Bitcoin Shows What Banking Should Be: American Banker

[links]

American Banker, a daily trade newspaper that has been covering the financial sector since 1836, recently featured an analytical piece by its editor-in-chief Marc Hochstein entitled “How I missed the point of bitcoin,” to demonstrate how Bitcoin has shown what global banking should be.

Fees and speeds
In 2012, Hochstein noted in an article entitled “Lightning fast, dirt cheap: bitcoin shows what banking could be,” that a new peer to peer digital cash system has emerged. Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

The decentralized nature of Bitcoin remains identical but what has changed in Bitcoin is its fee and settlement speed. Due to the explosive growth of the Bitcoin network and its market, average Bitcoin transaction fees have increased beyond $2.5. In addition, at certain periods wherein the Bitcoin mempool, the holding area of Bitcoin transactions for the miners, is full of unconfirmed transactions, the confirmation of transactions can take hours.
Financial privacy and cost-effectiveness
Since its launch, the problem Bitcoin went on to solve was not the high fees of banking services nor the issuance of an anonymous financial network. Financial privacy and cost-effectiveness came as byproducts of Bitcoin’s actual purpose. As Marc Hochstein wrote, Bitcoin’s primary focus was to establish a global digital cash system that is censorship-resistant and decentralized.

“No, the key thing about bitcoin is its censorship-resistance — something that I only obliquely touched on in my original post, when I mentioned that the currency could be used to purchase drugs on the dark web or send donations to WikiLeaks, which was then operating under a blockade by the major payment networks,” wrote Hochstein.

[BillyBobZorton]

American Banker, a daily trade newspaper that has been covering the financial sector since 1836, recently featured an analytical piece by its editor-in-chief Marc Hochstein entitled “How I missed the point of bitcoin,” to demonstrate how Bitcoin has shown what global banking should be.

Fees and speeds
In 2012, Hochstein noted in an article entitled “Lightning fast, dirt cheap: bitcoin shows what banking could be,” that a new peer to peer digital cash system has emerged. Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

The decentralized nature of Bitcoin remains identical but what has changed in Bitcoin is its fee and settlement speed. Due to the explosive growth of the Bitcoin network and its market, average Bitcoin transaction fees have increased beyond $2.5. In addition, at certain periods wherein the Bitcoin mempool, the holding area of Bitcoin transactions for the miners, is full of unconfirmed transactions, the confirmation of transactions can take hours.
Financial privacy and cost-effectiveness
Since its launch, the problem Bitcoin went on to solve was not the high fees of banking services nor the issuance of an anonymous financial network. Financial privacy and cost-effectiveness came as byproducts of Bitcoin’s actual purpose. As Marc Hochstein wrote, Bitcoin’s primary focus was to establish a global digital cash system that is censorship-resistant and decentralized.

“No, the key thing about bitcoin is its censorship-resistance — something that I only obliquely touched on in my original post, when I mentioned that the currency could be used to purchase drugs on the dark web or send donations to WikiLeaks, which was then operating under a blockade by the major payment networks,” wrote Hochstein.

It seems this guy gets it. This is key:

Since its launch, the problem Bitcoin went on to solve was not the high fees of banking services nor the issuance of an anonymous financial network. Financial privacy and cost-effectiveness came as byproducts of Bitcoin’s actual purpose. As Marc Hochstein wrote, Bitcoin’s primary focus was to establish a global digital cash system that is censorship-resistant and decentralized.

This is why big blockers are confused. We can't compromise bitcoin's decentralization just to lower fees, we need alternatives for that. Having a big blocksize is definitely not the answer, never was, never will.

[davis196]

I don`t get your point about quoting an 2012 article.
Bitcoin had some advantages like low fees,high speed,now those advantages are gone but btc has other advantages like a more stable price and a bigger community.
I can`t agree with the title.Bitcoin has nothing to do with banking and can`t show anyhting to bankers.
Bitcoin is a "central bank-free" digital currency and we should keep btc away from any form of centralization.

[Hydrogen]

Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

Wire transfers can take 48 hours while costing $50 or more in transfer fees.

Bitcoin still has a distinct advantage in those areas.

For 2012, this guy was way ahead of his time with his comments on decentralization and censorship.

[wuvdoll]

I can`t agree with the title.Bitcoin has nothing to do with banking and can`t show anyhting to bankers.

Are you sure ? Bitcoin is a banking system for me. I have used my checking account some 15 months back. I get paid in bitcoins and I am able to spend for my life's need with bitcoins, no need of depending on traditional banks for me anymore, hopefully.

I must say, bankers should learn and stop stealing people's wealth. I believe that must be the point of having decentralized system.

[Mometaskers]

Decentralization must be maintained, yes. We've had enough of the government meddling with how we use our money and banks outright stealing them. The problem now is really how to maintain those and yet allow for faster and cheaper transactions that users wanted.

Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

Wire transfers can take 48 hours while costing $50 or more in transfer fees.

Bitcoin still has a distinct advantage in those areas.

For 2012, this guy was way ahead of his time with his comments on decentralization and censorship.

True. Even though it is currently unattractive for store payment and small transactions, it could still have use for sending money internationally. Still definitely faster since sometimes those can take up to 5 days. Plus the bank would sometimes even withhold the money first and ask for documents.

[gentlemand]

All an American has to do to see the future of banking is pop over to Europe where it's free, instant and very integrated.

It's incredible that a supposedly first world country has a banking system that's probably outgunned by a small African nation in user friendliness and efficiency. How was allowed to fall so far behind?

[cafucafucafu]

Bitcoin really does offer a viable way for people to process their payments after the imminent financial system collapse - it was designed in 2008, and this means that satoshi meant it to be an alteranitev to fiat. Though a financial crisis was obviously in full effect in 2008 it did not collapse the entire economy, meaning that people don't know what bitcoin can really be used for.

BTC transfers are obviously wayyy cheaper than fiat transfers, if sending money overseas. It connects merchants and buyers from hundreds of cities worldwide without extra fees, and that opens up a new window of opportunities.

In my opinion, the sad truth about bitcoin is that its full potential can only be realised when governments completely ban cash, ban crypto, ban gift cards, anything that allows anonymous transactions to happen without government knowing. Only then will people realise that privacy is something that everyone deserves, and decentralization is the only way to achieve this.

[arpon11]

I was happy reading this post. Op thank you for posting this here. One major points I peak here is transaction speed and low fees. Bankers and evil politicians were against bitcoin from beginning but glad some of them has started seeing the truth and their now testify and regretting why they never buy into bitcoin from beginning.

[Amph]

Decentralization must be maintained, yes. We've had enough of the government meddling with how we use our money and banks outright stealing them. The problem now is really how to maintain those and yet allow for faster and cheaper transactions that users wanted.

Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

Wire transfers can take 48 hours while costing $50 or more in transfer fees.

Bitcoin still has a distinct advantage in those areas.

For 2012, this guy was way ahead of his time with his comments on decentralization and censorship.

True. Even though it is currently unattractive for store payment and small transactions, it could still have use for sending money internationally. Still definitely faster since sometimes those can take up to 5 days. Plus the bank would sometimes even withhold the money first and ask for documents.

not only abroad, bitcoin is still a valid choice for internatioal usage, when you don't want to deal with stupid restriction and AML stuff, if i want to send to my friend 1M in bitcoin i can do it easily

try to do it with your bank account, you will only get the attention of your local fiscal agent, and AML because they need to know from where this money come from

[Jherek]

American Banker, a daily trade newspaper that has been covering the financial sector since 1836, recently featured an analytical piece by its editor-in-chief Marc Hochstein entitled “How I missed the point of bitcoin,” to demonstrate how Bitcoin has shown what global banking should be.

Fees and speeds
In 2012, Hochstein noted in an article entitled “Lightning fast, dirt cheap: bitcoin shows what banking could be,” that a new peer to peer digital cash system has emerged. Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

The decentralized nature of Bitcoin remains identical but what has changed in Bitcoin is its fee and settlement speed. Due to the explosive growth of the Bitcoin network and its market, average Bitcoin transaction fees have increased beyond $2.5. In addition, at certain periods wherein the Bitcoin mempool, the holding area of Bitcoin transactions for the miners, is full of unconfirmed transactions, the confirmation of transactions can take hours.
Financial privacy and cost-effectiveness
Since its launch, the problem Bitcoin went on to solve was not the high fees of banking services nor the issuance of an anonymous financial network. Financial privacy and cost-effectiveness came as byproducts of Bitcoin’s actual purpose. As Marc Hochstein wrote, Bitcoin’s primary focus was to establish a global digital cash system that is censorship-resistant and decentralized.

“No, the key thing about bitcoin is its censorship-resistance — something that I only obliquely touched on in my original post, when I mentioned that the currency could be used to purchase drugs on the dark web or send donations to WikiLeaks, which was then operating under a blockade by the major payment networks,” wrote Hochstein.

Probably not the most fitting description of bitcoin right now becaues we all know how high the bitcoin transaction fees are right now. Though if bitcoin scales somehow with Segwit and whatnot then this issue is going to be rosolved.

I think that the point that he said that will stand true no matter what happens with bitcoin, whether transaction fees climb even further, is that bitcoin is censorship resistant. This is as a result of bitcoin being fungible, and fungibility is as a result of bitcoin's anonymity and decentralization i.e. nobody can freeze your account because you're funding someone that's their direct opponent.

Bitcoin's got a long way to go in the future and it's going to be an interesting ride for everyone on board.

[mrfreezeh]

Decentralization must be maintained, yes. We've had enough of the government meddling with how we use our money and banks outright stealing them. The problem now is really how to maintain those and yet allow for faster and cheaper transactions that users wanted.

Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

Wire transfers can take 48 hours while costing $50 or more in transfer fees.

Bitcoin still has a distinct advantage in those areas.

For 2012, this guy was way ahead of his time with his comments on decentralization and censorship.

True. Even though it is currently unattractive for store payment and small transactions, it could still have use for sending money internationally. Still definitely faster since sometimes those can take up to 5 days. Plus the bank would sometimes even withhold the money first and ask for documents.

not only abroad, bitcoin is still a valid choice for internatioal usage, when you don't want to deal with stupid restriction and AML stuff, if i want to send to my friend 1M in bitcoin i can do it easily

try to do it with your bank account, you will only get the attention of your local fiscal agent, and AML because they need to know from where this money come from

Well, when send a huge money to anyone with bank or other payment system control by goverment, we always need show source money from where and is legal or not! I hate it because it does not make me feel private and spend more time for prove legal. But with Bitcoin or Crytpo, I just need address people I want send and waiting confirm transaction, not need more time to do that and private

[raven7886]

I don`t get your point about quoting an 2012 article.
Bitcoin had some advantages like low fees,high speed,now those advantages are gone but btc has other advantages like a more stable price and a bigger community.
I can`t agree with the title.Bitcoin has nothing to do with banking and can`t show anyhting to bankers.
Bitcoin is a "central bank-free" digital currency and we should keep btc away from any form of centralization.

Why not bitcoin may teach the importance of being decentralized for any financial related things. Bitcoin must be based on derived concepts of economy hence it has many unimaginable features which are not available with traditional economy. Hence bitcoin systems can teach many things.

[audaciousbeing]

American Banker, a daily trade newspaper that has been covering the financial sector since 1836, recently featured an analytical piece by its editor-in-chief Marc Hochstein entitled “How I missed the point of bitcoin,” to demonstrate how Bitcoin has shown what global banking should be.

Fees and speeds
In 2012, Hochstein noted in an article entitled “Lightning fast, dirt cheap: bitcoin shows what banking could be,” that a new peer to peer digital cash system has emerged. Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

The decentralized nature of Bitcoin remains identical but what has changed in Bitcoin is its fee and settlement speed. Due to the explosive growth of the Bitcoin network and its market, average Bitcoin transaction fees have increased beyond $2.5. In addition, at certain periods wherein the Bitcoin mempool, the holding area of Bitcoin transactions for the miners, is full of unconfirmed transactions, the confirmation of transactions can take hours.
Financial privacy and cost-effectiveness
Since its launch, the problem Bitcoin went on to solve was not the high fees of banking services nor the issuance of an anonymous financial network. Financial privacy and cost-effectiveness came as byproducts of Bitcoin’s actual purpose. As Marc Hochstein wrote, Bitcoin’s primary focus was to establish a global digital cash system that is censorship-resistant and decentralized.

“No, the key thing about bitcoin is its censorship-resistance — something that I only obliquely touched on in my original post, when I mentioned that the currency could be used to purchase drugs on the dark web or send donations to WikiLeaks, which was then operating under a blockade by the major payment networks,” wrote Hochstein.

I would be happy if this same guy can be interviewed today and to know if he will still maintain the same position because truth be said in as much that he advantages he was referring to were very much valid 5 years ago, they are really fading away as at today when to transfer funds from wallet then you need to be conscious of the fees in addition to the time for it to confirm. But I am hope that the challenges are ephemeral and that bitcoin will be back and stronger then good old days will be back.

[Lieldoryn]

I can`t agree with the title.Bitcoin has nothing to do with banking and can`t show anyhting to bankers.

Are you sure ? Bitcoin is a banking system for me. I have used my checking account some 15 months back. I get paid in bitcoins and I am able to spend for my life's need with bitcoins, no need of depending on traditional banks for me anymore, hopefully.

I must say, bankers should learn and stop stealing people's wealth. I believe that must be the point of having decentralized system.

You are wrong. To spend bitcoins you need to exchange them for national currency and withdraw to the Bank card. So you can't say that I do not have any relationship with banks. Probably too early to talk about a separate economy of the cryptocurrency.

[Mometaskers]

Decentralization must be maintained, yes. We've had enough of the government meddling with how we use our money and banks outright stealing them. The problem now is really how to maintain those and yet allow for faster and cheaper transactions that users wanted.

Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

Wire transfers can take 48 hours while costing $50 or more in transfer fees.

Bitcoin still has a distinct advantage in those areas.

For 2012, this guy was way ahead of his time with his comments on decentralization and censorship.

True. Even though it is currently unattractive for store payment and small transactions, it could still have use for sending money internationally. Still definitely faster since sometimes those can take up to 5 days. Plus the bank would sometimes even withhold the money first and ask for documents.

not only abroad, bitcoin is still a valid choice for internatioal usage, when you don't want to deal with stupid restriction and AML stuff, if i want to send to my friend 1M in bitcoin i can do it easily

try to do it with your bank account, you will only get the attention of your local fiscal agent, and AML because they need to know from where this money come from

Well it would still depend on how you send the bitcoins. If you send it to a personal wallet then the receiver can exchange it for fiat at his or her leisure. If you send it all directly to the exchange, then they might require more verification. Well at least here in my country. Either way, you'll still use the exchange to encash it.

The good thing is it'll still be sent to your account in the exchange, ready to send to your bank account. It happened to me once that I was sent a remittance but the bank says they need to see more IDs from me. Basically, they already have the money but they didn't send it to my savings account yet.

[Slark]

I can`t agree with the title.Bitcoin has nothing to do with banking and can`t show anyhting to bankers.

Are you sure ? Bitcoin is a banking system for me. I have used my checking account some 15 months back. I get paid in bitcoins and I am able to spend for my life's need with bitcoins, no need of depending on traditional banks for me anymore, hopefully.

I must say, bankers should learn and stop stealing people's wealth. I believe that must be the point of having decentralized system.

You are wrong. To spend bitcoins you need to exchange them for national currency and withdraw to the Bank card. So you can't say that I do not have any relationship with banks. Probably too early to talk about a separate economy of the cryptocurrency.

Haven't you bought directly with bitcoin before? There are merchants and services accepting bitcoin. Heck, Steam is accepting Bitcoins, Microsoft and Dell.
If you seek really deep you will be able to buy probably anything for bitcoin. There is no need to exchange it to FIAT anymore.
Look at Japan - bitcoin is  accepted by over 500.000 merchants and services there. This is the future when fiat money will leave the scene.

[Yakamoto]

American Banker, a daily trade newspaper that has been covering the financial sector since 1836, recently featured an analytical piece by its editor-in-chief Marc Hochstein entitled “How I missed the point of bitcoin,” to demonstrate how Bitcoin has shown what global banking should be.

Fees and speeds
In 2012, Hochstein noted in an article entitled “Lightning fast, dirt cheap: bitcoin shows what banking could be,” that a new peer to peer digital cash system has emerged. Five years ago, Hochstein praised the Bitcoin network’s ability to settle transactions with low fees and at fast speeds without the necessity and involvement of intermediaries or mediators.

The decentralized nature of Bitcoin remains identical but what has changed in Bitcoin is its fee and settlement speed. Due to the explosive growth of the Bitcoin network and its market, average Bitcoin transaction fees have increased beyond $2.5. In addition, at certain periods wherein the Bitcoin mempool, the holding area of Bitcoin transactions for the miners, is full of unconfirmed transactions, the confirmation of transactions can take hours.
Financial privacy and cost-effectiveness
Since its launch, the problem Bitcoin went on to solve was not the high fees of banking services nor the issuance of an anonymous financial network. Financial privacy and cost-effectiveness came as byproducts of Bitcoin’s actual purpose. As Marc Hochstein wrote, Bitcoin’s primary focus was to establish a global digital cash system that is censorship-resistant and decentralized.

“No, the key thing about bitcoin is its censorship-resistance — something that I only obliquely touched on in my original post, when I mentioned that the currency could be used to purchase drugs on the dark web or send donations to WikiLeaks, which was then operating under a blockade by the major payment networks,” wrote Hochstein.

I'm actually kind of impressed that this guy was able to do a double-take on Bitcoin and realize that he was thinking about it the wrong way. It's not often that you see guys with that kind of honesty within the community and frankly, most people don't change their opinions on this topic, at least from what I have seen in the past.

This was a good read, and I think this should be passed around a lot more. It would be nice if we could knock that $2.50 fee down but that'll come with time. Aside from that, great perspectives coming from this author.

[ModGirl]

I was happy reading this post. Op thank you for posting this here. One major points I peak here is transaction speed and low fees. Bankers and evil politicians were against bitcoin from beginning but glad some of them has started seeing the truth and their now testify and regretting why they never buy into bitcoin from beginning.

Yes they are testify and regretting that why they never buy into bitcoin since from a start. Utterly is a truth. Bitcoin is upgrading the speed and transaction fee according to given amount. Do you ever think that why bankers and evil politicians involve it is a harmful act for those government who are corrupt who are getting much money from people by taxes while bitcoin never greed to take taxes it is saving the extra income of people

[bitcoinvestor]

Bitcoin users still need banks because many countries still not allowed transaction using bitcoin. We should make bitcoin into fiat so we can shop offline. For online business we use bitcoin is a better way than use banking payment system. That's I think the point " What Banking should be". To make transaction we need seconds or minutes without worrying about limitation. Banks still apply limitation to account holders due to any reasons. Bitcoin? No limitation.