I really don't see how Bitcoins will take business away from banks.
If I have a dollar, and I won't be needing it for while, I could keep it in my wallet. But that would waste away its opportunity value. If instead I put it in a savings account I could receive part of its opportunity value, the interest.
If I have a BTC, and I won't be needing it for while, I could keep it in my wallet.dat. But that would waste away its opportunity value. If instead I put it in a savings account I could receive part of its opportunity value, the interest.
Take a look at "Money illusion": http://en.wikipedia.org/wiki/Money_illusion
The main target of the Fed is economic growth, not inflation. The Fed will adopt inflationary measures to achieve growth, even if that means eroding the savings of American citizens. On the other hand, the main target of the European Central Bank is inflation, which must be below but near 2%.
Central banks systematically increase the supply of their currencies like euro and dollar. In dire situations, especially in current times, with high debt levels, central banks may be tempted to expand the money supply well over reasonable limits. Inflation is strongly correlated to money supply.
So, most of the time, a savings account in dollars or euros in a bank can not even compensate for inflation. The savers lose real value, i.e. savers lose purchasing power. On the other hand, Bitcoin supply will not expand in the long term (21 million BTC, maximum), so you can keep your purchasing power without the banking system.
The more central banks abuse Quantitative Easing, the more Bitcoin will be valuable in relation to those fiat currencies.
I completely agree that putting USD in a savings account is retarded, however I said "dollar", not
"USD". Not every fiat currency is tumbling into worthless.
But I digress, you completely missed the point of my post. It's partly my fault since I used fiat as an example, and obviously this crowd doesn't like fiat that much. I'll rephrase my point in more general terms:
"things of value" have a opportunity value associated with it. If my car is sitting in my garage while I go on a vacation, I'm wasting my car's opportunity value while I'm gone. If I shutdown my computer while I'm sleeping, I'm wasting my computer's opportunity value while I slept. If I have 1BTC sitting in my wallet, I'm wasting the opportunity value of that BTC as long as it's in my wallet.
The only way to recover that lost opportunity value would be to lend my valuables out whenever I'm not using it. If I lend that 1BTC out from the time I received it to the time that I needed to spend it, someone else could have used that BTC for something productive. This way both the lender and the borrower profits.