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This is a complicated question. The reason why banks exist is because they can do credit creation (by issuing loans.) This enables a bank to lend out more “money” than reserves (at the central bank and other assets.) bitcoin is like “gold” and if it becomes more common in everyday transactions it would mean that banks would have to build up bitcoin reserves, in case they start having accounts denominated in bitcoin. This in turn enforces central banks to hold bitcoin in case banks have to be bailed out (if bitcoin becomes very common.)
However, in parallel there’s more development happening around the bitcoin network. Although the bitcoin network cannot handle much transaction volumes, there’s work that enables decentralised high speed transactions using the bitcoin network as a settlement layer. These technologies are named lightning network, lumino, sidechains, etc. This enables high capacity transfers completely outside the banking network. If peer-to-peer lending networks enables alternative ways of people getting loans, then the need for banks may almost diminish. At least how we view “banks” today, i.e. credit creation. These institutions will of course not disappear but transform into something else. Perhaps into something like investment funds.
Banks are just going to adapt if bitcoin becomes king, it is very likely that you will find a way to pull their trick on bitcoin the same way they do in fiat and then they will keep doing what they do best stealing people’s wealth by providing a service no one really needs.
Bitterly Truth, we can now monitored and control our money so why bother ourselves in engaging in banks and other banks activities. Our bitcoin wallet have features that are useful like banks and having low transaction fees are much more better than in banks.
Yes, but it seems that people are blind and kept ignorant about how the economy really works, so as long as they can exchange their dollar for products and services they are fine with things as they are which is a shame since things could be a lot better thanks to bitcoin.
This is a complicated question. The reason why banks exist is because they can do credit creation (by issuing loans.) This enables a bank to lend out more “money” than reserves (at the central bank and other assets.) bitcoin is like “gold” and if it becomes more common in everyday transactions it would mean that banks would have to build up bitcoin reserves, in case they start having accounts denominated in bitcoin. This in turn enforces central banks to hold bitcoin in case banks have to be bailed out (if bitcoin becomes very common.)
However, in parallel there’s more development happening around the bitcoin network. Although the bitcoin network cannot handle much transaction volumes, there’s work that enables decentralised high speed transactions using the bitcoin network as a settlement layer. These technologies are named lightning network, lumino, sidechains, etc. This enables high capacity transfers completely outside the banking network. If peer-to-peer lending networks enables alternative ways of people getting loans, then the need for banks may almost diminish. At least how we view “banks” today, i.e. credit creation. These institutions will of course not disappear but transform into something else. Perhaps into something like investment funds.
Banks are just going to adapt if bitcoin becomes king, it is very likely that you will find a way to pull their trick on bitcoin the same way they do in fiat and then they will keep doing what they do best stealing people’s wealth by providing a service no one really needs.
Bitterly Truth, we can now monitored and control our money so why bother ourselves in engaging in banks and other banks activities. Our bitcoin wallet have features that are useful like banks and having low transaction fees are much more better than in banks.
Yes, but it seems that people are blind and kept ignorant about how the economy really works, so as long as they can exchange their dollar for products and services they are fine with things as they are which is a shame since things could be a lot better thanks to bitcoin.
They are blind and ignorant because fiat still supplies everything they need, they are confortable with this situation, it’s normal. Currently the most people that are using BTCs are doing this because they need extra sources of money and bitcoin is a good one. Maybe there are other people needing money also, but for any reason they don’t trust bitcoin or they think it’s a dangerous currency/scheme. To say the truth I tought this before start using BTCs.
This is a complicated question. The reason why banks exist is because they can do credit creation (by issuing loans.) This enables a bank to lend out more “money” than reserves (at the central bank and other assets.) bitcoin is like “gold” and if it becomes more common in everyday transactions it would mean that banks would have to build up bitcoin reserves, in case they start having accounts denominated in bitcoin. This in turn enforces central banks to hold bitcoin in case banks have to be bailed out (if bitcoin becomes very common.)
However, in parallel there’s more development happening around the bitcoin network. Although the bitcoin network cannot handle much transaction volumes, there’s work that enables decentralised high speed transactions using the bitcoin network as a settlement layer. These technologies are named lightning network, lumino, sidechains, etc. This enables high capacity transfers completely outside the banking network. If peer-to-peer lending networks enables alternative ways of people getting loans, then the need for banks may almost diminish. At least how we view “banks” today, i.e. credit creation. These institutions will of course not disappear but transform into something else. Perhaps into something like investment funds.
Banks are just going to adapt if bitcoin becomes king, it is very likely that you will find a way to pull their trick on bitcoin the same way they do in fiat and then they will keep doing what they do best stealing people’s wealth by providing a service no one really needs.
Bitterly Truth, we can now monitored and control our money so why bother ourselves in engaging in banks and other banks activities. Our bitcoin wallet have features that are useful like banks and having low transaction fees are much more better than in banks.
Yes, but it seems that people are blind and kept ignorant about how the economy really works, so as long as they can exchange their dollar for products and services they are fine with things as they are which is a shame since things could be a lot better thanks to bitcoin.
They are blind and ignorant because fiat still supplies everything they need, they are confortable with this situation, it’s normal. Currently the most people that are using BTCs are doing this because they need extra sources of money and bitcoin is a good one. Maybe there are other people needing money also, but for any reason they don’t trust bitcoin or they think it’s a dangerous currency/scheme. To say the truth I tought this before start using BTCs.
Agree with you mate, me also before i discover bitcoin i do not trust this i just trying for 1 month if this is paying, when i prove it i start putting some of my extra money as investment and then now i started to recruit my office mate to used this as their additional investment but still we used bank as our main safe keeper of our money bitcoin is just an investment.
Published at Fri, 07 Apr 2017 06:06:44 +0000
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