Bitcoin vs Bank

[ndutndut]

I have seen the Bitcoin and Bank thread for a donkey time in this forum, but no matter how often I see it, I do not scroll past because I know that there are alot of developments and new things are coming into the industry.
Op tried to create a scenario between the traditional bank we know and the bitcoin bank. I began to wonder what is meant by bitcoin bank. Does bitcoin have it's own bank? Of what essence.

One of the objectives of bitcoin is to save the unbanked. But I do not want a situation where bitcoin will be referred to as bitcoin bank or whatever. Let's leave the bank out of this and face bitcoin.

I'm also puzzled by the OP thread. Why is Bitcoin forced to have a bank? Doesn't Bitcoin have the advantage of decentralization, which isn't regulated by a central bank, government or any single central entity?

In fact as you said, one of Bitcoin goals is to provide a solution for the unbanked, as it allows them to access all of that. Bitcoin transactions are uniquely verified only through the blockchain, enabling direct transfers that are secure, transparent and censorship-resistant. So, with these advantages you are your own Bitcoin bank, so in my opinion there's no need for a Bitcoin bank. In fact, with a Bitcoin bank, the decentralized nature of Bitcoin would be lost, wouldn't it?

[Mr wine]

We already know bitcoin is a decentralised system of transactions, this is just like saying they should centralise bitcoin by creating banks like the normal banks . and also bitcoin are minned by thousands of user's all over the globe, so does that mean you are saying everyone should own a bitcoin bank?

And then for the normal banks they exist for the purpose of making money and related materials keeping easy and safe for both the user's and their percentage benefit, i don't see any need for a bitcoin bank to be established and if there's any need it should just be one to just be like an headquarters for issues reporting and regulations policies to be physically presence to access.

[kawetsriyanto]

I agree, I also think that the bank's purpose in offering cryptocurrency service is profit. They are not necessarily just trying to control their customer, as many people think. They do not need to do that because, as you said, eventually those who invest in Bitcoin will have to convert their Bitcoin to fiat anyway

Yep. They don't need to control it because they can get the advantage from another way. People who have crypto assets, they will withdraw it to fiats. So, those people will also keep using bank accounts. In this way, banks will also get profits although they don't do anything to the crypto users. Even, banks will get more advantages if they offer crypto services. It is because this way will attract for more crypto users to come.

As long as fiat remains the main unit of account, we cannot escape our dependence on bank. The banks are well aware of that.

Sure, banks are very aware of that fact. We can't fully use Bitcoin or crypto for any aspect. In some countries, Bitcoin or crypto coins still can't be a payment tool. So, there is no way that people must convert it to fiats. And this means people still depend on banks.

Besides diversifying our investment portfolio, we also need a backup plan for our asset. Sharing seed phrase or inheriting bank account with close relatives is something that should not be overlooked. Because unexpected situation can arise, and if we are not prepared. Assets can be lost permanently, and loved ones may no longer have access to them.

Exactly. That backup plan is also needed. Unexpected situations can happen at any time. So, we need to share our data to the close people who we can trust. If we don't do this, our assets are possible to lose forever once there is something bad happening with us.

[BADecker]

Rats will use the bank (river bank). They can't even imagine a Bitcoin.

[BluebloodCXVI]

When there is competition everybody becomes serious and at this point we haven't seen any thing that would make Banks sit up in some areas they are not doing well. Let's say every country in the world they have legalized the use of Bitcoin and it have a Bank like our normal Banks we know. There are some issues we face at the Bank that when it comes to Bitcoin Bank it won't be the same like Bitcoin Bank will gain more customers than the normal Banks, transactions will be faster than ever. The issue of standing for the whole day at the Bank won't be the same with Bitcoin Bank, the process of doing things would be faster than that of our normal Banks. With all these, would the presence of Bitcoin Banks make our normal Banks sit up?

This whole idea of yours seems to defeat the sole purposes for which bitcoin was created in the first place, and one of which is the power of decentralization. I’ve never heard of a bitcoin bank and i doubt they exist but if they ever did, then there wouldn’t be any much difference between them and a normal bank because it will become centralized and always require third party discretion and this doesn’t align with the purpose of bitcoin at all.
Bitcoin itself was designed to overcome the need for banks, so once you introduce a bitcoin bank, then you are basically re-introducing an intermediary custody, compliance, KYC, support desks e.t.c, and all these things are what traditional banks already deal with, so what is the need for a bitcoin bank again ? It will only complicate things.

[knowngunman]

With all these, would the presence of Bitcoin Banks make our normal Banks sit up?

What are we comparing here? 

Bitcoin is an asset. Bank is an institution. Bitcoin is money (best synonym I can think of) Bank is where you keep this money. How do we really end up pushing for this unnecessary comparison?

Let say there's Bitcoin bank as you imagine, you expect people to create wallets under the care of those working there the same way people create accounts with banks? Who control the private key for the wallet you create with them?

Who owns this Bitcoin bank if they exist? Answerable to who? Bitcoin will lose it privacy purpose and become centralised instead of decentralized? I don't know if there's a better way you'll make me understand how Bitcoin bank will operate because I don't really understand anything yet.

[UchihaSarada]

What are we comparing here? 

Bitcoin is an asset. Bank is an institution. Bitcoin is money (best synonym I can think of) Bank is where you keep this money. How do we really end up pushing for this unnecessary comparison?

Let say there's Bitcoin bank as you imagine, you expect people to create wallets under the care of those working there the same way people create accounts with banks? Who control the private key for the wallet you create with them?

Who owns this Bitcoin bank if they exist? Answerable to who? Bitcoin will lose it privacy purpose and become centralised instead of decentralized? I don't know if there's a better way you'll make me understand how Bitcoin bank will operate because I don't really understand anything yet.

Bitcoin (blockchain) should be compared with Bank system. bitcoin (currency on Bitcoin blockchain) should be compared with fiat currencies. Bitcoin non custodial wallets should be compared with bank accounts. I believe that these three comparisons are more accurate by comparing things that have similar functions for societies and people.

With Bitcoin non custodial wallets, people have private keys that allow them fully control their Bitcoin wallets and bitcoins. Some people consider it as Bitcoin banks, they say "with Bitcoin private keys, you have your own Bitcoin banks". That's opposite with banks and bank accounts as you can have access to your bank accounts while don't have access and don't control your money in banks.

[PhilosopherKing]

No matter how much people keep their money in banks, thinking that they are safe, I have already seen an incident on social media, this incident has shaken my heart. Perhaps it is an incident that happened in India, I saw on social media that Social Media X could not withdraw money from the bank, but instead came to the bank with his dead sister who died a few months ago. But how easy and confidential is the transaction of Bitcoin. So I do not believe in banks in any way, it is just to harass people, so it is much safer to keep money in Bitcoin than keeping money in the bank.
Social Media x: https://x.com/i/status/2048989530452377610

This is a heartbreaking incident that happened in India recently where to withdraw money from his dead sister's bank account, all the documents are required which is impossible for an illiterate brother to provide. For this, he packed his brother's skeleton and appeared in the bank to prove his sister's death. If this brother had kept dollars in Bitcoin, then maybe he would not have faced such harassment in the bank. People are gradually losing interest in banks and if they give such trouble, people will stop keeping money in the bank completely.

Anything that bank offer bitcoin will offer that and more and better. Every person know that they can store their money in bank for long time. Bitcoin can also do that, the difference is that bitcoin will store your money and make it not to loose value like your money in bank will be doing.  Nobody control bitcoin, it is decentralized and offer a lot of things that bank cannot offer.

See the stress that the bank out that person through. And with all stress that bank is giving to people, very soon all person will quit using bank and switch completely to BTC

[summonerrk]

When there is competition everybody becomes serious and at this point we haven't seen any thing that would make Banks sit up in some areas they are not doing well. Let's say every country in the world they have legalized the use of Bitcoin and it have a Bank like our normal Banks we know. There are some issues we face at the Bank that when it comes to Bitcoin Bank it won't be the same like Bitcoin Bank will gain more customers than the normal Banks, transactions will be faster than ever. The issue of standing for the whole day at the Bank won't be the same with Bitcoin Bank, the process of doing things would be faster than that of our normal Banks. With all these, would the presence of Bitcoin Banks make our normal Banks sit up?

Looking at the centralized state of exchanges, I no longer believe that banks can successfully transform into a place where Bitcoin feels anonymous and free. Knowing our government and the wealthy, we all constantly see them asking us for document verification or trying to charge us extra fees. Basically, the point is that the people above us, the ones who run the banks, exchanges, and the government, constantly want to get our data and know all the ways we spend our money, while completely destroying anonymity and the very ideas that Bitcoin is built on.

[Minor Miner]

What are we comparing here? 

Bitcoin is an asset. Bank is an institution. Bitcoin is money (best synonym I can think of) Bank is where you keep this money. How do we really end up pushing for this unnecessary comparison?

Bitcoin is not just an asset. It is also a decentralized monetary system, whereas bank are a centralized system. Therefore, comparing them to find the advantages and disadvantages of both is perfectly reasonable and necessary. In this way, we can better understand how each system work and use them flexibly for different purposes.

However, the notable point is that people make biased and unfair judgment.This makes comparisons between the two system less appealing and leads to unnecessary argument.

[Zanab247]

waiting for the day banks accept btc for mortgage and can turn it to cash with no tax

Not that some governments don't know that it will benefit citizens that will get involve in BTC when government make it legal, because that is what some companies and some individuals are waiting for before they will begin to show interest in BTC. But the fear that is coming government officials is that BTC will stop their fiat money not to be popular in the country which is not true, just that some bank officials know that many people will show interest in BTC than bank.

We all know that government is the one controlling the Central bank and other banks in a country, and if they decide to pass the law for bank to accept BTC that is final and it will stand till another government take over power to decide to continue with the past government or to change some constitution toward BTC.

[purple_sparkles]

What are we comparing here? 

Bitcoin is an asset. Bank is an institution. Bitcoin is money (best synonym I can think of) Bank is where you keep this money. How do we really end up pushing for this unnecessary comparison?

Bitcoin is not just an asset. It is also a decentralized monetary system, whereas bank are a centralized system. Therefore, comparing them to find the advantages and disadvantages of both is perfectly reasonable and necessary. In this way, we can better understand how each system work and use them flexibly for different purposes.

However, the notable point is that people make biased and unfair judgment.This makes comparisons between the two system less appealing and leads to unnecessary argument.

At the moment, banks are focused on trying to maximize control over all financial transactions of their users, and this discourages cooperation with these institutions. When you deposit money into a bank account, it no longer feels fully under your control, as banks continue to introduce more regulations, sanctions, and simple restrictions. In this context, bitcoin clearly has an advantage.

[kawetsriyanto]

Bitcoin is not just an asset. It is also a decentralized monetary system, whereas bank are a centralized system. Therefore, comparing them to find the advantages and disadvantages of both is perfectly reasonable and necessary. In this way, we can better understand how each system work and use them flexibly for different purposes.

Comparing between Bitcoin and banks is okay, but claiming one of them is better seems unwise. We only need to realize the advantages and disadvantages, so we can take benefits from both banks and Bitcoin. Sure, they have their own purposes and they will function to complement each other. They aren't intended to remove one of them. The existence of Bitcoin isn't for replacing banks.

At the moment, banks are focused on trying to maximize control over all financial transactions of their users, and this discourages cooperation with these institutions. When you deposit money into a bank account, it no longer feels fully under your control, as banks continue to introduce more regulations, sanctions, and simple restrictions. In this context, bitcoin clearly has an advantage.

Banks has controlled the financial of all people for a long time. I'm not sure that they are trying to improve it nowadays. 
It isn't banks which have the power to make such regulation and impose sanction/restriction. This is the role of the governments.
By the way, I'm not sure what context you mean. But Bitcoin surely gives the choice for the people to be more independent.

[Danica22]

At the moment, banks are focused on trying to maximize control over all financial transactions of their users, and this discourages cooperation with these institutions. When you deposit money into a bank account, it no longer feels fully under your control, as banks continue to introduce more regulations, sanctions, and simple restrictions. In this context, bitcoin clearly has an advantage.

Banks has controlled the financial of all people for a long time. I'm not sure that they are trying to improve it nowadays. 
It isn't banks which have the power to make such regulation and impose sanction/restriction. This is the role of the governments.
By the way, I'm not sure what context you mean. But Bitcoin surely gives the choice for the people to be more independent.

Yes, we never had full control over our asset when we deposited in a bank, and that is been the case for a long time. They never changed that or tried to tighten it, it was only since Bitcoin came along and the concept of decentralization was introduced. We gradually realize that when we deposit into a bank, we do not actually own those assets.

Bitcoin help us better understand centralized system and offer us an alternative solution.

[Renampun]

I don't really understand the Bitcoin bank you are saying, because from what I see the government does not really support Bitcoin being legalized into a technology that will replace the role of banking, in fact now Bitcoin is seen more as a store of value. so banks will still be empowered since they get full government support, meanwhile, we will only see that bitcoin will be a store of value or as an alternative to payments, not a digital banking like you imagine.

[Abiky]

What are we comparing here? 

Bitcoin is an asset. Bank is an institution. Bitcoin is money (best synonym I can think of) Bank is where you keep this money. How do we really end up pushing for this unnecessary comparison?

Let say there's Bitcoin bank as you imagine, you expect people to create wallets under the care of those working there the same way people create accounts with banks? Who control the private key for the wallet you create with them?

Who owns this Bitcoin bank if they exist? Answerable to who? Bitcoin will lose it privacy purpose and become centralised instead of decentralized? I don't know if there's a better way you'll make me understand how Bitcoin bank will operate because I don't really understand anything yet.

Actually, we already have so-called "Bitcoin banks". They're essentially centralized exchanges, which act as "custodians" of your hard-earned Bitcoin. I mean, they're responsible of storing and securing the private keys/seeds associated with your Bitcoin balance. You'd just deposit, trade, and forget about the rest.

What CEXs are missing is greater regulatory compliance. They're not as regulated as ordinary banks. I don't see any use for a "Bitcoin bank" since you can already become your own bank. Such institutions will only make BTC less-decentralized. Is that what we want? I hope not. Otherwise, it will be "bye-bye" to the "crypto revolution" for good.

[AmoreJaz]

I don't really understand the Bitcoin bank you are saying, because from what I see the government does not really support Bitcoin being legalized into a technology that will replace the role of banking, in fact now Bitcoin is seen more as a store of value. so banks will still be empowered since they get full government support, meanwhile, we will only see that bitcoin will be a store of value or as an alternative to payments, not a digital banking like you imagine.

Hard to have that kind of scenario because btc is decentralized, thus, no one can really control this market. What the government can do is to regulate this market but they don't have full control of the totality of this market.

We can say that we still need the traditional banking per se because of so many financial transactions. Just accept the fact that crypto or bitcoin is already penetrating the major financial market. So treat it as just another currency, nothing special. And regulate it just like another currency.

[Vaskiy]

I don't really understand the Bitcoin bank you are saying, because from what I see the government does not really support Bitcoin being legalized into a technology that will replace the role of banking, in fact now Bitcoin is seen more as a store of value. so banks will still be empowered since they get full government support, meanwhile, we will only see that bitcoin will be a store of value or as an alternative to payments, not a digital banking like you imagine.

Hard to have that kind of scenario because btc is decentralized, thus, no one can really control this market. What the government can do is to regulate this market but they don't have full control

As said the governments focus into regulating the market and understanding the rising popularity of bitcoin as an investment, they will add it to the available services. Apart from this, banks to completely function with bitcoin is not a nearby change. Also, governments always want control over its citizen's finance. This is not possible with the bitcoin. As of now more stores have begun to accept crypto into payments which is a great move. When it comes to transaction, banks provide fast service and it isn't like what is being said in the OP. The long waiting happens in banks when we go for some loan or something else.

[colinistheman]

I don't really understand the Bitcoin bank you are saying, because from what I see the government does not really support Bitcoin being legalized into a technology that will replace the role of banking, in fact now Bitcoin is seen more as a store of value. so banks will still be empowered since they get full government support, meanwhile, we will only see that bitcoin will be a store of value or as an alternative to payments, not a digital banking like you imagine.

Even if the government actually support and legalizes Bitcoin to create  Bitcoin bank to replace traditional bank. This means that Bitcoin banks will be managed and regulated under the supervision of the state. This also means they are centralized entities and go against the original core philosophy of bitcoin.
Therefore, it can be said that the idea of ​​a bitcoin bank is a bad idea. Because in the end we cannot escape government scrutiny.

[dansus021]

Did you know that lot of largest US banks are now developing Bitcoin products, and many major institutions like JPMorgan and Goldman Sachs already offer Bitcoin ETFs, custody, and lending services.

Any bank that still makes you stand in line for 4 hours while they process paper forms is already losing to institutions that use Stablecoins and Tokenization to settle transactions in seconds. Visa already did it with USDC. In the other hand Banks are now turning real-world assets into digital tokens to stay competitive, making things like real estate or stocks trade as easily as Bitcoin.