What do you think about Fiat and Banks? Can Bitcoin solve the problem?

[|MINER|]

In my personal opinion, Satoshi invented Bitcoin to make our financial system independent from the banking sector. And I also think that Bitcoin is completely separate from these shortcomings of the banking sector. When banks make interest income by lending by our money on deposits and don't have the ability to pay us back when someone defaults on the loan or over-loans and they don't have a plan for it, then Bitcoin is definitely a good   solution will be to get rid of this problem.

[The Cryptovator]

It has become increasingly challenging to trust centralized organizations such as banks or exchanges. The only reliable option to trust when holding Bitcoin is our own non-custodial wallet, where we have complete control. Banks generate a significant amount of revenue from loans, even though the funds are not their own. They use public funds, and when they want to avoid their obligations, they resort to declaring bankruptcy. While Bitcoin addresses several issues, its volatility poses a challenge when it comes to investing all funds in it. Therefore, resolving bankruptcy becomes more difficult in such cases.

[coolcoinz]

Fiat is worthless. Consider a $100 dollar bill. A cheap piece of cloth-paper, with a few pretty pictures on it, and some pretty printed words. True value? Maybe a couple of cents. The $100 value is a figment of the imaginations of a world of people who value it that way.

What about Bitcoin? Even less real value than the fiat. Nothing to really hold in your hand if the electric grid or the Net happen to go down. Nothing to it at all. Only the imaginations of some of the people to give it value.

The question is, what should people be holding as value or valuable? With the world of finance the way it is these days, we need to be considering true and real value, whatever it is.

I've heard this argument multiple times. There's no way to break down the whole electric grid or Internet just like that. If it ever gets damaged and the connection between continents breaks, it's going to get fixed. If there's nobody left to fix it, that's another problem, but in such case we'll be in deep shit anyway and we'll have to barter. Nobody's going to take fiat money, bitcoin, or even coins, unless it's very early in the doomsday scenario.

Bitcoin actually has more value than fiat because it can't be devalued, like they're devaluing every single currency through central bank policies.

[Myleschetty]

The problem with Fractional reserve banking system.

Fractional reserve banking is a type of banking system in which banks keep only a fraction of the total deposits made by customers in reserve, while the rest is available for lending out to other customers or investing.

This means that banks are only required to keep a certain percentage of the deposited money in their bank vault or at the central bank. The remaining money is loaned out to other customers who need the money to finance various activities, such as buying a home, starting a business, or making a large purchase.

Fractional reserve banking allows banks to make profits by charging interest on loans while ensuring that depositors have access to their money whenever they need it. So, they are under the condition to let their customers withdraw mass amount of their deposits, thus creating a crisis.

This is the reason why all the Banks are broken. They are lending out money to people which they don't have or own. And the most concerning thing is counterfeiting. If a normal person does it, then it's a crime, but when the central banks and government does it, they can get away with it. This is the one thing that hurts the economy the most.
When they go bankrupts, the whole pressure is put upon taxpayers. This is a criminal scandal.

Bitcoin could solve all of this. Counterfeiting could be avoided at all cost with this, and bitcoin having limited supply makes it impossible to create more, as they are able to do with fiat currency. Other aspect of Bitcoin is already known to people, so I don't want to talk about those now. All I want to know is, how good is it in terms of preventing these crises. 

What is your view on this?

First, Bitcoin is not the solution or answer to everything. The problem of fiat currency is called by the Central Banks/Fed's mismanagement and unreasonable printing of more fiat currency and there's no way a trillion currency will be printed in a year and it won't lead to inflation. How would Bitcoin solve the problem? Please don't let us be naive.
The problem of an institutional bank is also caused by mismanagement of user funds and I read from the news that the bank problem is not over.

[Uruhara]

One day my brother received a lot of money from the sale of quite large land. it turns out that the money from the sale will soon be bought back on land that is closer to his house. because the land that was sold earlier was indeed too far away and even had to drive several hours to reach it. at that time he received payments in cash and of course because of the large amount of money. so he was worried to keep it at home even for a few days. and the next day he went to the bank and brought the money to be deposited in the bank. he just made savings at that time. because previously he did not have a bank account book. and that day he saved his money in the bank and he automatically had savings with a large amount of money in his account.

 but 2 days later he apparently needed the money back. because it turned out that the owner of the land that my brother was going to buy apparently wanted to speed up selling his land to my brother and my brother also intended to take all the money he kept in the bank that very day.

but when he came to the bank to take money from his savings it turned out that the bank could not immediately hand over the money to my brother. my brother was told to wait a few days and then come back to the bank to collect it. even though at that time my brother needed the money as soon as possible. because apparently he also had an agreement with someone who would sell the land near my brother's house.

before I did not understand why it could be like that. but now I understand that it was possible that at that time the bank did not have enough money in the safe.

I think this is indeed a weakness of the Bank itself. and maybe when we save in the morning then during the day our money is not in their safe. because it may have been loaned or handed over to someone who withdrew his savings.

So it's no wonder that many banks are currently collapsing.

[2double0]

To my basic understanding, banks keep a part of the total money they have been "lent out to", by the people who deposited it and lend the remaining to institutions and invest in real estates, share markets, bonds, mutual funds, etc.
Now, I'm not criticizing anything but putting my point here.
Just take marketcap of a coin for example.
What is marketcap?
Marketcap is the current price of coin * its circulating supply
Fully diluted marketcap is the current price of coin * its total supply

Now, in both things, what matters is the price of the coin.
So basically, marketcap is the virtual total of price*supply, which means that it is not fixed and it means that if the price dumps down or rises up gradually, so will the marketcap. However, having a huge marketcap doesn't mean that the coin has the buyers to absorb a big dump at the very exact average price where it is currently standing.

So, their money is not safe here too, but the issue here is not about exchanges lending out our coins the way banks do with our money, but the value of that thing we put our money in. Even US dollar can collapse based on the news coming from their part and each time they're raising their interest rates to keep US dollar strong but till when?

I'm seeing this as a double-edged sword where we are not guaranteed to get back the value of our money in the future. We say that a dollar is a dollar, but the value of that dollar isn't even worth a cent because the inflation rate has increased that high. And I believe in value, be it of the coin I put my money in, or the money that I put in banks.

It's true that banks may collapse anytime if all of a sudden, people start withdrawing their funds from there and I don't trust them at all, so I keep as much cash on hands as possible. I'm not interested in their cheap interest rates that we can earn in crypto through a single spot trade.

[rahulzx]

To my basic understanding, banks keep a part of the total money they have been "lent out to", by the people who deposited it and lend the remaining to institutions and invest in real estates, share markets, bonds, mutual funds, etc.
Now, I'm not criticizing anything but putting my point here.
Just take marketcap of a coin for example.
What is marketcap?
Marketcap is the current price of coin * its circulating supply
Fully diluted marketcap is the current price of coin * its total supply

Now, in both things, what matters is the price of the coin.
So basically, marketcap is the virtual total of price*supply, which means that it is not fixed and it means that if the price dumps down or rises up gradually, so will the marketcap. However, having a huge marketcap doesn't mean that the coin has the buyers to absorb a big dump at the very exact average price where it is currently standing.

So, their money is not safe here too, but the issue here is not about exchanges lending out our coins the way banks do with our money, but the value of that thing we put our money in. Even US dollar can collapse based on the news coming from their part and each time they're raising their interest rates to keep US dollar strong but till when?

I'm seeing this as a double-edged sword where we are not guaranteed to get back the value of our money in the future. We say that a dollar is a dollar, but the value of that dollar isn't even worth a cent because the inflation rate has increased that high. And I believe in value, be it of the coin I put my money in, or the money that I put in banks.

It's true that banks may collapse anytime if all of a sudden, people start withdrawing their funds from there and I don't trust them at all, so I keep as much cash on hands as possible. I'm not interested in their cheap interest rates that we can earn in crypto through a single spot trade.

agree with you,on the value of money and cryptocurrencies. It's true that the value of both traditional currency and cryptocurrencies can be impacted by various factors, such as news and inflation rates.

Regarding the comparison with banks, while it's true that banks keep a portion of the money they lend out, they are also subject to regulations and protections that aim to ensure the safety of people's deposits.  Investing in cryptocurrencies carries higher risks, as the value of the coins can be more volatile and not backed by any government or regulatory body.

As for the concept of marketcap,think you are correct that it is based on the current price and circulating,total supply of the coin. However, the marketcap can also reflect the overall demand for the coin and its potential for growth. It's important  that investing in cryptocurrencies should be done with caution and research, as it can be a speculative and unpredictable market.

Ultimately, the value of money and investments is subjective and dependent on individual beliefs and priorities.According to previous records, it's important to make informed decisions and weigh the risks and benefits before investing in any asset, whether it be cryptocurrencies or traditional banks. However the cash that we have on our pocket,keep decrease our buying power yearly 

[davis196]

Banks exist since centuries. There were banks in Mesopotamia and Greece 2500-3000 years ago.
Do you suggest that we should dump banks completely? I think that the global economy can exist without banks, but sooner or later, somebody is going to borrow money and someone is going to lend money. Banks going bankrupt is a part of the game. The major problem of the financial system isn't fractional reserve banking. The major problem is the uncontrolled money printing and the moral risk, which it creates. Nowadays, every bank can invest in risky assets, knowing that when "the sh*t hits the fan" the central bank is going to step in and provide unlimited support with newly printed money.
I don't believe that Bitcoin could solve this problem. The majority of the people are just too used to using banks and fiat money. They can't simply switch to Bitcoin/crypto.

[tjtonmoy]

Banks exist since centuries. There were banks in Mesopotamia and Greece 2500-3000 years ago.
Do you suggest that we should dump banks completely?

We can not simply just make something gone out of existence, which has been with us for centuries. Bank is commonly used in every country by 70%+ of their population. And bank is not the problem. But the system is. We can not dump the concept of bank completely.

Nowadays, every bank can invest in risky assets, knowing that when "the sh*t hits the fan" the central bank is going to step in and provide unlimited support with newly printed money.

This is the problem which could be solved with Bitcoin from my POV. Because bitcoin can not be printed unlimitedly as you can do with traditional money. So there's a high possibility that banks will lose their strategy and stop doing something which will lead them towards bankruptcy.

I don't believe that Bitcoin could solve this problem. The majority of the people are just too used to using banks and fiat money. They can't simply switch to Bitcoin/crypto.

We need both of them in the society. That way people will be able to try them both and they can choose by themselves which will suite them better.
And for me, I will choose BTC. Also I will keep banks as a backup as the price of BTC is volatile. So that's what I think.

[CarnagexD]

I don't see fractional reserve banking system as something wrong or illegal like what you're implying. I think it is the exact purpose of banks which is to circulate money in the economy by lending out the rest of the money to borrowers or invest it.

Banks exist since centuries. There were banks in Mesopotamia and Greece 2500-3000 years ago.
Do you suggest that we should dump banks completely? I think that the global economy can exist without banks, but sooner or later, somebody is going to borrow money and someone is going to lend money. Banks going bankrupt is a part of the game. The major problem of the financial system isn't fractional reserve banking. The major problem is the uncontrolled money printing and the moral risk, which it creates. Nowadays, every bank can invest in risky assets, knowing that when "the sh*t hits the fan" the central bank is going to step in and provide unlimited support with newly printed money.
I don't believe that Bitcoin could solve this problem. The majority of the people are just too used to using banks and fiat money. They can't simply switch to Bitcoin/crypto.

I think it is not the printing of money either. It is not the practice for central banks to provide newly printed money directly to banks that are going bankrupt. If they do, it would be so illegal. They just provide liquidity support to banks that are experiencing temporary liquidity problems rather than directly giving them newly printed money. But there was just a case where banks around the world injected large amounts of newly printed money into the banking system to prevent a widespread collapse of the financial system and it was an exemption, controversial, and I think necessary.

What I think plays the huge role in the problem of the financial system is the unequal distribution of wealth. It is very visible in the differences in income, education, inheritance, and access to opportunities in every country.

[GeorgeJohn]

Banks exist since centuries. There were banks in Mesopotamia and Greece 2500-3000 years ago.
Do you suggest that we should dump banks completely?

bank is inevitable, since the existence of banking system corruption is one of the factors bank operates on, and provided that fiat currency with its storage operates in a centralised form they most be a manipulation. The gravity of corruption in the bank can't make people to dump bank because people are used to their system of corruption.

I think that the global economy can exist without banks, but sooner or later, somebody is going to borrow money and someone is going to lend money. Banks going bankrupt is a part of the game.

the point am fishing out here, is that banking getting bankrupt doesn't mean that its as result of people are not depositing money in the bank any longer, but it comes as result of the management using money in the bank for business,  so with this observations of bank managers and it system of banking operations, can make bitcoin to supercedes functionalities of fiat banking system. Actual its becoming reason of thought that global economy can exist without banks.

The major problem of the financial system isn't fractional reserve banking. The major problem is the uncontrolled money printing and the moral risk, which it creates. Nowadays, every bank can invest in risky assets, knowing that when "the sh*t hits the fan" the central bank is going to step in and provide unlimited support with newly printed money.
I don't believe that Bitcoin could solve this problem. The majority of the people are just too used to using banks and fiat money. They can't simply switch to Bitcoin/crypto.

Actually you are making a point here, whereby the masses across the nations has been acclimatised with system of using a fiat currency for daily transactions and it will be very difficult to switch with bitcoin shopping etc, but the reasons while bitcoin can't be use as a means of corrections its because  Bitcoin haven't be generally accepted as a legal tender, but assume all the nations legalise crypto as legal tender it would have been the shortest means  of eradicating banking corruption.

[S A KHAIR]

Banks exist since centuries. There were banks in Mesopotamia and Greece 2500-3000 years ago.
Do you suggest that we should dump banks completely?

We can not simply just make something gone out of existence, which has been with us for centuries. Bank is commonly used in every country by 70%+ of their population. And bank is not the problem. But the system is. We can not dump the concept of bank completely.

Nowadays, every bank can invest in risky assets, knowing that when "the sh*t hits the fan" the central bank is going to step in and provide unlimited support with newly printed money.

This is the problem which could be solved with Bitcoin from my POV. Because bitcoin can not be printed unlimitedly as you can do with traditional money. So there's a high possibility that banks will lose their strategy and stop doing something which will lead them towards bankruptcy.

I don't believe that Bitcoin could solve this problem. The majority of the people are just too used to using banks and fiat money. They can't simply switch to Bitcoin/crypto.

We need both of them in the society. That way people will be able to try them both and they can choose by themselves which will suite them better.
And for me, I will choose BTC. Also I will keep banks as a backup as the price of BTC is volatile. So that's what I think.

In short, why not use both, we are allowed to use both, no one forces us to use only 1. Bitcoin is only a means of payment, it cannot completely replace solutions from banks.

What if you have no money or money in the bank while your bitcoin investment loses 50% of its value? Would you use bitcoin in an emergency and accept losing 50% of its value?

[Obari]

Bitcoin is a decentralized digital currency and just as the name implies, it simply means that one singular person is in charge of your money except just you and with this very concept you'll agree with me that Bitcoin will definitely solve all this problems with banks and fiat.

But now most private exchanges are already acting the same with banks and are illegally tempering with the holdings of their customers, hence the campaign for the use of decentralized exchanges should be considered and the awareness of privacy should be thought more.

In conclusion, Bitcoin with an unlimited supply will definitely help to fight the crisis with fiat and local banks.

[justdimin]

Fractional reserve banking is a banking practice where banks only keep a small portion of their depositors' money in reserve and lend out the rest. Some people have raised concerns about this approach, as it may cause financial instability and systemic risks.

On the other hand, Bitcoin is a unique digital currency that operates on a decentralized system called blockchain. It has a finite supply, meaning that there can only ever be a maximum of 21 million bitcoins in circulation. This helps to prevent inflation and keep the value of the currency stable. Additionally, the advanced security measures used by Bitcoin make it very challenging to counterfeit or manipulate the currency.

One perspective is that Bitcoin is the sole remedy to combat the predicament created by Fractional Reserve Banking, and it provides the ultimate solution to tackle the issue of inflation resulting from uncontrolled expansion of fiat currencies, which can be influenced by the system.

I agree that it has been the main trouble for most financial issues. They rarely have enough money, and the "loan the rest out" means they literally don't have your money. So if all of us put 10 billion dollars into one bank, and they loan 7 billions of that to others, then they have 3 billion left in the bank, so if we all try to withdraw from the bank, what happens? They crash and bankrupt.

This alone is a good enough proof that we shouldn't have it, that's a terrible idea and was never a good thing that can sustain from the very first start. It is there to get banks make more profit, but the risk is too much and shouldn't be done at all. I rather not accept this situation and that's why I am in crypto.

[coolcoinz]

Banks exist since centuries. There were banks in Mesopotamia and Greece 2500-3000 years ago.
Do you suggest that we should dump banks completely?

We can not simply just make something gone out of existence, which has been with us for centuries. Bank is commonly used in every country by 70%+ of their population. And bank is not the problem. But the system is. We can not dump the concept of bank completely.

The example you guys are giving does not apply. Yes, the concept of a bank has existed for centuries and it's inherently good, but the banks that existed centuries ago could not lend money they did not have, because you weren't getting money on a piece of paper as an IOU. You were getting physical money, cash, gold, silver...
Nowadays you're getting electronic money that you don't know if the bank has or not (usually it does not).

The major problem of the financial system isn't fractional reserve banking. The major problem is the uncontrolled money printing and the moral risk, which it creates.

They're both the same kind of problems. Fractional reserve banking and quantitative easing are both fucked up ideas that can never work in the long run.

[Casdinyard]

Bitcoin could very much be the solution to this fractional banking dilemma given the fact that these banks are pretty much uigh and mighty in the grand scale of things, with the ability to hand out loans and create money out of thin air in the process. But this coild only work if a substantial amount of people in this world or the next hold bitcoin in their personal wallet and not on centralized exchanges like a couple knowledgeable blokes in here have already told you, coz the money and the security is directly correlated to how they play with your funds, and judging the FTX cabash from months ago, you know it's jot going to end well.

[Argoo]

Fractional reserve helps banks free up more funds to put into circulation and make more profit. If there are any problems with cash that need to be issued to depositors, interbank assistance is usually involved. Failures in the banking system occur, as a rule, either due to the inept management of funds, or even to the abuse of bank employees. Therefore, failures in the banking system are always temporary, this system is quite stable and always recovers. An important role in its existence is played by the state and its government, which help banks in difficult times. Therefore, banks and their fiat will continue to exist.

[Dickiy]

The banking system may seem like a huge fraud, but whether we like it or not, it will continue to exist and fool us because it's established by the government. With Bitcoin, we can enjoy the freedom we've been wishing for, but unfortunately, we can see how strict the government is with Bitcoin and cryptocurrencies in general.

Although Bitcoin is ideal and could provide transparency, we will not be able to enjoy it if we hope for mass adoption, since we live in a world governed by people who serve their own interests first.

Bitcoin promotes anonymity, but the government wants to make KYC compulsory, which will defeat its purpose.

I think it's natural for the government to support banking because the government needs the bankers, to support state finances in terms of finance for distribution to the community or distribution for matters of state development because basically the government today still trusts the banking system. the second is that the average government still thinks it's old-fashioned, in other words, most government officials today are still ignorant about technology like bitcoin, which most of them consider to be quite complicated, like in my country.
Of course there will be a long debate when talking about KYC and anonymity, because basically KYC is to confirm personal data of communal status for business owners and the state also needs that data to monitor its citizens and guarantee their citizens, while anonymity is more closely related to what decentralization is. offered bitcoin, of course this will also conflict because in general the state is a centralized organization.