point: the Bitcoin network, today, is wholly unsuitable as a mechanism for storing and transferring my parents' money (my usual test for whether a technology is ready for non-technical mainstream users).  That's not to say things won't change, of course.

I agree this is the state of Bitcoin at the moment. The problems are known to be solvable though, as long as the solutions are actually implemented.

Another fair point....  it's incumbent on me to dig out the threads where this is discussed.  The big blocker to mainstream adoption in the absence of "trusted" intermediaries such as bank-like entities that stands out to me is the inability of regular users (and advanced users at times) to look after themselves online...  i.e. it would be interesting to see discussions around wallet backup/protection that reflect users' inability to backup their systems or choose good passwords and without requiring trust of a third party.    I'll do some digging (if you have links, that would also be good)

[justusranvier]

I think the wiki does a good job about the big picture scalability options:

https://en.bitcoin.it/wiki/Scalability

I think the user error problem will probably be solved with hardware wallets.

https://en.bitcoin.it/wiki/Hardware_wallet

[gendal]

Cheers

[ArticMine]

This thread starts with a false premise; namely that the Internet with email is killing the post office and that somehow Bitcoin will deliver the coup de grâce. Nothing could be further from the truth. Yes of course the Internet and email has drastically reduced the market for first class letter mail and if this had been the only impact the post office would have been out of business years ago. The Internet however has created a whole brand new market for the post office in parcel delivery as more and more people turn to Internet for online shopping. A few days ago I went to the local post office to pick up some parcels and the man in-line in front of me picked up a television set. Now enter Bitcoin into the picture. Bitcoin encourages international e-commerce and this is one area where the post office beats the courier companies hands down at least here in Canada. Why because the courier companies charge ridiculous brokerage and other fees in order to clear a package through customs. I have seen UPS for example charge 50 CAD to "broker" 3.50 CAD worth of GST on a 50 CAD item a few years ago.

By the way the package I picked up at the local post office was purchased from the BitcoinStore and paid for with Bitcoins. If there is one organization that stands to benefit greatly from Bitcoin is actually none other than the post office.

My take with the banks is that while Bitcoin will take some of their existing business away, it will also open a host of completely new business opportunities for them. Who would have thought for example 30 years ago that the post office would be in the TV set delivery business.

[Questing]

This is mostly true, I think.

Email took personal communication away from the Post Office.  Hardly anyone sends letters to loved ones any more, finalizes plans for parties or get-togethers, exchanges news with people they've known forever but don't live near, etc.

The Post Office has retained - and even expanded - its business use case.  Most of eBay uses it, a lot of Amazon, dead-tree advertisers, and so on.

By the same token, I think banks will lean more and more to the commercial side of things.

Hasn't that always been the point?  To take back control of our own money?

And banks will have so much less opportunity to fuck with the world, once we're less dependent on them.

+1

[Mike Christ]

Banks still have a purpose!  They're not inherently evil.

Just, the ones we have now are the scum of the Earth.  A bank which operates on BTC is a good thing, as long as they don't attempt to issue BitDollars, and then later lobby to take us off the Bitcoin standard

[Questing]

This thread starts with a false premise; namely that the Internet with email is killing the post office and that somehow Bitcoin will deliver the coup de grâce.

In all respect, I have not implied email has killed or is killing the post office. And therefore I have not implying bitcoin will kill the banks either. And for the record, I agree with your other opinions.
I am simply pointing out, it had profound implications for the postal business. The post office used to see itself primarily as a letter delivery service, and also parcels. Can you imagine their fears when somebody told them email had arrived? It took them years to adjust and arrive at the diversified business they are today. And a great business they are too.
I think this post is a fair, if not a perfect analogy. Money users can now transact instantly at no cost, and without the banks service. Assuming bitcoin finds its place in the mainstream, which I hope it does, then I think History will show banks profoundly effected. And they will adjust and they will likely prosper. But perhaps a little more honest for not having complete control of our money.

[Questing]

Banks still have a purpose!  They're not inherently evil.

Just, the ones we have now are the scum of the Earth.  A bank which operates on BTC is a good thing, as long as they don't attempt to issue BitDollars, and then later lobby to take us off the Bitcoin standard

+1

[Jaagu]

Yawn.
This topic was covered by Falkvinge couple years ago:
With The Napster of Banking Round The Corner, Bring Out Your Popcorn
by Rick Falkvinge
http://falkvinge.net/2011/05/11/with-the-napster-of-banking-round-the-corner-bring-out-your-popcorn

[nwbitcoin]

The future always brings change, it isn't one thing that causes it, although one thing can lead to another, which leads to another etc.

Email has changed the post office, however, it might be useful to get our diaries sync'ed!

Email was invented in 1973.  The post office only started noticing email in the late 90s, but mostly in the last 5 years.

The reason email has had an effect on this, is also connected to the way that companies interact with their customers.  They started sending their bills by email, so the amount of official post went down. We also had the introduction of direct debit as a way to pay bills, so we didn't need so much of our accounting information sent to us.  It wasn't just because of eBay and Amazon that the post office is having problems. People, generally, didn't send letters to each other on the scale that we send emails.

With that background, how much do you think bitcoin is going to effect the banks?

If anything, the internet has already effected the banks, and bitcoin is a bit late to that party.  Local branches are disappearing, and the whole banking experience is very centralized. The difference with bitcoin, compared to email is that its not the same analogy.

Bitcoin is just a variation of what the banks are already doing.  If you want to pay a factory in China, you just talk to your bank who will arrange it.

What bitcoin offers is a cheaper way to do it.

If bitcoin takes off, I wouldn't be surprised to see that the biggest users of it will become banks - after all they already know all the people who would gain from using it.

If you want a better analogy, think of how VOIP didn't kill the International telecom giants like many thought it would, it just became another of the products they offered!

[Questing]

Thank you for that comprehensive reply nwbitcoin. You make some very good and interesting points. It also accurred to me banks might take advantage of bitcoin. Unfortunately bitcoin might pioneer a wonderful new concept, which is then picked up by, and exploited by big business. Despite of, or maybe because of the banks invested interests in money transactions, they might be the ones to do so. Only time can tell

[Questing]

Yawn.
This topic was covered by Falkvinge couple years ago:
With The Napster of Banking Round The Corner, Bring Out Your Popcorn
by Rick Falkvinge
http://falkvinge.net/2011/05/11/with-the-napster-of-banking-round-the-corner-bring-out-your-popcorn

Not everybody was paying attention a couple years ago Jaagu. I certainly wasnt.
I clicked on your link, but it didnt work. Is it no longer current? I'd love to check it out if you can provide a current link plz?

[Bitcoinpro]

email annihilated the post office like mobile phones did fixed lines

bitcoin will massacre hard cash and traditional bank accounts

stocks and shares will start to mirror their bitcoin worth along, with bonds and derivatives

citizens business the government and major corporations will need capitalizing with bitcoin

anyone who cant use a computer is going to need to learn which will most likely be

the easiest form of phone with wallet app



 

[phatsphere]

OP: add a poll at the top please.

[Timo Y]

Agree.

Banks are not only in the business of managing money and payments, they are also in the business of managing risk.

The market for risk management isn't going to disappear because of bitcoin.

[herzmeister]

stocks and shares will start to mirror their bitcoin worth along, with bonds and derivatives

if that is true, we will maybe experience a major depression and crisis.

who invests in stocks if people at large prefer to keep bitcoins under their mattresses?

all that may prevent this from happening is if Bitcoin is considered a risky asset itself.

[Questing]

email annihilated the post office like mobile phones did fixed lines

bitcoin will massacre hard cash and traditional bank accounts

stocks and shares will start to mirror their bitcoin worth along, with bonds and derivatives

citizens business the government and major corporations will need capitalizing with bitcoin

anyone who cant use a computer is going to need to learn which will most likely be

the easiest form of phone with wallet app

Love your view. World changing prophecy

[Questing]

OP: add a poll at the top please.

You got it

[Jaagu]

Yawn.
This topic was covered by Falkvinge couple years ago:
With The Napster of Banking Round The Corner, Bring Out Your Popcorn
by Rick Falkvinge
http://falkvinge.net/2011/05/11/with-the-napster-of-banking-round-the-corner-bring-out-your-popcorn

Not everybody was paying attention a couple years ago Jaagu. I certainly wasnt.
I clicked on your link, but it didnt work. Is it no longer current? I'd love to check it out if you can provide a current link plz?

First ask http://www.downforeveryoneorjustme.com

Then try another browser.

[Questing]

Yawn.
This topic was covered by Falkvinge couple years ago:
With The Napster of Banking Round The Corner, Bring Out Your Popcorn
by Rick Falkvinge
http://falkvinge.net/2011/05/11/with-the-napster-of-banking-round-the-corner-bring-out-your-popcorn

Not everybody was paying attention a couple years ago Jaagu. I certainly wasnt.
I clicked on your link, but it didnt work. Is it no longer current? I'd love to check it out if you can provide a current link plz?

First ask http://www.downforeveryoneorjustme.com

Then try another browser.

Thanks. Arrogance noted

www.falkvinge.net/2011/05/11/with-the-napster-of-banking-round-the-corner-bring-out-your-popcorn/
that is a great article

[axus]

I like that banks can insure my deposits, so even if they screw up I'm not screwed.  Mt.Gox did themself a big favor by recovering from their early hacking, intact.

The other side of bitcoin is that a bunch can't be printed overnight to bail a government out of debt at everyone else's expense.  A bank can hold bitcoins as well as any other currency, don't see how bitcoin replaces it there.  Government seizure/liens of bank balances is a big negative against banks, though.

[oleganza]

Post office was not killed by email because it was subsidized by printed fiat money. Bitcoin will kill fiat, so the postal office won't be subsidized, so it would need either to shut down or provide a competitive service at higher prices. Since much less number of letters would be sent over for fair high prices, the total amount of paper mail will be greatly reduced. And digital contracts will replace the need to transfer paper certificates and ink signatures.

[thefiniteidea]

Current ACH system (which is mainly Federal Reserve), probably yes.

Banks, probably not.

[gendal]

Current ACH system (which is mainly Federal Reserve), probably yes.

Banks, probably not.

But remember that there is more than just the USD.

Take the UK's hierarchical system:

We have CHAPS as the GBP RTGS, equivalent to Fedwire for the USD.

But we also have systems such as BACS, Faster Payments and other deferred net settlement systems (which I guess also includes Visa/MC settlement, etc) that do internal netting and then settle gross over CHAPS.  People use them because they're cheaper and offer other advantages (e.g. related to liquidity requirements or membership rules)

That is: in my mental model, I see BTC+Bitcoin Network as an analogue of USD+Fedwire or GBP+CHAPS.

The key question, thus, is:  do we see the Bitcoin network scaling to the point that the deferred net settlement systems (e.g. BACS) are not required?  Or do we expect this federated/hierarchical approach to emerge in the Bitcoin world too?

My prediction is that, just as BACS and Faster Payments in the UK would continue to exist, even if everybody was allowed to use CHAPS, I predict that net settlement systems for BTC will crop up, which internalise transactions where possible and settle gross amounts over the Bitcoin network as required.... even if Bitcoin network scalability is a non-issue or transaction charges don't become prohibitive for small transactions.

But I guess time will tell.

(and sorry...  I feel like I'm banging on about this on a thread that isn't really about payment systems, which wasn't my intention....)

[Questing]

I think the wiki does a good job about the big picture scalability options:

https://en.bitcoin.it/wiki/Scalability

I think the user error problem will probably be solved with hardware wallets.

https://en.bitcoin.it/wiki/Hardware_wallet

Thank you for those links

[Mike Christ]

Post office was not killed by email because it was subsidized by printed fiat money. Bitcoin will kill fiat, so the postal office won't be subsidized, so it would need either to shut down or provide a competitive service at higher prices. Since much less number of letters would be sent over for fair high prices, the total amount of paper mail will be greatly reduced. And digital contracts will replace the need to transfer paper certificates and ink signatures.

Sounds like a win-win to me.  Paper is going out the window; it takes too long to move around, and can get quite heavy if you have a lot of writing.  I can't remember the last time I mailed a letter...

At best, the postal office would stick around simply to deliver packages.  I'm okay with that, as long as it stops being subsidized.