The Two Sides To Banking Handling Crypto

in HODL3 months ago

Hey Jessbankers

For years those who have been in crypto have had a love-hate relationship with the traditional financial system. The essence of Bitcoin is routed in creating an alternative monetary system that runs parallel to the world economic system and allows us to opt-out in times or use this system should we become disillusioned, oppressed or excluded from the traditional system.

Certain Bitcoiners, like the maximalist and far-left, would say we don't need them, while the more capitalist right side would be saying we need them to come on board to add legitimacy for mass adoption.

Both sides have their point, and I would lean more left, so that you know my biases on this topic.

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First they ignore it and make fun of it

When crypto came around, many financial institutions discredited it, said it was a bubble and it would be gone as quickly as it came. As it continues to soldier on despite the internal politics, teething issues and growing pains, we've brought legitimacy without the need for institutional support.

Bitcoin has been one of the most resilient protocols I've ever seen and even though it's more centralised than I would like it's still our best bet at achieving sound money. They've tried to take it down with FUD and a range of narrative pieces, they've tried to take it out with regulation, they've tried to take it down with financial sabotage and market manipulation, and yet we're still here.

Now that they are starting to realise it won't be an easy way to take this down, they want to make it part of the system and take it down from the inside and rob the individual of their right to private money.

Pros of banks holding crypto

It would be a huge step for normies, getting in and swapping over crypto into fiat and back, opening up the world of finance 1.0 to finance 2.0 and these off ramps and on ramps can make it easier for normies.

It's also a huge step for legitimacy from the money hogs and such as investors and family offices wanting to get into the space.

Also, there would be a way for normies to feel "safer" ironically, getting into crypto and adding more liquidity to the market, so volatility is reduced.

This will also bring more competition into the space of on-ramps with exchanges being notorious for being under capitalised or faking volumes.

These exchanges also do not have adequate cover such as insurance for deposits so banks could help with this.

Cons of banks holding crypto assets

As far as I can find now, this is only limited to Bitcoin, and I think its for the simple reasons that they know this is the one they want to control. If they can centralise more of the BTC funds, they also have a big say over the entire crypto market.

Additionally, if they cannot get control as HODLr's do not relent, they could select altcoins to "legitimise" and push funds into these currencies to try and disrupt the market.

Leaving your BTC with banks also leaves you open to things like bail-ins and allowing them to collateralise their bank and leave you with shitty fiat that is being debased.

Banks holding your BTC also eliminates a big part of the BTC experience which is owning your own money and lull customers into a false sense of "owning" Bitcoin.

How I see it

I think we should use the banks the same way they have been using us for years, using it an onramp to get into crypto and then taking full ownership of our funds. A total bank run, while I don't think they'll allow it, we'll have to find ways to hold ownership of our funds or risk a repeat of the situation we find ourselves in with fiat money.

While we could always fork and move, it would be a significant knock losing ownership and the decentralisation of Bitcoin.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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Of course that greedy banks want the whole pie, including the crypto cherries. I am sure crypto people are not easily fooled though

I sure do hope so, I believe in HODLrs of last resort those people who would never give up their BTC to anyone or anything! Many people will use banks, i just hope they will learn to at least take some of their wealth out of the banks and hold it for themselves

Brrrr the world bank gives me goosebumps lol. I dislike banks since I was little. No no no, you won't ever see me take a loan from a bank. Never ever ever. I would have nothing against owning a bank ahahha, but being in debt because of that... Nop.

I'm the same, I would have sleepless nights if I had debt, I've had like small loans on a credit card before and all I wanted to do was clear it as soon as possible. I prefer using what I have and if I can't afford something ill save for it.

You are a bank, if you hold crypto lol You own the funds no one can take it from you!

!ENGAGE 20

Ah I am happy that you managed to pay out debt! Credit cards are the worst temptation to have in a house, it gives you a false feeling of money you never actually own. I believe that a lot of innocent people drowned themselves into debt by making small purchases on credit card. It's like giving candy to a diabetic.

I agree on buying what you can afford with straight up cold cash. I remember reading somewhere something like this : if you can't buy it twice, then you can't afford it. Ah.... So true somehow.

I believe that it takes a great amount of maturity and a delay of gratification to be able to resist in front of the collective urge to buy more stuff. We actually pay the stuff we have with our time, with tiny bits of our lives. Then as time passes by we realize we want more time with our loved ones, but we are stuck in debt paying the stuff we once liked and now we don't. This continuos desire for more stuff is the downfall of humans. I rather fill my life with moments and experiences rather than paying debt. Most want vacations, luxury life, with a credit card. They would be so much better if they would make the hard work of saying no to spending and yes to saving.

Crypto has potential indeed. No matter the curency, if the spending habits don't change, one may still end up poor and struggling. It is not the amounts but the way of how you spend what you have is what it counts.

!ENGAGE 10

I LOVE this, if you can't buy it twice you can't afford it, I live my life by that line and many people call me nuts but I'll stick to it and you stick to what you do and we all happy.

Also, dammmmn you're on fire today, I LOVE LOVE LOVE this one, it's so true, no sense in trying to make money in crypto if all you plan to do is give it away for cars and fancy things, it defeats the purpose. This is why I am all for, get rich slow, by the time you are wealthy you've learned all these lessons and value the journey and the money more and won't spend it on silly things.

I think the first thing before you start investing is first change your spending habits and your views on money. You've got the formula, I want to just jump in your brain and swim around in it

Hahahaha we think very much alike! I'm happy about that! It is my life philosophy. If someone has a bad one, then they will make bad decisions.

One needs discipline and commitment to analyse their spending and envision a good future. You are swimming in this idea and I am sure you like it.

You know, another good saying of Jim Rohn comes in handy in here. And I so so agree with it. He said that if someone gives you a million dollars, you better start learning how to be a millionaire if you want to keep them. That being said in regards to one's attitude towards spending.

These habits are learned from family. Some parents lack financial education themselves, so no wonder they encourage their kids "hey kid, take a loan, like everybody does". Lame and sad. We can do better. I think one has to assume responsibility as an adult. Even if you didn't have the right parents, family circumstances, you can always self educate. There were a lot of historical figures who turned rich through sheer power of self education and DISCIPLINE. Yup, this is my favourite word lol❤️❤️❤️

I agree it's said the definition of insanity is doing the same thing over and over, yet we do that to each generation and force them into the same mistakes for the sake of consensus of normality and what "worked" even if the outcome wasn't that great. People cannot see what they lost by making poor financial decisions only what they gained.

That's so true, about learning to get a millionaire mindset before becoming financially free, they say give a rich man $5 and he will find away to make $10 but give a poor man $5 and it will be in the rich mans pocket by the end of the day. In the end money is just a way to measure the value of your effort and time, if you throw it away you clearly don't value yourself and your time

You could have used that to have leisure time or spoil your loved ones. Making money takes talent, keeping money takes brains and discipline.

I might struggle with my sugar fixes but when it comes to finances I run a tight ship

Thank you for your engagement on this post, you have recieved ENGAGE tokens.

In general, very good overview @chekohler, except for this one:

A total bank run, while I don't think they'll allow it, we'll have to find ways to hold ownership of our funds or risk a repeat of the situation we find ourselves in with fiat money.

Logic will not allow it: The more fiat money they offer, its value will be lower, and less people would want fiat. The best they could try would be a ‘gold trap’ to divert people from decentralized cryptocurrencies into a controlled financial system, or – much more likely – a trap of centralized (state issued) cryptocurrencies that are ‘same as bitcoin’.

No, they never could issue something same as bitcoin, or takeover bitcoin itself. It’s the nature of things. They are only masters of deception and cannot oppose the laws of nature.

I think you're right about that, it could be a bait and switch once they've captured enough purchasing power in BTC and now hold this asset under management for people. Also, many of the banking BTC may be off-chain transactions where they can use money multipliers to "create BTC" out of thin air and just transfer it between accounts like they do now with fiat.

It's up to the BTC community to be vocal about the distinction between on-chain holdings and off-chain promises

yes, i don't understand how all the speculative funds affect markets, like Grayscale BTC (GBTC), do they actually have any BTC? like Silver and Gold ETFs, these are just speculative/tracking products as I understand it ... the effect on prices of actual, scarce products often baffles me

I'm as clueless as you, I'll need to do research on it, I know grayscale has been buying up BTC but I don't know how much of it is fully collateralised. I mean, it should be easy to buy 1 BTC for them peg it 2 to 1 to BTC and then effectively "print money" same like the USDT/Tether cartel

i just parked some gains yesterday for the first time into USDC. at least i'm able to trade into that with no fee (at least none i noticed), so that's cool

Nice and you can still earn interest in USDC with Celsius so you don’t really lose that 8-11% is a pretty sweet deal! If only this was smart contract based and not custodial based I think I’d be far more bullish on it if I always owned the keys

they can use money multipliers to "create BTC"

Yes, you are right, in fact, they are doing it right now with that ‘bitcoin futures’ thing… This is still keeping bitcoin price so low. As long as there is enough gullible people who believe that it is possible keeping bitcoin with someone else (bank, post, state, insurance company…) those scoundrels will be ‘in business’. That is the same kind of scam when gold was exchanged for ‘paper with the guaranteed interest’. Therefore, I say that a financially smart part of the humanity will survive. The rest will serve as an ugly example.

I only recently learned about the "paper" gold and the derivatives built on top of it, because people talk about gold as sound money but when you can build so much shit ontop of it then that sound properties are diluted.

At least with BTC the chain remains the only settlement layer

You paint an awfully grim picture but yes as its always been it will be financial Darwinism, I just hope BTC holders like myself won't rest and still try to push education and peaceful protest against this obvious gambling and Ponzi scheme.

Banks are trying to get more control with going for crypto.

They were never going to let BTC exist without getting their piece of the pie, but this seems to be defeating the purpose of BTC if people start storing it with them

Nice article fully upvoted.

Do you have a twitter account? As we shared it with the @hodlcommunity account I would have loved to tag you.

Thanks, really appreciate the efforts and support, Unfortunatley I don't have my own Twitter I can't keep up with whats going on there

No worries, it is good that we know it now 😃

yes, stay decentralized ! peace

Lol I’d rather have real ownership of “internet money” than no ownership of fiat money!

The best way of fighting your enemy is to join them...

Banks have a lot Good things to offer for crypto to be accepted in the world.
I Wish they do more.
Will I keep My crypto There? NO
But I like many different opportunitys

Just screaming "Banks are hell!" Will not make Something better.

Just a Jessie

Yes you’re right and I agree but they need to submit to us not we submit to them

I’m done with banks I hate them they have hurt me too much! Maybe in Sweden they are nice but here they are mean and nasty

Also we’ll see how you feel sooner or later, Sweden does have bank bail in laws so they can take your deposits to recapitalize themsleves same way they did in Cypress and Greece so I say keep an eye on them, they are sneaky

Well - I think I have live too long in a safe country.
Maybe the banks will be crusched someday and crypto will be the only solution. I hope not so . A crash is not a good way. Better if we can live side by side and people can choose for themself - if they trust banks or not

Lol fine lets do it your way but if they try anything funny I'm burning it to the ground and saying I told you so. In Fact, banks should actually not be holding crypto if they want to get into the game they need to be creating smart contracts and build tools that we choose to use or not

That one I agree. Build services to make it easier to use crypto.

This week you have been threaten me to hunt me to barbados and burn my house down and tell that it was me...

I will make a revenge!
Just have to figure out something.

Lol Its how we show love in South Africa, its all we know how to do burn stuff and hit each other and then we kiss and hug and have a !BEER afterwards.

Have you ever seen a rugby match before? Thats what we like

Can we just stop at "hit each other" and skip "kiss and hug"
I think my wife would prefer that...

Aren't you supposed to be a descendent of a Viking? I don't think they were very nice people


Hey @minimining, here is a little bit of BEER from @chekohler for you. Enjoy it!

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This is a fun subject. You should come talk about it on my show. We could have at it. Dontcha think? Did you like going on mic?

LOl sure sounds great, send me the invite, i'll ramble on and put you to sleep if you like. gosh that was a mistake okay? Give me a break

Yeah, we can chat about btc and your historical evaluation of its progress in the banking system. we'll both ramble on and put everyone to sleep. It'll be awesome.

Lol awesome, we can play some whale sounds in the background to keep everyone uber relaxed while listening

LOLOLOL!!! We should ACTUALLY do that! Very fitting. I wanna talk about whales for sure.