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Author Topic: Technology could disintermediate banks  (Read 1683 times)
marcus_of_augustus
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March 15, 2012, 08:21:58 AM
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http://www.telegraph.co.uk/finance/economics/9143581/Technology-could-take-the-bankers-out-of-banking-says-BoE-policmaker-Andy-Haldane.html

Improvements in technology could be used to remove bankers from banking, a top policymaker has suggested.

Speaking in New York, Andy Haldane, executive director of financial stability at the Bank of England, argued that the failure of information and risk management systems contributed to the financial crisis and that new technology to prevent a repeat of past mistakes could make “banking middle men ... surplus links in the chain”.

The banking middle men may in time become the surplus links in the chain. Where music and publishing have led, finance could follow.”


Comment: The revenge is all the sweeter that they can see their inevitable end and they get to write about their own demise.

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cypherdoc
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March 15, 2012, 10:17:24 AM
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Great find and in such a public newspaper. 

So true.  It is already happening with Bitcoin at the forefront.
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March 15, 2012, 04:15:06 PM
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Bank could satisfy the human's nature of seeking safety and saving, and at business level they provide the most important driven power of economy -- loan

Since BTC is not good at issueing loans, it will not replace banks in any foreseeable future, it must find a better usage to be more attractive, currently the biggest benefit I think is to transfer money internationally without passing through bank/forex (save at least 3%), but that function is still limited, and those who need this functionality typically have millions of dollar to transfer, that will shake the exchange rate greatly

And the client is still difficult to use, downloading the block chain takes too long time

cypherdoc
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March 15, 2012, 04:34:41 PM
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Bank could satisfy the human's nature of seeking safety and saving, and at business level they provide the most important driven power of economy -- loan

Since BTC is not good at issueing loans, it will not replace banks in any foreseeable future, it must find a better usage to be more attractive, currently the biggest benefit I think is to transfer money internationally without passing through bank/forex (save at least 3%), but that function is still limited, and those who need this functionality typically have millions of dollar to transfer, that will shake the exchange rate greatly

And the client is still difficult to use, downloading the block chain takes too long time

if you somehow think the avg citizen benefits from this system i think you are wrong.  any system that allows 0.01% of the populace to have a monopoly over printing money for its own benefit will be attacked over the long run by the majority.

of course this doesn't stop speculators or freeloaders from figuring out the nuances of the present system and trying to piggyback off its unequal tendencies but for the majority of us who don't cheat we won't stand for this.
Kluge
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March 15, 2012, 04:36:53 PM
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Bank could satisfy the human's nature of seeking safety and saving, and at business level they provide the most important driven power of economy -- loan

Since BTC is not good at issueing loans, it will not replace banks in any foreseeable future, it must find a better usage to be more attractive, currently the biggest benefit I think is to transfer money internationally without passing through bank/forex (save at least 3%), but that function is still limited, and those who need this functionality typically have millions of dollar to transfer, that will shake the exchange rate greatly
I disagree. Bitcoin loans lack the power of government enforcement because lenders and lendees are often in different jurisdictions where collections aren't worth the cost, though I'm sure I'm not the only one who's taken a Promissory Note. That's really the only disadvantage BTC lending currently suffers (we don't "know" them, nor can we contact them in meat-space). That said, US payday loans typically make 9% profit off short-term loans. 4-15% is a pretty typical MPR with BTC. In the UK, 30% of loans are defaulted on (that is, not repaid after 30 days of the agreed repay date), and 10% of those are written off (no repayment 90 days after repay date). That's almost perfectly in line with the data we have for BTC loans (though much fewer than 30% default -- typically, if not repaid within a few days after the repay date, it's going to eventually be written off - it's roughly 10% default rate both for 30D & 90D).

For lendees, rates are often lower than other short-term loan options, it can take less than an hour to go from applying to receiving coins, it's done online, and in most cases - there is no extensive background or credit check. Bitcoin lending operates largely independent of fiat lending, allowing lendees who previously made bad decisions to redeem and benefit themselves. Loan terms are often extremely flexible, with lower rates for those who can make partial payments per week, which fits miners, who're effectively taking out payday loans, and for which specific loan calculators actually exist (plug in MH/s, get rate, expected payment/week, max loan amount).

Don't mix your coins someone said isn't legal
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March 16, 2012, 04:52:42 AM
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Since BTC is not good at issueing loans (especially small loans), it could will not replace banks in any foreseeable future

FTFY
marcus_of_augustus
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March 16, 2012, 08:51:54 PM
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Given the US financial crises was precipitated by the blow-up of trillions of dollars in intricate housing bank loans, some may say a pyramid, and the Euro crises a similar situation in govt. loans, the evidence is clear that banks are pretty terrible at handling loans businesses also.

So they can't keep money safe, the primary role of a bank, they can't do loans very well, and they destroy currency value by centralising their failures .... remind me again what banks are good at?

cypherdoc
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March 16, 2012, 09:41:29 PM
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Given the US financial crises was precipitated by the blow-up of trillions of dollars in intricate housing bank loans, some may say a pyramid, and the Euro crises a similar situation in govt. loans, the evidence is clear that banks are pretty terrible at handling loans businesses also.

So they can't keep money safe, the primary role of a bank, they can't do loans very well, and they destroy currency value by centralising their failures .... remind me again what banks are good at?

making money in more ways than one.
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