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Author Topic: Banks should embrace bitcoin  (Read 1365 times)
notig
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December 05, 2013, 04:46:58 AM
 #1

I keep hearing about how bitcoin will destroy banks and lead us into a new age. I like bitcoin as much as any avid bitcoin fan could........ but I think most people don't understand the situation fully.
Bitcoin's success would eat into certain profits that banks have.... for instance wire transfers as an example. But the bread and butter of banks profit isn't from some petty fees (even though they add to billions). It's from loans.

For instance with the dollar...... every dollar in circulation (electronic or cash version) has been created because it was loaned into existence. Therefore every dollar is also earning some bank interest. They create it from nothing.... lend it out with interest attached... and reap the rewards. No one has a better gig than that. The president doesn't have a better gig than that. God himself doesn't have a better gig than that. A slave owner from centuries ago didn't even have it that good. And bitcoin doesn't affect that. No one in their right mind is going to ever say hmmm...... should I get a loan in dollars (which is an inflationary currency ) at this low interest rate.... OR should I get a loan in bitcoin (deflationary) at this high interest rate ? No sane person is going to want a loan in bitcoins. Even if there was some fancy bitcoin bank giving them out.

And people love getting loans. They love living beyond their means on credit. Loans won't go away. And of course ...... the dollar won't die. Even if bitcoin is wildly successful.... the fact of the matter is the government taxes us. It forces us to pay taxes. Therefore we have no choice but to pay them and since the dollar is accepted in the payment of taxes then it will always have some value.
None of this is a problem for bitcoin. Bitcoin doesn't need to kill banks to be successful. In fact........ of all the people in a position to profit wildly from bitcoin it is banks themselves.... because if one bank was to integrate an exchange and offer deposits and the exchange in the same place that would be pretty nifty.
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December 05, 2013, 11:38:33 AM
 #2

Logically, they should but they won't

Easier to regard bitcoin as competition to be snuffed out with the help of their political cronies 

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December 05, 2013, 12:44:07 PM
 #3

We don't need the banks any more. There'll be some that embrace cryptos - some people would just rather somebody else looks after their money.

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December 05, 2013, 02:50:04 PM
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Who do you think has the kind of money to trust 10 million on an exchange and lose whatever it is to slippage? 

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niothor
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December 05, 2013, 03:58:24 PM
 #5

We don't need the banks any more. There'll be some that embrace cryptos - some people would just rather somebody else looks after their money.

You know that banks usually work by doing both deposits and loans. Give me the crypto solution for that.

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hilariousandco
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December 05, 2013, 04:12:32 PM
 #6

We don't need the banks any more. There'll be some that embrace cryptos - some people would just rather somebody else looks after their money.

You know that banks usually work by doing both deposits and loans. Give me the crypto solution for that.

Yup. Somebody will create a bitcoin bank, I'm sure of it. I'm sure there'll be a few scam ones too, but I reckon it's only a matter of time before a big bank has a crack at it. I'm sure they're all monitoring the markets very closely and trying to work out what the fuck they're gonna do. I'm also betting they're sweating a bit.

Join the upcoming Premier/Champions League predictor pool here: https://bitcointalk.org/index.php?topic=5154317.msg51467291#msg51467291
balanghai
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December 05, 2013, 04:31:05 PM
 #7

This is not a good idea as it will increase the banksters' clout and could pose a huge threat to BTC economy. And also making it hard for simple individuals to have access.
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December 05, 2013, 05:56:38 PM
 #8

sure, the bank can loan trillions of dollars so that some people can work 4 jobs their entire life to pay of their fancy car.

I'll stick to bitcoins and laugh all my way PAST the bank.

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December 05, 2013, 08:46:02 PM
 #9

Well, there is NO point for banks, when we have bitcoin!  Roll Eyes
niothor
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December 05, 2013, 09:21:56 PM
 #10

Well, there is NO point for banks, when we have bitcoin!  Roll Eyes


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December 05, 2013, 09:27:50 PM
 #11

Hmm, why should banks endorse bitcoin?

Hyptothetical situation.
- Banks consider bitcoin a valid online transaction medium.
- $(Bank whatever) forks bitcoin and premines 1 billion units.
- $(Bank whatever) sets up its own exchange and sets fixed sell order for the billion units at $1.01 and enough buy units at $.99 for 3 years worths of mining from block rewards.
- $(new altcoin) is thus considered a stable currency. Online retailer afraid of Bitcoin because of price volatility adopt the banks $(altcoin) instead.
- $(Bank whatever) basicly outsources its datacenter to whatever miners want a fixed income
- Profit. For $(Bank whatever) for outsourcing datacenter to miners who often enough "work" for electricity costs.

Bonus points to $(Bank whatever) if mining licenses cost extra and provide additional income.

Ok, call me paranoid if you want to ...
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December 06, 2013, 12:34:16 AM
 #12

anything that is decentralized is going against the banking systhem, wich i think is one of the advantage of the BTC.

If you look at how banking system works , they will not embrace the BTC any soon IMHO.
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December 06, 2013, 04:58:44 AM
 #13

Banks today function with a very basic method for generating profit.

1. The customers profits off of storing their value in the bank, thus generating an interest. For the sake of argument, lets pretend this interest is 5% /year and the inflation of the $ is 3% /year), thus you profit 2% every year off of the amount you've kept in the bank

2. The bank profits off of insurances, where you as a consumer pay a certain amount. For the sake of argument, lets pretend the average customer pays $1000 every year for all insurances. Now, the bank bases their insurance prices off of the calculated statistics of how much an average customer costs the bank through person-based health injury/sickness and material-based injury. So if the average customer pays $1000 /year for insurances, the bank statistically knows they will pay ~$800 (again, for the sake of argument) to cover these insurances for the average Joe.

3. The bank profits off of loans, where you as a customer takes out a loan, and have to pay a certain percentage over your loaned amount. For the sake of argument, lets say this amount if 110% of your loaned amount.

The point here, is that banks follow a very basic formula for how they generate profit. They have to offer the customer advantages to storing their money (other than keeping them safe), otherwise someone else would be offering these services (another bank). - With bitcoin, the banks could not offer loans, as the currency is currently too volatile and unstable. This basically translated to the bank not wanting to hand out loans because of the high risk involved. When you remove the option for the bank to profit off of loans, you have to remove some of the customer profits, otherwise the banks would not make a profit. Very basic 2 -1 = 1 kind of math.

Basically, until bitcoin stabilizes (if ever) there is not safe potential for any bank to deal with bitcoins. The only option i could see for banks to profit off of bitcoin at the moment would be through storage.
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December 06, 2013, 12:55:02 PM
 #14

merrill lynch has a quite positive opinion about bitcoin. in the last month, you saw a great mind-shift in media about bitcoin...

https://bitcointalk.org/index.php?topic=359687.0

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