If the banks can control people they can control their Bitcoin

[Nothingtodo]

If banks could control Bitcoin, they would have controlled Bitcoin long ago. Banks may be able to control people when it comes to giving loans or keeping money in the bank, but both banks and people are centralized, that is, they can be controlled, but Bitcoin itself is decentralized in nature. Therefore, banks can never control Bitcoin, rather, neither the government nor the central bank of any country can jointly control Bitcoin.

[Lida93]

I'm thinking 🤔, if banks can confuse people to take loan from them using their Bitcoin isn't this breaching decentralisation?
I am not perfect and I am not trying to be, all I care about is knowledge acquirement.

On this one the bank is innocent since it only tries to confuse convince people  about taking loan using their bitcoin as collateral, the bank isn't forcing anyone it's only giving you the option and it's left for the people to see what's important between their financial freedom which they have in accessing and making transactions of their bitcoin at anytime without needing permission and/or that of handing your bitcoin to a third party and indirectly turning yourself back into a centralized form of owning bitcoin which was supposed to be decentralize in ownership and usage.

[ColdLava40]

Centralisation has it's way of controlling and forcing people, if they can get their hands on people then they can control Bitcoin, the real strength of Bitcoin is it's people.

A system like Bitcoin gives everyone the choice to either remain decentralized or rely on centralized services.

Bitcoin was built on the idea of decentralization, but with many institutions and centralized platforms now offering Bitcoin services, the perspective seems to be changing.

Does this make Bitcoin centralized? Not at all.

Banks can offer Bitcoin-related services and even give loans using Bitcoin as collateral, but this does not change Bitcoin itself. Those who choose to rely on banks remain under their control, while those who hold their own private keys maintain control over their funds.

As long as you control your own keys, you can continue to use Bitcoin in a decentralized way, which is what Bitcoin was designed to allow.

[DiMarxist]

Even if Bitcoin is offered as loan to people, I don't think that it will be a problem going forward. Banks can't change the fundamental nature of Bitcoin which has always remain decentralization, what we need to know about banks other other sections who are trying to catch up with crypto which they were against initially is that banks feel that they are missing out . So by giving these types of services they are trying to bring in people to patronize them not not make people to leave Bitcoin, which will be practically impossible at this point in time.

Bitcoin is a technology that operates in dependent from the bank, so I don't see banks changing this point except the technology behind Bitcoin is going to change which will be impossible if you ask me.

[terrific]

if banks can confuse people to take loan from them using their Bitcoin isn't this breaching decentralisation?

Bitcoin remains to be decentralized after that, but it is the system or wherever it is that becomes centralized with its usage.
So, a decentralized asset like Bitcoin when used and held by a centralized platform like the banks doesn't make it centralized.
There's no change for bitcoin per se but the system where it is being used. By using it as a loan collateral, it's now part of the centralized system because it is on their custody but once it's out of it, it remains as is.

[Sanitough]

If banks could control Bitcoin, they would have controlled Bitcoin long ago. Banks may be able to control people when it comes to giving loans or keeping money in the bank, but both banks and people are centralized, that is, they can be controlled, but Bitcoin itself is decentralized in nature. Therefore, banks can never control Bitcoin, rather, neither the government nor the central bank of any country can jointly control Bitcoin.

Most of the banks are centralized and they are completely controlled by the government. Now, knowing the fact that even the government cannot control bitcoin, therefore banks themselves can never control or manipulate bitcoin as well. They could have banned bitcoin completely if they were capable to.

People are not the same as bitcoin, we are bound to follow those centralized rules made by the government and banks. We can be controlled by banks somehow and sometimes fall on their traps, but that does not mean that we don't have the right to decline the offer or stick with our own decisions as long as it does not bypass the law.

[Curious T]

The aim of the bank allowing people to borrow against their bitcoin is not to take everybody's bitcoin. The aim of the bank is to make profit and get more of a target audience. Everybody cannot give up their bitcoin at the same time, and it's not like they are giving up the bitcoin for the bank to hold, it is for a loan. If they pay the loan, the bank has no control over their bitcoin. I am indifferent about the idea, but it would be nice for bitcoiners to do what wealthy people do with their assets when they borrow against it and don't have to pay taxes. It's not like a lot of people will use it, but it might help people who hold a lot of bitcoin when they want to sell for a project.

[Maslate]

Centralisation has it's way of controlling and forcing people, if they can get their hands on people then they can control Bitcoin, the real strength of Bitcoin is it's people.

The bank does not force people to pledge their Bitcoin. Everyone who owns Bitcoin has the choice to hold their own Bitcoin. You yourself said that the true power of Bitcoin lies in its users. The government through the bank certainly cannot follow a decentralized system, but Bitcoin users have their own choices. But surely you know, there are Bitcoin holders who may not care about centralization and decentralization. They just buy and make a profit.

Sad reality. Some people do not care about decentralization of bitcoin. What matters more to them is how to make instant profits from bitcoin. And that is not far from reality that these kind of people will definitely be biting the offer of the bank and use their bitcoin as a collateral. As long as they are seeing quick profits, they wouldn't mind even if they'll lose their bitcoin in the end. If majority of bitcoin holders will be like this, surely banks can easily control the people and their bitcoin holdings.

[moneystery]

Bitcoin, without it's people is nothing, if everyone decides to give up on Bitcoin in a go it will affects Bitcoin, on the other hand, if the banks can control the people, what's left for Bitcoin ?

It is unlikely that everyone will give up their Bitcoin and then entrust it entirely to banks. There are still many people who continue to hold Bitcoin or transact with it on the network, so there is no need to expect that everyone will entrust their Bitcoin to banks.
Moreover, not everyone needs a loan, and not everyone is willing to collateralize their Bitcoin for a loan, considering its potential value and the amount of money they would receive (since bank loans with Bitcoin use LTV). People might be more inclined to consider getting a regular loan, without involving their Bitcoin, where it makes more sense and does not effect their Bitcoin.

[Japinat]

Bitcoin, without it's people is nothing, if everyone decides to give up on Bitcoin in a go it will affects Bitcoin, on the other hand, if the banks can control the people, what's left for Bitcoin ?

Not all people are dumb enough to give up their bitcoin and give their full custody to the bank. Just like as not all people can be controlled by the bank, as banks should only offer financial and loan services to the people, not to control them and manipulate their money deposits.

And what's the point that bitcoin is decentralized? As long as there are people who still chose bitcoin over fiat, or diversify their assets through bitcoin and fiat, bitcoin will keep going and will continue to increase its demand though with limited supply.

[Nothingtodo]

There is a way with the government and the central bank where the government can arrest us and forcibly confiscate our bitcoins. Or they can bring investors from countries where bitcoins are illegal under the law and hold them accountable and confiscate bitcoins. Similarly, if the government gives permission to the central bank to confiscate bitcoins, then perhaps the central bank can forcibly take access to our bitcoins. Moreover, the central bank cannot control our bitcoins in any other way.

[Yamifoud]

It will when the person hands over their password. But could you agree to that and let the bank control your Bitcoin? That is a question, and it depends on the bank's agreement. You can agree to it, but of course, the bank doesn't force you to follow their terms.
If I had another option, I would not consider Bitcoin first as collateral. In fact, don't ask if we have Bitcoin unless we tell them and offer it. It is not the bank controlling people. It just happened that we let them control us because we allowed it.

[OsaiEmma]

I'm not trying to take a side here, we are all here to lecture ourselves about Bitcoin and crypto, and since few discussions about Bitcoin and Banks have been coming on recently due to the fact that banks will start giving loan services to Bitcoin holders ...

Well, I think it's not all that bad, it will somewhat encourage adoption: imagine people going to buy Bitcoin so they can be eligible for a loan

I'm thinking 🤔, if banks can confuse people to take loan from them using their Bitcoin isn't this breaching decentralisation?
I am not perfect and I am not trying to be, all I care about is knowledge acquirement.

Decentralization is when no one individual/entity is in control. With this description, I don't see how loan offers for Bitcoin discourages decentralization. They don't control your Bitcoin, once you repay your loan, you get back your Bitcoin.

Bitcoin, without it's people is nothing, if everyone decides to give up on Bitcoin in a go it will affects Bitcoin, on the other hand, if the banks can control the people, what's left for Bitcoin ?

Centralisation has it's way of controlling and forcing people, if they can get their hands on people then they can control Bitcoin, the real strength of Bitcoin is it's people.

You're right, the users are a very vital part of Bitcoin's economy. And whosoever controls that aspect probably controls a very large/influential part of Bitcoin's economy. But loan services/offers for Bitcoin doesn't mean control though, or is there some other mechanism/device at play here?

If you're talking about Centralization, it's very dangerous especially for Bitcoin ecosystem. To much centralization especially in terms of custody can produce great influence. But I don't see this happening with just the loan discussion in this thread. OP, I feel you're just blowing things out of proportion.

[Localhostspeed]

There is a way with the government and the central bank where the government can arrest us and forcibly confiscate our bitcoins. Or they can bring investors from countries where bitcoins are illegal under the law and hold them accountable and confiscate bitcoins. Similarly, if the government gives permission to the central bank to confiscate bitcoins, then perhaps the central bank can forcibly take access to our bitcoins. Moreover, the central bank cannot control our bitcoins in any other way.

I have not seen any bank will provide that is will compel me to want to use a bank even if they promised a Bitcoin airdrop. The government controls the banks and that way the governments controls the people, if the governments have interest in you, your investment in banks whether it's raw Bitcoin and paper money, you are powerless. As a Bitcoin holder, you don't have any business holding Bitcoin with a custodial services.

There is nothing bad if the banks want Bitcoin adoption, but that should be shoulder from their pocket. They should do Bitcoin reserves like they have dollar reserves in their banks. It will strengthen their system even more but I guess the central bank will not allow this to happen under their watch. They will not let our ideas flourish under their watch.

[As-Soon-As]

It will when the person hands over their password. But could you agree to that and let the bank control your Bitcoin? That is a question, and it depends on the bank's agreement. You can agree to it, but of course, the bank doesn't force you to follow their terms.
If I had another option, I would not consider Bitcoin first as collateral. In fact, don't ask if we have Bitcoin unless we tell them and offer it. It is not the bank controlling people. It just happened that we let them control us because we allowed it.

Yes, that is exactly what we have allowed, but if you work according to the conditions that the banks will give, then it will definitely be very risky for you. Until people deposit their Bitcoin wallet seed with the bank, no one has the power to control Bitcoin, because I will not agree to this condition in any way, no matter how much danger the situation poses to me. But we are gradually allowing all these useless things, due to which this will become an obstacle for us in the future. So we must think about the future and we will hold Bitcoin ourselves and try to keep it for a long time.

[Sandra_hakeem]

~snip

It is not control, it is coercion.

Some are weaker to coercion than others and willingly give up their freedom and control of their money just because they got scared. And it is quite understandable as to why someone would break under pressure. We are all only human after all.

If the pressure can break them, maybe they have no business with decentralization in general then? The message came, was accepted and preached but even thereof, not everyone can tap into that frequency.

That is why Bitcoin has such an important role. Especially in order to replace the old fiat system, Bitcoin needs to show the uneducated masses the freedom of decentralization and privacy.

I like how you ended this with the citation to how many are still illitrate, but own Bitcoin and to what degree that can hurt the system more if it doesn't change in the future. Perhaps these people have been enslaved for so long that they are scared of freedom? Due to long-term dependency on the government of the security of their funds, they now have the survival instinct of a sloth.

[YOSHIE]

Centralisation has it's way of controlling and forcing people, if they can get their hands on people then they can control Bitcoin, the real strength of Bitcoin is it's people.

Although banks can control humans because humans basically depend on bank infrastructure such as freezing accounts, credit scores, through debt/loans and so on, but Banks will not be able to dictate or change Bitcoin's basic code, Banks cannot control Bitcoin in the same way they control humans.

The power of Bitcoin is in the Bitcoin network itself, Bitcoin cannot be regulated by banks, because Bitcoin is regulated by computer code and a global network of computers (nodes) spread throughout the world, In short, even though people all over the world are controlled by banks or humans no longer exist on this earth, as long as the internet network and miners' computers are still running, Bitcoin continues to run Bitcoin basically does not depend on physical humans to operate it, in fact the Bitcoin system is designed using programming code, so it has no effect if the Bank controls everyone in this world, Bitcoin continues to run, When humans no longer create new transactions, all Bitcoins will be stored in their respective final wallet addresses, only the price will not be as expensive as it is now.

[ruykeri]

The aim of the bank allowing people to borrow against their bitcoin is not to take everybody's bitcoin. The aim of the bank is to make profit and get more of a target audience. Everybody cannot give up their bitcoin at the same time, and it's not like they are giving up the bitcoin for the bank to hold, it is for a loan. If they pay the loan, the bank has no control over their bitcoin. I am indifferent about the idea, but it would be nice for bitcoiners to do what wealthy people do with their assets when they borrow against it and don't have to pay taxes. It's not like a lot of people will use it, but it might help people who hold a lot of bitcoin when they want to sell for a project.

It is necessary to first get a proper idea about how many popular banks in the world and in how many countries are providing loans by using bitcoin as collateral. Although such a loan service is provided, perhaps very few banks have actually started it. I had seen such news before, where banks have decided to provide loans using bitcoin as collateral. But if this is to be implemented normally the volatility of the price of bitcoin will create more problems. Because banks will give loans considering the value of the asset according to the price of bitcoin at that time. Maybe for the convenience of the bank, they will value bitcoin 30% less than its real value at that time. But in reality if the price of bitcoin continues to decrease further after a few days, then the bank will definitely feel some risk. And normally, to take a loan from a bank, you have to keep the assets you have with you as collateral with the bank through paperwork. Now, if you take a loan from a bank through bitcoin, the person must send the bitcoin directly to the wallet that the bank owns. Apart from that I do not find any other way where the bank will take control of that person's bitcoin. Then maybe they can give a loan to the person based on the value of that bitcoin. This will have a negative impact on the main feature of bitcoin, where bitcoin's decentralization and security issues. Although this is not a universal problem, only for the person who is thinking of taking a loan through bitcoin. However if this type of system is introduced in all banks, in all countries, I myself will not see it as a negative. Because this is also a kind of adoption of bitcoin, which will increase the acceptance of bitcoin by people.

[Orpichukwu]

Centralisation has its way of controlling and forcing people, if they can get their hands on people then they can control Bitcoin, the real strength of Bitcoin is its people.

They are not forcing the people; what they are doing is offering a service to the people. It's left for us to decide if we are going to take a loan and give out our Bitcoin to them, and it’s those who give away the Bitcoin that have given them freedom to take over. Aside from that, they can’t force your hand from what’s under your self-custody wallet.

[uneng]

I'm thinking 🤔, if banks can confuse people to take loan from them using their Bitcoin isn't this breaching decentralisation?
I am not perfect and I am not trying to be, all I care about is knowledge acquirement.

Banks are controlling people's Bitcoin since the moment they offer crypto investments, but don't allow the customers to withdraw their cryptocurrencies to their personal private wallets. Loans against BTC become a detail if we take that into consideration.

Imagine paying for BTC, but not truly owning it. That is how banks introduced crypto to their ecosystems.

Anyway, it doesn't mean decentralization was nulled. People can still acquire Bitcoin P2P, without using banks as middleman and holders. For those who value decentralization there is still an alternative, and that is the bright side of this situation.