Bitcoin & the Banks

[MoonShadow]

read this:  http://docs.google.com/viewer?a=v&q=cache:Z1aK2cAnWl0J:siteresources.worldbank.org/AFRICAEXT/Resources/258643-1271798012256/M-PESA_Kenya.pdf+m+pesa+in+kenya&hl=en&gl=us&pid=bl&srcid=ADGEESgK0nQlLli7vxzi-IYwiVHQCR1cUKh-tciYKhqVGfJbrxwKC-DBDc8odwykJCw992IoPfeb20FWvmOP3pgJwR77vH-nNXLGsyjrEQyNquQG0OICPLPKNRURYyXwFXK-sHhywgLC&sig=AHIEtbQSonmhImIIxylKfUzWNTF6jqQkCA&pli=1

in Kenya, the banks, credit card industry have been effectively shut out of the majority of tx's in the country by M Pesa.  whodathunk it possible?  BTC brings this concept to the rest of the world.

And transactions are far less expensive in Bitcoin than MPesa.

[Timo Y]

Why would bitcoin be a threat to banks?

Bitcoin will decimate the banking industry for the same reason that the internet decimated the travel agent industry.

They're really good at securely handling currency; that's a valuable service, whether the currency is dollars or euros or bitcoins.

Yes, they are good at securely handling currency, but only with big overheads.

It won't stop being a valuable service, but securely handling BTC is a lot cheaper and less labour intensive than securely handling USD or EUR.

A bitcoin vault service run by computer security experts would probably only need need 1/10th of the employees as an equivalent sized bank, and it would probably offer superiour security at that.

[Gavin Andresen]

bitcoin vault service run by computer security experts would probably only need need 1/10th of the employees as an equivalent sized bank, and it would probably offer superiour security at that.

But they won't have the experience jumping through all the banking system regulatory hoops, or experience dealing with currencies other than bitcoin.

I expect lots of successful bitcoin vault services, and I expect one or more of them to be purchased by one or more banks and made a part of the banks' money services business.  If they see bitcoin vault services making big profits, they'll want to own one.

My predictions are frequently wrong, though.  Maybe US banks will fight bitcoin tooth-and-nail, or maybe the legal issues will be too unclear for any bank to risk getting involved.

[LH66]

I expect lots of successful bitcoin vault services, and I expect one or more of them to be purchased by one or more banks and made a part of the banks' money services business.  If they see bitcoin vault services making big profits, they'll want to own one.

I think this is a very reasonable projection.

[PLATO]

I expect that at least one vault will cut and run with all the money that's inside it

[ribuck]

I expect that at least one vault will cut and run with all the money that's inside it

In addition, I expect that one or two vaults will lose the money due to hacking or incompetence or a software error.

Eventually, rock-solid vaults will emerge, and will fiercely guard their good repuation.

Then, some years later, governments will regulate Bitcoin vaults, and the providers will do just the minimum required to maintain their registration, meanwhile enjoying the protection from competition that you get with a regulated industry sector.

Then, some years later, there will be a crash because it turns out that the regulated vaults were using their Bitcoin deposits on unsustainable collateralized debt obligations. The government will say that it happened because there wasn't enough regulation.

Rinse, lather, repeat.

[PLATO]

I just hope the Sultanate of Kinakuta gets their data haven up and running soon

[gareth69]

The main way banks make money is not via "fees", it's through their *monopoly on the creation of money*. When you sign a loan, they create the money from nothing, and then *charge you interest on it*.

One of the reasons the British were hopping mad at their American colonies was that the colonies started to use their own currency. This meant no need for loans (in British pounds), hence no interest! Moreover, no transaction fees either...not using British Banks or pounds as an intermediary for exchange of goods.

Bitcoin is therefore like sunlight to money sucking vampire banks...it sidesteps them and their whole model completely. If bitcoin takes off, I predict governments (read banks) are gonna start pulling all sort of BS out of their **sses to regulate the hell out of it.

[marcus_of_augustus]

The main way banks make money is not via "fees", it's through their *monopoly on the creation of money*. When you sign a loan, they create the money from nothing, and then *charge you interest on it*.

One of the reasons the British were hopping mad at their American colonies was that the colonies started to use their own currency. This meant no need for loans (in British pounds), hence no interest! Moreover, no transaction fees either...not using British Banks or pounds as an intermediary for exchange of goods.

Bitcoin is therefore like sunlight to money sucking vampire banks...it sidesteps them and their whole model completely. If bitcoin takes off, I predict governments (read banks) are gonna start pulling all sort of BS out of their **sses to regulate the hell out of it.

You got it ... it's gonna be crap fight for the ages ... we haven't had a good upstart money to rival the banksters monopoly since the American Revolution ... I'm serious, this is gonna a be big battle, choose sides carefully, history is not kind to losers.

[markm]

Quote: "maybe banks would be the only ones that actually were running the software and we all just had interfaces to it and they still had some transaction fees, although much smaller."

This might be an interesting model for various alternate block chain variants/clones of Bitcoin to try.

I suspect that if existing government-licensed banks did this, they would do it with their own blockchain or blockchains.

Think peer to peer where peers are highly privileged folks not just any old tom dick or hairy.

The model might work well for example as an international currency if national hashing power happens to compare similarly to other types of national power. If the current top five or seven or ten or twenty or whatever finance-nations or groups (e.g Euro nations as a group) turn out to also be the top five or seven or ten or twenty of whatever in hashing power, maybe moving to a blockchain-based reserve currency could work well for them.

It might be a useful startup configuration for various alternative bitcoin-like currencies because limiting the "peers" doping the actual "mining" part of the system - in particular, the actual "minting" of the coins - allows various different models of how to initially distribute the coins to be implemented.

Instead of any tom dick or hairy grabbing a copy of the software and linking (possibly even anonymously) into the network, various groups can issue their own variants each featuring their own ideas of how to "back" the "value" of "their" coins and how to initially distribute coins.

As a start toward a kind of experiment or simulation of this kind of thing, a "resource mining" game has been set up at http://galaxies.mygamesonline.org/ to provide a kind of substitute for or simulation of "mining", allowing players to "mine" or "synthesise" three different "resources" (metal, crystal and deuterium) which are themselves then used to construct "mining" and "synthesising" facilities and various support infrastructure such as transportation, storage, defense and so on.

This provides a backdrop against which various factions groups or individuals can try to establish "value" in any currencies they care to implement, whether new blockchains invented by themselves or any of the ones supported by my IRC bots or any existing currencies or even simple balances of how much of which resource someone is claimed to have "on deposit" at some storage facility or facilities featuring various shipping costs to transport the deposited resources to and from such repositories.

Establishing quick and easy conversion between any number of currencies based on bitcoin type blockchains can thus maybe be started within games as a kind of t4estbed to play with it all and maybe to some extent even "simulate".

As a player, will you seek to establish one or more currencies yourself, or trade via currencies set up by others, or stick to bitcoins and paypal and pecunix and liberty reserve, or maybe even just do barter of one resource for another without bothering with "currencies" at all?

It could be interesting to see what choices people make and the outcomes of them...

-MarkM-

[webwave]

The largest insurer in the world, that insures both retired military and active military is USAA. What people don't talk about is the reality that USAA created a "cryptocurrency wallet" for all their customers. Once the bitcoin comes into the account, it may be converted to fiat then transferred over to the customer's checking account where FDIC is obliged to protect it with its insurance.

And APPLE accepts credit cards, echecks, PayPal, Square and six (6) different cryptocurrencies and they'll accept more as time goes by.

Goes to prove that the established "banking world" cannot continue fighting innovation. When the electric car came on the scene, Detroit bought it and shelved it for 50 years. And the first "ChargaPlates" fought off credit cards competitors with a vengeance. When Paypal came on the scene, Western Union lost its footing and paid half a billion trying to take it down. It failed and now PayPal is part of our daily financial world. Banks, cards and sometimes PayPal fought off "Square."

And if Wells Fargo had used cryptocurrency and blockchain throughout their banking systems, they could have avoided this travesty they're dealing with today.

Wells Fargo Execs smugly paid the $185 Million dollar fine because they were keenly aware that when a customer opens an account, the fine print forbids customers from suing the bank for any reason. Bank Executives know the wording is in the fine print - but most customers did not notice.

5,300 bank employees were not fired "overnight."  5,300 employees is the number of employees fired from 2011 through 2016 for opening fake accounts using their customers DOB, Social Security numbers and all the other financial information in the customer files. The bank's brass wasn't satisfied with their current "6 products per customer" sales numbers. They wanted "8" products sold per customer.

That's why their hard line sales tactics with their staff was called "The GR-eight Sales." Supervisors that forced their underlings into creating fake accounts even won bonuses as a result since the fraudulent accounts helped them meet and beat their sales goals.

We must discuss the current day banking issues that affect us right now before we keep fighting about "if" cryptocurrency will be accepted by banks in the future. We should be preparing for "when" cryptocurrency is accepted because its acceptance is inevitable.

Cryptocurrency is needed RIGHT NOW...  Wells Fargo bank employees had no fear of the law because they knew their customers had no options. California State and Federal Courts have been throwing out cases suing Wells Fargo for years and the bank execs make their decisions confident that their customers can't do anything to defend themselves.

Bank employees whom are not even bonded have way too much access to all our information (I am speaking as a banking customer). I wrote my observations on my blog and added the link to the article I wrote about this problem below.

NOTE:  If it is unacceptable to post outside links here then I ask the moderators to feel free to remove the link so that I am in compliance with the terms of service of bitcointalk.org.

Cryptocurrency is the reason 30+ Iceland bankers are currently serving criminal sentences. Cryptocurrency could have identified the thefts immediately at Wells Fargo. The retroactive ability to identify theft and transactions is also the reason banks in general keep rejecting cryptocurrency. They realize it's similar to bringing a cop into an illegal poker game.

Cryptocurrency's very nature makes current transactions and future ones transparent. The fact that is also reveals quite a bit of banking activity retroactively is why banks keep rejecting it.

Who did Wells Fargo bank employees target anyway?  

Our society's "weakest links." Poor and defenseless Blacks, Hispanics and Senior Citizens http://snn.bz/bank-employees-robbed-customers/

[prabowo96]

Banks will start they own altcoin, will make all users eat their shit like they always do.

The other side of the coin is: Bitcoin price will increase and others alts too because more people will know about how it works.

[justspare]

You'll just be able to go to the bitcoin ATM on the corner, put in cash, and get bitcoins. Or, meet your local dealer f2f and pay cash.

Well you can already do both those things. Bitcoin ATM's are located all over the world and if you want f2f dealing, just go onto localbitcoins and find a seller near you.

[Doamader]

Banks will start they own altcoin, will make all users eat their shit like they always do.

The other side of the coin is: Bitcoin price will increase and others alts too because more people will know about how it works.

Well i really doubt they will make their own crypto coin, if they make they need to give something to their investors, some reward as the size of coins hold by each one, otherwise makes no sense to invest into something we know it will be controlled by bank, and maybe the altcoin wont change, with several restrictions as can be purchased only at bank and sold as well.

[DaddyMonsi]

Banks will not be happy about Bitcoin, due to the fact it competes with them.
 

Bitcoin is not a competitor of Banks. Both have different target markets. Both have their own characteristic's. Each have their own down sides. Each have their own advantages. But its good to have both of them if you have enough money to store in Bitcoin wallet or Banks.

[xuan87]

i think bitcoin and bank its two things that cant be mixed together, bank is centralize, it is controlled by government while bitcoin is decentralize which is control by the users, and i doubt bank will adapt bitcoin system because bitcoin main feature is anonymity and able to generate address as much as we want, and the bank will never accept this kind of things

[Harlot]

Hey Op I don't think you need Banks to convert your BTC to Fiat Money, Yes it is one of the ways (through bank deposit) but it is not the only way. I am using a local btc wallet here in my country and they have a 2 in 1 Wallet for my BTC and my local currency in which I can convert it anytime of the day. They also have options aside from bank deposits are door-door delivery, and Western Union Pick Up to name a few. So Bitcoin will work even though without a support of any bank, btc wallets are run by real companies too.

[shinratensei_]

That means that the benefit of bitcoin, ie. not having to go through 3rd parties, needs to be realised.

But about your sentences, if that is referred into bitcoin? I don't think we can realise it, we always need the through of 3rd parties, and like someone is always need the another person in their life, but that is in my personally.

[stevo401]

here in Australia, some of the big banks are actually working on ways that they can use the basis of BTC to develop their own private blockchain system. There's an interesting article about it at http://www.afr.com/technology/anz-backs-private-blockchain-but-wont-go-public-20160629-gpuf9z

For me though, I feel that running the blockchain through a major bank takes away a lot of the privacy associated with crypto currency though, so I'll stick to BTC myself!

[Rastaman2016]

Asked about the choice of a bank or a bitcoin, you can say yes, it's all different things and share them too it is impossible. Virtual finance and real even cashless still very linked. But there will also be one without the other is not.