"Why Banks fear Bitcoin"

[600watt]

nice article by mr undheim



more and more intellectuals in key positions are getting the message. he is not shy about his opinions. I disagree with his remark about ripple, but other than that it reminded me of reasons why i originally got so fascinated about bitcoin.

this is big, don't forget in the everyday slumps of fighting in this forum -why you are here and how great it is to be a part in such a mindblowing experiment.

Disruption can be a good thing, especially when it affects banking, a failing set of business models which, for all the tweaks, have been virtually unchanged for millennia.

That is, a way for regular folks, as well as specialists, to potentially monetize everything, regardless of location, traditional market access and jurisdiction.

Using the elegance of mathematics they enable almost instant transfer of value at almost no cost between two parties without the need for a trusted third party. The disruption lies exactly there: in disrupting the intermediaries.

In the case of Bitcoin, what is being enabled here is not merely a new market, but a market of markets; a platform for all kinds of new markets to emerge. In it, lies the promise of a transformation, as strange as it sounds, greater than the Internet. Denying such a potential is equal to denying the reality of globalization.

http://fortune.com/2014/11/20/why-banks-fear-bitcoin/?utm_content=buffer9e71b&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

[moffer5]

Banks must make a fortune processing wire transfers. Bitcoin could cost them that money.

[PopTarts]

BANKS SUcK!

[traderCJ]

Until the IRS changes their stance on Bitcoin, I don't see how it can be practically used as a currency for U.S. citizens.  Exchanging Bitcoin for anything but Bitcoin is a taxable event.  Technically, if you pay for something with Bitcoin, even a cup of coffee, then you have a short or long term capital gain or loss to report.  It would be like walking around with a purse full of gold, in the eyes of the tax man.  Sure, you can break the law, but that's pretty shaky footing for what should be treated as a new currency.  The rest of the world, well that's another story.  So, as far as US banks are concerned, I think the only thing that interests them is the underlying technology.

[picolo]

Banks must make a fortune processing wire transfers. Bitcoin could cost them that money.

Bitcoin is negligible in size compared to other ways of exchanging value. I don't think banks are worried about Bitcoin yet but they may start becoming worried if it grows 5times bigger, they could use it and be part of the revolution. A lot of the banks we know will fail soon anyway, they are too worried enjoying the rewards of the FED policies and crazy sweet position they are in.

[NotLambchop]

...
this is big, don't forget in the everyday slumps of fighting in this forum -why you are here and how great it is to be a part in such a mindblowing experiment.
...

Awe-inspiring.  May I suggest a series of motivational films?



*That price tho...  When it tanks like it's doing now, the only thing left is rousing high-minded rhetoric

[solitude]

I wonder why the je-, i mean the banks fear bitcoin

[marvinrouge]

I wonder why the je-, i mean the banks fear bitcoin

https://i.imgur.com/rVKgMkx.jpg

Wow. Racist, homophobic, antisemitic etc. just in one picture

[BitMos]

because they become irrelevant  .

[Bernard Lerring]

As I go about my daily life I sometimes look at the world. My world. My home town and imagine what it would be like if Bitcoin were to achieve parity with the banking system.

Every Truck that I see: £10,000. Every department store and the goods that it contains (lets take John Lewis, for example): a million in goods and wages. The place that I work: at least £10 million worth of machinery and supplies. Most houses that I walk by: £250K+. Cars, buses, railways: thousands upon thousands. I live near a large hospital which must have a hundred million of equipment and workers wages per year passing through it.

All of these things, if Bitcoin were to be part of the system, would make a single Bitcoin a vast amount of money.

Will it happen? I don't know. I think the powers that be would work extremely hard at preventing a decentralised currency becoming on a par with the banking system that they control and use to manipulate us and other states in the world.

It's a dream, but one hell of a dream.

[BitMos]

fucking no, bitcoin are hoarded. there is no incentive to change. Imagine CITI BANK, IMAGINE THE SIZE OF THE BALANCE SHEET? Why would they make you rich (and you will do the same shit as your predecessors, aka prostitution and co) while they can simply, once the developpement is right, relaunch a "state"bitcoinlike and make this one illegal (with gitmo as an ending) what do you do? lol. American pikers in force here.

[Bernard Lerring]

Will it happen? I don't know. I think the powers that be would work extremely hard at preventing a decentralised currency becoming on a par with the banking system that they control and use to manipulate us and other states in the world.

What makes you think they wouldn't just control this market, like every other market, since the beginning of time?

They can...and they will.

I'm no expert on mining, but to attack the blockchain the goverments would have to buy vast quantities of mining equipment in order to compete with what is already running. Would they have this money to spare? They would have to suddenly switch on millions of powerful mining equipment.

If US/western hyperinflation occurred and Bitcoin shot up to the moon the goverments would frantically try to grab as many as they could in order to keep control but they wouldn't have the money to keep up if we were in the midst of an almighty accelerated bubble. Imagine BTC increasing 10 fold by the hour as a bidding war kicks and the exchanges became saturated with buy orders. You could pretty much sell at a ridiculously high price and they wouldn't have the funds to keep up.

Am I thinking on a reasonable level? Does anyone agree? Does anyone think that the western governments already have their hands on thousands of BTC already?

[Bernard Lerring]

... while they can simply, once the developpement is right, relaunch a "state"bitcoinlike and make this one illegal ...

Why would any of us normal folk, who know about Bitcoin and the power of a decentralised currency start buying state sanctioned crypto, with a blockchain run by the government, who have been proven to be corrupt with money for years? It would be like throwing your principles away.

Why would we bother buying a US sanctioned crypto if our open source Bitcoin network, based on freedom, was currently going through a massive wealth increase?

I hope I followed your post right, BitMos.

[Bernard Lerring]

Who said anything about attacking the technology?

There's more than one way to skin a cat.

Do you mean they would start prosecution orders against everyone that used Bitcoin? That would take some time to organise.

How else do you think they could destroy the Bitcoin infrastructure?

I'm not trying to test your patience. I'm genuinely fascinated by what may happen.

[NotLambchop]

...
How else do you think they could destroy the Bitcoin infrastructure?
...

Bitcoin could be illegalized, like drugs or CP.  Most people who are invested in Bitcoin have no interest in being straight-up criminals.  Businesses will not accept bitcoin.  The price would plummet into irrelevancy if just US, unilaterally, took such measures.

But Bitcoin is really threatening, it doesn't threaten US only--it threatens all fiat currencies.  Currencies that are the lifeblood of world economy.  I think other nations will be glad to join in the Bitcoin Kristallnacht.  Some nations have already started down this road--China, Russia.

But I'm only entertaining your idea that banks/nations are actually scared of Bitcoin.  Bitcoin's current market cap makes it about as relevant and threatening as BBQ coin, when seen in perspective. 

[Bernard Lerring]

I'm no economist but I am deeply sceptical about the way our goverments have been running things (not just recently, but over decades).

Bitcoin may not have the market cap of USD but it has potential and, being open source, can be developed upon.

These are very interesting times we live in and I admit that the idea of owning a handful of BTC making me wealthy enough not to work in a crappy job again appeals to me but it can mean so much more than that.

I like the world I live in, even if it is by no means perfect and if Bitcoin is to have a future (it has to be better than the corruption that we're currently entrenched in) then we need to organise taxation and healthcare, law enforcement, education etc which is included within a crypto-driven/financially decentralised economy.

We need to organise sidechains and policies that fit in with Bitcoin, not just smugly sit on our BTC thinking about how clever we were that we bought into something early.

Like I say. Interesting times. I hope the banks fail but I don't want riots in the streets. Just fairness.

Anyway, It's 0130 here and I'm tired now, so I'll leave it there.

[Bernard Lerring]

Then why the talk of "skinning a cat" if you believe that Bitcoin will fade into obscurity due to it's supposed impotence in the market?

You seem confused about your own theory. Not to mention coming across as a bit of a know it all. I admitted that I know little about economics and am trying to speculate/gain some insight into the future of Bitcoin, while you persist in gobbing off with these certainties of yours about how the government (who we all know like to keep their innermost dealings secret) are going to react.

You're just as speculative as I am. The difference between us is that I admit it.

[Bernard Lerring]

I can only imagine that the banks must be furious of a system that they don't control. I'm pretty sure that much is true.

I addressed the owning issue earlier though. We both know that Bitcoin has no theoretical upper limit with regards to other currency (it could shoot to $1000 or $100000000000 per coin) and if some kind of tipping point occurred then the government (or anyone else for that matter) wouldn't be able to keep up with buying enough of it to maintain control.

Theorise what you like about if and what such a tipping point could cause this but it does render your argument that Bitcoin is currently irrelevant, umm, irrelevant.

[JimboToronto]

I wonder why the je-, i mean the banks fear bitcoin

https://i.imgur.com/rVKgMkx.jpg

Wow. Racist, homophobic, antisemitic etc. just in one picture

Exactly my impression too.

Edit: @ Solitude - Hopefully your post was intended to be sarcastic, but it still was in terrible taste.

[Bernard Lerring]

Anyway, I don't want any animosity here. I'm interested in theorising what will happen with cyber-currency and it's been interesting and left me with a disappointing thought that those in power could have the capacity to control what could be a revolution in the financial world. In fact I feel like I'm going round in circles. Good argument Devin Chow.