Why should Banks / PayPal / etc use Bitcoin instead of their own?

[BittBurger]

More specifically my question is this:

Banks don't care about decentralization.  They only care about saving on expenses.  Bitcoin is cheaper.  But its also open source.  What's stopping them from simply making their own bitcoin network without miners, and taking advantage of the cost savings?  Giving themselves power over the code.  The ability to customize it just for CHASE or BofA.   The CEO of paypal said he bought bitcoin just to "see how it works".  Maybe he wants to learn the ins and outs so they can make their own.

Obviously this has been discussed before. Bitcoins' unique trait is its mining.  Its a powerful system.  So here's the question:  What is it about miners that is so necessary?  Especially if the organization does not care about decentralized trust?  And if mining is irrelevant to CHASE or Western Union, then what incentive do they have to use Bitcoin at all?   Couldn't banks and PayPal just make their own non-mined version?

We need to understand something:  Financial institutions see the value of "cryptocurrency".  
Using an online ledger, created by anyone (not just Satoshi) to transfer value anywhere in the world for free.
Sounds a heck of a lot like Ripple doesn't it.

So they sit down to their first meeting.  
The first comment out of the guys mouth is:  "Lets get this going in our company"
Will anyone really say "We have to use Bitcoin"?

Why?

[Ron~Popeil]

More specifically my question is this:

Banks don't care about decentralization.  They only care about saving on expenses.  Bitcoin is cheaper.  But its also open source.  What's stopping them from simply making their own bitcoin network without miners, and taking advantage of the cost savings?  Giving themselves power over the code.  The ability to customize it just for CHASE or BofA.   The CEO of paypal said he bought bitcoin just to "see how it works".  Maybe he wants to learn the ins and outs so they can make their own.

Obviously this has been discussed before. Bitcoins' unique trait is its mining.  Its a powerful system.  So here's the question:  What is it about miners that is so necessary?  Especially if the organization does not care about decentralized trust?  And if mining is irrelevant to CHASE or Western Union, then what incentive do they have to use Bitcoin at all?   Couldn't banks and PayPal just make their own non-mined version?

We need to understand something:  Financial institutions see the value of "cryptocurrency".  
Using an online ledger, created by anyone (not just Satoshi) to transfer value anywhere in the world for free.
Sounds a heck of a lot like Ripple doesn't it.

So they sit down to their first meeting.  
The first comment out of the guys mouth is:  "Lets get this going in our company"
Will anyone really say "We have to use Bitcoin"?

Why?

Trust. Would you really use Bank of America coin? Would anyone in this community?

[franky1]

banks are under contract to use FIAT, so goodluck holding your breath for a bank to directly offer bitcoins themselves. at most, what you will see is a bitcoin ATM inside the bank, but the bank cashier wont process bitcoin and the bank wont hoard bitcoin.

as for paypal, bitcoin is a asset currency so i see no reason why paypal should not also accept another form of payment along side its current list of payment processors and currencies.

the benefit of bitcoin is that paypal does not need to pay mastercard/visa extra fee's paypal can just hoard the coins it receives and sell them to new customers. meaning they dont even need to pay coinbase/bitpay fee's, instead i think they will charge their own exchange fee

[Ron~Popeil]

banks are under contract to use FIAT, so goodluck holding your breath for a bank to directly offer bitcoins themselves. at most, what you will see is a bitcoin ATM inside the bank, but the bank cashier wont process bitcoin and the bank wont hoard bitcoin.

as for paypal, bitcoin is a asset currency so i see no reason why paypal should not also accept another form of payment along side its current list of payment processors and currencies.

the benefit of bitcoin is that paypal does not need to pay mastercard/visa extra fee's paypal can just hoard the coins it receives and sell them to new customers. meaning they dont even need to pay coinbase/bitpay fee's, instead i think they will charge their own exchange fee

I am thinking the fed would not look kindly on any involvement with crypto currency. Even an atm might present issues for banks and their relationship to the fed.

[RenegadeMind]

 They only care about saving on expenses.  

It seems to be more about control to me. Bitcoin doesn't offer them control - it takes it away. They'd have to create exactly what they have now - worthless crap that they can control.

[franky1]

banks are under contract to use FIAT, so goodluck holding your breath for a bank to directly offer bitcoins themselves. at most, what you will see is a bitcoin ATM inside the bank, but the bank cashier wont process bitcoin and the bank wont hoard bitcoin.

as for paypal, bitcoin is a asset currency so i see no reason why paypal should not also accept another form of payment along side its current list of payment processors and currencies.

the benefit of bitcoin is that paypal does not need to pay mastercard/visa extra fee's paypal can just hoard the coins it receives and sell them to new customers. meaning they dont even need to pay coinbase/bitpay fee's, instead i think they will charge their own exchange fee

I am thinking the fed would not look kindly on any involvement with crypto currency. Even an atm might present issues for banks and their relationship to the fed.

let me explain again
the Fed creates FIAT, they dont care about bitcoin. but banks (separate entities) who are under contract to use FIAT will continue using FIAT but have a little box in the corner if people decide to use bitcoin. banks will not offer bitcoin directly. but banks will love the fact that people will turn up, ask for their bank notes. then throw them into the bitcoin ATM. then at the end of the night the bitcoin ATM owner would turn up. empty the machine and walk over to the bank teller and give back to the bank, the bank notes to credit the ATM owners bank account.

in the end all the bank touches is FIAT, but they have bank notes circulating more often then not, within the space of 5 metres.

[jeffersonairplane]

More specifically my question is this:

Banks don't care about decentralization.  They only care about saving on expenses.  Bitcoin is cheaper.  But its also open source.  What's stopping them from simply making their own bitcoin network without miners, and taking advantage of the cost savings?  Giving themselves power over the code.  The ability to customize it just for CHASE or BofA.   The CEO of paypal said he bought bitcoin just to "see how it works".  Maybe he wants to learn the ins and outs so they can make their own.

Obviously this has been discussed before. Bitcoins' unique trait is its mining.  Its a powerful system.  So here's the question:  What is it about miners that is so necessary?  Especially if the organization does not care about decentralized trust?  And if mining is irrelevant to CHASE or Western Union, then what incentive do they have to use Bitcoin at all?   Couldn't banks and PayPal just make their own non-mined version?

We need to understand something:  Financial institutions see the value of "cryptocurrency".  
Using an online ledger, created by anyone (not just Satoshi) to transfer value anywhere in the world for free.
Sounds a heck of a lot like Ripple doesn't it.

So they sit down to their first meeting.  
The first comment out of the guys mouth is:  "Lets get this going in our company"
Will anyone really say "We have to use Bitcoin"?

Why?

It's hard to teach society about Bitcoin. Reason the banks won't use it is because for them, no one would use it nor accept it. Which would make costs sky rocket.

[franky1]

banks COULD make their own coin. but unless they premine 100% of it, there is nothing to stop people making their own mining pool and making the reserve/ banks lose control of the 'monopoly'

secondly if it were premined so that the reserve/banks were the sole distributor, controller and rule maker of the coin. who would trust it. after all if they premined a quadrillion altcoins, and said one day they will replace the couple trillion native currency for the altcoin and then only distribute 1% a year after that. what is stopping them from changing the rules to flood the economy with more than 1%. or where people do not have their own privkeys because the banks own all the privkeys to ensure they can offer banking 'services'

bitcoin is great because there is no central distributor, controller or rule maker of the coin. its all done by maths, code and the consensus of people with nodes who decide which version of code to use and which to avoid. aswell as the privkeys being owned by individuals instead of a central providor

[Nathonas]

As people have already pointed out, nobody would be interested in buying into a bank/government controlled cryptocurrency. One of the major points of bitcoin is to get banks/government OUT so they can't abuse their position of power. If they want to go crypto, they're gonna have to play by the same rules as every bitcoin holder in our community already does.

[ShakyhandsBTCer]

Banks have a huge amount of regulations they need to follow. If they were to deal directly in bitcoin they would not only be taking on a lot of risk but also be potentially breaking a lot of regulations and attracting a lot of government related (bad) attention.

[jabo38]

On the merchant side, bitcoin is better in just about every way.  (faster, cheaper, easier)

For the senders side, Bitcoin is more difficult to use, slower, and confusing.

For the banks side, bitcoin is a huge loss.  They don't get nearly as many fees and don't get to play with your money. 

These are the three big players, and while it is easy to see that bitcoin does bring some neat things to the table, it isn't a win/win all around for everybody.  This slows adoption. 

Since bitcoin is a big win for merchants, the more that accept it, the better bitcoin is.  If merchants want to speed adoption, they can give discounts like 1% or 2% and still make more money on the transaction than they would have with a bank/credit card transaction.

[Cicero2.0]

On the merchant side, bitcoin is better in just about every way.  (faster, cheaper, easier)

For the senders side, Bitcoin is more difficult to use, slower, and confusing.

For the banks side, bitcoin is a huge loss.  They don't get nearly as many fees and don't get to play with your money. 

These are the three big players, and while it is easy to see that bitcoin does bring some neat things to the table, it isn't a win/win all around for everybody.  This slows adoption. 

Since bitcoin is a big win for merchants, the more that accept it, the better bitcoin is.  If merchants want to speed adoption, they can give discounts like 1% or 2% and still make more money on the transaction than they would have with a bank/credit card transaction.

This would be especially true for gas. Merchants pay really high fees for "Pay at the Pump" transactions and fraud is really common with gas purchases. Most of the local stations around my town actually give you a discount for using cash inside.

[counter]

In the current system the bankers have is so clearly rigged it would be silly for them to turn around and use BTC.  From a common sense perspective I'd say that they would be better off using BTC so their customers can have a fair shot to win in the market.  They already own just about everthing so It is insane to deny the average person the right to some sort of financial freedom.  I guess it all comes down to morals for why I feel they should use BTC.

[TYT]

I don't think banks ever will use it, or it'll be a long time. Doesn't really benefit them like you said.

[jabo38]

On the merchant side, bitcoin is better in just about every way.  (faster, cheaper, easier)

For the senders side, Bitcoin is more difficult to use, slower, and confusing.

For the banks side, bitcoin is a huge loss.  They don't get nearly as many fees and don't get to play with your money. 

These are the three big players, and while it is easy to see that bitcoin does bring some neat things to the table, it isn't a win/win all around for everybody.  This slows adoption. 

Since bitcoin is a big win for merchants, the more that accept it, the better bitcoin is.  If merchants want to speed adoption, they can give discounts like 1% or 2% and still make more money on the transaction than they would have with a bank/credit card transaction.

This would be especially true for gas. Merchants pay really high fees for "Pay at the Pump" transactions and fraud is really common with gas purchases. Most of the local stations around my town actually give you a discount for using cash inside.

Your right.  There have to be other examples like this too.  I know in some third world countries credit cards aren't even used so much because people are so bad at managing there money.  Bitcoin can definitely move into those areas.  All of those third world countries are now getting mobile.  Big finance is ignoring those markets, but those markets need something like this. 

[Lauda]

This is like asking: why use Bitcoin when you can use banks?
You're your own bank with Bitcoin.  
I wouldn't trust a bank again.

[ajareselde]

This is like asking: why use Bitcoin when you can use banks?
You're your own bank with Bitcoin.  
I wouldn't trust a bank again.

ok, but in the end u cant spend your bitcoin on everything u need, so ultimatevly you must use some sort of bank account again,
Its something like chicken and the egg problem

[Tzupy]

I do expect some money transfer company to create and launch their own crypto, 100% premined, and try to sell it to the masses.
Of course bitcoiners wouldn't buy it, but don't underestimate the power of marketing when it comes to the (tech) uneducated masses.

[Lauda]

This is like asking: why use Bitcoin when you can use banks?
You're your own bank with Bitcoin.  
I wouldn't trust a bank again.

ok, but in the end u cant spend your bitcoin on everything u need, so ultimatevly you must use some sort of bank account again,
Its something like chicken and the egg problem

Who says that you won't be able to in the future? This is just a matter of time.

[TheTruth4]

Simply: because BTC is the future