If the banks can control people they can control their Bitcoin

[Loyang]

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.

Banks will never start any process without their own profit and banks will never be stuck with a customer, rather a customer is stuck with the bank, all the rules of the bank are made in this way. I personally will never decide to take a loan by depositing Bitcoin. Because one of the biggest reasons for me to accept Bitcoin is decentralized financial management and financial independence. If we deposit Bitcoin with someone else, then the purpose for which I bought Bitcoin will be broken.

I completely agree with what you said. Maybe we have to deposit the wallet seed or deposit our Bitcoins in the bank's wallet. Maybe the bank will be willing to keep our Seed Phrase so they will keep the Bitcoin in their wallet

[Bitcoin_people]

Basically, if people stop using Bitcoin, then of course there will be a big impact on Bitcoin. But if you think so, then you are wrong because people will never want to get away from financial freedom, rather they will remain related to Bitcoin and keep their financial position strong. Most people currently do not like banks, they invest in Bitcoin for their financial development and to protect their privacy. If loans are given from banks for Bitcoin, this does not mean that Bitcoin customers will decrease, although this is very unlikely. Moreover, when someone takes a loan from a bank, they must verify their complete identity and there will be no privacy protection. And if people become dependent on the bank's permission to use their BTC even after owning Bitcoin, then they will not be able to enjoy financial freedom. In that case, we know that Bitcoin is an independent currency, so banks will not be able to control Bitcoin in the future, and Bitcoin users know that their own identities are hidden by using it and investing in Bitcoin is very safe.

[7juju]

Using your bitcoin as collateral is a choice, banks are not forcing anyone to use their bitcoins as collateral. Decentralization will not be affected and there is no way that every bitcoiner is going to give up his bitcoins for fiat loans all at thesame time like you are insinuating in the op.

I have already said this before about bitcoin collateral, if you have another suitable asset, using bitcoin as collateral will not be neccessary. The only reason I am in support of such an idea is because, it will save you from selling your bitcoins when you are not ready to do so.

It doesn’t really make any sense for me to use one’s bitcoin to take a loan. If I’m in need of money that I have to take a loan using my bitcoin. I would rather sell some portion of my bitcoin to raise the money. When I get the money back in the future I buy back the bitcoin. It’s not as if the bank will give you a loan that’s bigger than your bitcoin holdings. Just sell your bitcoin, fix whatever problems you have, buy back when you have money, that is far more convenient for me.

[Rabata]

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.

We must first review this issue, why is Bitcoin so popular?. The purpose of creating Bitcoin was to create a financial system where an individual can trade his assets without any third party. An individual will have the opportunity to store and trade money independently without central control, but when a bank gives a loan after taking information about a person's Bitcoin, then his financial freedom will definitely be reduced. If someone else controls his Bitcoin, then what is the benefit of using Bitcoin? However, not everyone will try to take advantage of this. Those who are prudent and consider their own security will never give their Bitcoin to someone else, no matter how trustworthy they are. Moreover, the advantage of being anonymous using Bitcoin will no longer be there. Those who want to lose their freedom consciously that is their decision.

[Ayers]

Using your bitcoin as collateral is a choice, banks are not forcing anyone to use their bitcoins as collateral. Decentralization will not be affected and there is no way that every bitcoiner is going to give up his bitcoins for fiat loans all at thesame time like you are insinuating in the op.

I have already said this before about bitcoin collateral, if you have another suitable asset, using bitcoin as collateral will not be neccessary. The only reason I am in support of such an idea is because, it will save you from selling your bitcoins when you are not ready to do so.

It doesn’t really make any sense for me to use one’s bitcoin to take a loan. If I’m in need of money that I have to take a loan using my bitcoin. I would rather sell some portion of my bitcoin to raise the money. When I get the money back in the future I buy back the bitcoin. It’s not as if the bank will give you a loan that’s bigger than your bitcoin holdings. Just sell your bitcoin, fix whatever problems you have, buy back when you have money, that is far more convenient for me.

selling your bitcoin to deal with a problem and buying it back later might be more convenient but that only works if Bitcoin  doesn't climb much while you are waiting to buy back in. if bitcoin  takes off, you'll have to pay more to get same amount back, you might not even be able to afford to buy back what you sold.

neither selling your bitcoin  nor borrowing against it is always the better move. it come down to your financial situation and what each option would actually cost you.

[Yandakava]

There’s no way banks control people. Depending on banks doesn’t mean the bank can control people, you get the choice to do whatever you want. In a situation where people start to depend on banks to get a loans using their bitcoin as a collateral, then tell me where the banks control them? You still have your bitcoin in your wallet and the private keys to control your wallet. The other thing is that depends on what the individual do with the loan they took from the bank. If you use your Bitcoin as a collateral, when the repayment date comes up, if they don’t get the money, then they have no other option but to hand over the Bitcoin to the bank. Since it what they use as the collateral.

[vs2014]

When it comes to using Bitcoin as collateral for bank loans, i think it has both advantages and disadvantages. People can have money during emergency without selling their bitcoin which is a good thing for holders. But the main concern is, the owner may lose direct access of his asset and if Bitcoin price dumped, then the lender may sell Bitcoin to recover loan amount. I don't think it can directly affects Bitcoin's decentralisation. But it was a good idea requires knowledge, responsibility and control over own funds to protect it.

[alastantiger]

]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.

The bank can control people Bitcoin by opening wallets for them or becoming a wallet provider and then give people opportunity to buy Bitcoin directly from them and people will do thaf thinking that they own their Bitcoin but they do not. Banks are trusted by many people and if they tell them to open an account with them, they would not hesitate to do that and the banks knows this but waiting on the government to give approvals before they start offering people the safety of keeping their Bitcoin with them just as how their faits money are with them and people will still fall for this tricks and trust the banks again. All they have to do is control the narrative to be trusted.

[Floxynice]

Using your bitcoin as collateral is a choice, banks are not forcing anyone to use their bitcoins as collateral. Decentralization will not be affected and there is no way that every bitcoiner is going to give up his bitcoins for fiat loans all at thesame time like you are insinuating in the op.

I have already said this before about bitcoin collateral, if you have another suitable asset, using bitcoin as collateral will not be neccessary. The only reason I am in support of such an idea is because, it will save you from selling your bitcoins when you are not ready to do so.

It doesn’t really make any sense for me to use one’s bitcoin to take a loan. If I’m in need of money that I have to take a loan using my bitcoin. I would rather sell some portion of my bitcoin to raise the money. When I get the money back in the future I buy back the bitcoin. It’s not as if the bank will give you a loan that’s bigger than your bitcoin holdings. Just sell your bitcoin, fix whatever problems you have, buy back when you have money, that is far more convenient for me.

Will you still be comfortable selling your bitcoins at a loss during the bearish season? What then was the essence of hodling if you are going to sell at every little emergency you have? You should rather save in stablecoins or diversify your sources of income so you don't have to consider selling your bitcoin at the wrong time.

It is really possible for you to sell your bitcoins in an emergency and buy them back later when you have the money. But know that there is a chance you may not get a perfect entry price again. Like I said before, it's a choice, so do what you think is best for you.

[Iamgoat]

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.

We must first review this issue, why is Bitcoin so popular?. The purpose of creating Bitcoin was to create a financial system where an individual can trade his assets without any third party. An individual will have the opportunity to store and trade money independently without central control, but when a bank gives a loan after taking information about a person's Bitcoin, then his financial freedom will definitely be reduced. If someone else controls his Bitcoin, then what is the benefit of using Bitcoin? However, not everyone will try to take advantage of this. Those who are prudent and consider their own security will never give their Bitcoin to someone else, no matter how trustworthy they are. Moreover, the advantage of being anonymous using Bitcoin will no longer be there. Those who want to lose their freedom consciously that is their decision.

If I’m wrong, you can correct me but why will someone with his right senses want to take a bank loan using his Bitcoin as a bargain or collateral? It does not make any sense to me maybe it’s why I am getting it wrongly or finding it difficult to understand. Your bitcoin asset is supposed to be your financial freedom and something you should be able to access when you need financial support but not something you subject into control of a bank. It is just like handing over your independence into a dependent state through the sell off of your bitcoin freedom to a centralised system called the bank and now making the bank more independent.

[Josefjix]

There’s no way banks control people. Depending on banks doesn’t mean the bank can control people, you get the choice to do whatever you want. In a situation where people start to depend on banks to get a loans using their bitcoin as a collateral, then tell me where the banks control them? You still have your bitcoin in your wallet and the private keys to control your wallet. The other thing is that depends on what the individual do with the loan they took from the bank. If you use your Bitcoin as a collateral, when the repayment date comes up, if they don’t get the money, then they have no other option but to hand over the Bitcoin to the bank. Since it what they use as the collateral.

If this kind of negotiation going to happen, then the Bitcoin will never be in a decentralized wallet, such Bitcoin must be sent to a centralized platforms where easy swapping can be done between banks and centralized platform. Infact, it will be integrated in such a way that the Bitcoin Will be sent to bank automatically immediately the date is reached without loan repayment.

[Dogedegen]

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 ...

This have raised some concerns inside of me, and I need to let it all out ...
I read through one of this discussion and people are liking the idea so far...I don't completely hate it but...

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.

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.

This is a very weird and rude way to tell people that they are stupid and that they don't know what they are doing. Just because you use the word confuse and not something worse does not make it better.. People have the ability and freedom to make their own decisions. Many people like to use loans for different purposes and have unique loan structures, some that you can't even imagine that are possible. If someone wants to use Bitcoin as collateral for their loan, what is wrong with that? Where is the confusion? Let people do what they want, it is their responsibility to get familiar with the risks and the terms of each loan. Actually a Bitcoin-backed loan under good terms is a good option. I am looking forward to a future where more financial options at good terms are available to more people. It should not only be a thing for the rich.

[JoyceBTC]

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.

Normally, the bank wouldn’t even ask a customer their bitcoin as collateral for their loan, they will only be aware you have bitcoin if you give them that information and if as a person, the only option you have is using your bitcoin as collateral, then that’s up to you. Giving them bitcoin as collateral doesn’t mean you will handover the password too, that’s foolishness because your bitcoin is meant to be very precious to you and handing over your bitcoin does not mean you make them in charge of it, they will definitely not force you to do anything and if their terms and conditions doesn’t suit you, it better you back off. It is better to think twice than taking any drastic decision that will affect you in the future.

[Hazink]

Normally, the bank wouldn’t even ask a customer their bitcoin as collateral for their loan, they will only be aware you have bitcoin if you give them that information and if as a person, the only option you have is using your bitcoin as collateral, then that’s up to you. Giving them bitcoin as collateral doesn’t mean you will handover the password too, that’s foolishness because your bitcoin is meant to be very precious to you and handing over your bitcoin does not mean you make them in charge of it, they will definitely not force you to do anything and if their terms and conditions doesn’t suit you, it better you back off. It is better to think twice than taking any drastic decision that will affect you in the future.

What's the difference between giving someone access to your bitcoin key and sending the bitcoin to the person? If you are to use your bitcoin as collateral for the loan, then you will have to hand over ownership of that portion that's agreed upon, which will mean either sending it to a wallet under their control or that of another party which they use as custody.

[ZAINmalik75]

Are all people involved in Bitcoin or cryptocurrencies are actually utilizing the decentralization factor right now even if banks weren't involved? No, because so many people use centralized platforms and custodial services to hold or keep their cryptocurrencies, which is basically the same thing as giving your crypto to a bank to keep it while you take a loan from them, because centralized platforms are basically just like banks with just a few differences in policies or regulations, etc.

Now, it should be very clear that only those people who barely care about privacy or decentralization will decide to give their bitcoins to banks because they want to borrow money from them, and these will be the same kind of people who probably have never used a non-custodial wallet to keep their bitcoins, so them accepting such an offer is not really a loss for Bitcoin or its decentralization, but if those who are privacy-concious in general decide to do something like that, then we can say this is affecting Bitcoin negatively, in some sense.

[JoyMarsha]

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.

Before we have this in mind, how many Bitcoins will the bank have to control? Let's not forget that banks are not owned or controlled by one person or one entity. There are a good number of banks out there, and not every one of them can afford Bitcoin that they can control the market with. Banks will have different packages and services that they will use to attract those who want to loan their Bitcoin to them. Not every Bitcoin will do such a thing, and not everyone will give up on Bitcoin at the same time

[LUCKMCFLY]

I completely agree with what you said. Maybe we have to deposit the wallet seed or deposit our Bitcoins in the bank's wallet. Maybe the bank will be willing to keep our Seed Phrase so they will keep the Bitcoin in their wallet

I would advise never putting your BTC in a bank. You have to be very protective of your BTC. If you put it in a bank, that BTC is no longer yours; it belongs to the bank. They will manage and use your BTC. If you have BTC, there's nothing like having it in your own self custody, under your private keys, where you know you can store it safely. For me, it makes no sense to have BTC in a bank. It's like telling the system, "Look, I have BTC," and that's opening the door to criminals. Many people trust banks; I don't. In fact, one of the reasons I love BTC is that it doesn't depend on banks or third parties.

[Compromise me]

No, it's not breaking decentralization because it does not break the Bitcoin protocol and the BTC blockchain.
Being "your own bank" is a personal choice. Most people would never truly believe in the power of financial decentralization and "be your own bank". Most people would always stick to using centralized financial services(fiat and crypto). This is their choice and who am I to try to lecture them and change their minds about this subject. No bank is forcing you to use your BTC as a collateral and borrow fiat money. I don't know what exactly do you mean by "confusing". The banks have to follow strict customer protection laws and regulations. A bank cannot act as a "loan shark" from the streets and confuse the people into getting loans, that have absurd interest rates and sketchy hidden strings attached.

There is enough negative connotation about Bitcoin just because these people are not feeling good and never try to use it. These recent developments bring a good positive approach in many countries. Banks are also giving facilities, which are also helpful, but still few things will always be on cards, it's never been going to be controlled by anyone. Bitcoin is decentralized, and it's going to be kept forever. Just like those who are buying and having this, they could be controlled, which is under their portfolio, nothing else is going to have an impact on its nature. Banks will provide loans just based on their risk management, nothing else is going to be a problem while they have never forced anyone to use this as collateral because they understand all how it's going to work and have an impact on things.

[Chibit01]

If this kind of negotiation going to happen, then the Bitcoin will never be in a decentralized wallet, such Bitcoin must be sent to a centralized platforms where easy swapping can be done between banks and centralized platform. Infact, it will be integrated in such a way that the Bitcoin Will be sent to bank automatically immediately the date is reached without loan repayment.

Banks will need to play safe to protect themselves and bitcoin is not like landed property where holding property documents and some contract agreement can be enough. In this situation, the person won't have access to the amount of bitcoin they are using as collateral. They will not even give a private key out the borrower will have to send the bitcoin to what ever custody the bank is using.

[Renampun]

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

I don't think so.. in this case the bank is only acting as a place where people can get loans with their Bitcoin quickly, they aren't breaching anything, they are just offering their services to people who need them.. If the person decides to take the loan with their Bitcoin, it means that the person has committed to collateralize their Bitcoin to the bank and it is entirely their decision.. Meanwhile, Bitcoin itself remains decentralized and is not affected by these people.

You know not everyone wants to hold their Bitcoin in their self-custody wallet forever.. There are people who want to collateralize it to a bank and get money, either for their needs or for other purposes.. However, when they do that, it means they already understand that the bank can do anything with the Bitcoin according to the agreement of the two parties.