The beginning of the end of bitcoin
Did you think you would beat the System ...?
Banks will now be able to hold Bitcoin as regular deposits.
Wow, this is amazing!! Mass adoption is coming. We won brothers. We fucked the system!!!
Not only we will not fuck the system but this is WORST EVER BITCOIN NEWS. And I will explain why.
Once bankers have access to our bitcoin, they will do exactly what they have always done with our deposits. They will exploit them to create money out of thin air. When we deposit 1000 USD in the bank, it does not respectfully keep them aside, waiting for when we will ask for them (she hopes not to ask for them), but invests them and, most importantly, lends them. They lend money, many times as much as they actually own, essentially making money from nothing.
Exactly the same (fractional reserve banking) will happen with Bitcoin. For every 1 Bitcoin deposited by the ignorant consumer, the bank will produce 10 "paper" Bitcoin in the form of eg IOU (I Owe You - promissory notes).
Basically, you will say to the banker "keep this bitcoin for me" and he will tell you "of course, bring it here, and get this certificate that says I owe you 1 Bitcoin until you ask me back, it's the same thing". NO, IT IS NOT THE SAME. You give them the keys to the real thing, written in the blockchain and unique in the bitcoin world, and they give you a toilet paper. Some people will give it to them. Because they are clueless and semi-educated about cryptocurrencies. The same system made sure through the media (that the only news you heard was about the bad Bitcoin) to be semi-educated, to know the few and especially the bad things about cryptocurrencies, to be afraid of them, so that if and when the time comes to dare to touch them, to do it through someone you trust like your bank.
Except that Bitcoin was not created to trade with bankers. It was created for the exact opposite reason, to bypass the greedy and unnecessary intermediary, to make every citizen a banker of himself, to give back to the people a little power away from a financial system that disappoints them every time.
And while the otherwise diabolical fractional reserve may be a necessary evil for the economy to function (since lending gives businesses the opportunity to open up), the same is not true for Bitcoin. You can say "I do not care, I prefer the bank to keep my bitcoins, even if it does what it wants with them. Maybe it will give me interest back, I am fine with this" In fact, you ate the cheese and got caught in the mousetrap because every bitcoin delivered to a banker, gives more power and control to the system that is supposed to be fighting.
More control means more influence on price, and in essence, manipulation. Exactly what they did with precious metals, gold, silver, etc.
In other words: The 100 thousand or 1 million that you hoped for Bitcoin to reach (that's why you bought it and deposited it in the bank, let's not be fooled) WILL NEVER reach it. Because they are not going to let go, as long as they are in control. Or even if they leave it, be sure that you will not be there to seize the good profit.
IF YOU CAN'T WIN THEM, GO WITH THEM ... The Bank-Bitcoin marriage is not a victory, but the condemnation of the father of cryptocurrencies. As the president of the world's largest financial group, CME Group, said in 2017: "We will tame Bitcoin." And that is exactly what they are doing.
Bitcoin failed as a cryptocurrency. Its technology is already outdated by better altcoins but mainly failed because it will soon officially serve the interests of a system that wanted to overthrow, and not the people. Whatever happens now, even if it reaches 100 thousand, in the long run, it has no future because it will be forever chained in the hands of the banks. Maybe that's why it is rumored that Bitcoin visionary Satoshi Nakamoto, a real anarchist, had the balls and the intelligence to deal with a rotten financial system which is doomed to cause crises, had abandoned the project towards the end leaving it to be completed by the rest of the team. Because maybe he was thinking about what we all know in depth - that the system is not defeated.
And that's why some of us from the beginning bought cryptocurrencies like the banking friendly XRP, which plays ball with the "enemy" without hiding, and in fact, is much more decentralized than Bitcoin has ever been. In the end, even if we look at it as an investment, if you can not fuck the system, at least take care not to be fucked by it ...
However, Bitcoin did not fail as an idea. It established the foundations for the greatest economic revolution of the millennium, the evolution of digital money. It can be manipulated until it disappears, but it shows us the way for a promising technology that will forever change money as we knew it, therefore it succeeded. It certainly rocked the system firmly. Maybe one of its "kids" will give the people economic sovereignty. It could be the promising ETH, XRP, DASH, or some other smaller altcoin or one that has not even been created yet.
Alta Vista was the first search engine but Google is the one that overtook it and conquered the world. It does not matter if Bitcoin is not the one that will prevail. In investments, there is no room for sentimentalism, otherwise, you will be ruined. You should not bet on the horse which you are emotionally attached, but on the horse, you believe will win ...
CONCLUSION: The entry of banks into the crypto game is a bad omen (in the long run) for Bitcoin. If we played Monopoly, it is as if the most spoiled brat child takes control of the bank. The game won΄t be fun anymore.
But for cryptocurrencies in general it is a good thing, because in essence the same people who fought us, now "normalize" the concept of cryptocurrency / digital money in the consciousness of society, paving the way for further development. Those who want to make money from this story, all they have to do is to study and keep their eyes open for the right horse.
Posted Using LeoFinance
There is one flaw in your theory. Custodial assets are not part of the fractional reserve system and thus, not to be lend against.
Custodial assets are held for safe keeping (for a fee of course) and, in most instances, they custodian does not have access to the funds. There are times when the custodian is given the power of attorney to handle certain obligations within the account, for example, the custodian is operating on behalf of a minor.
That said, not your keys not your bitcoin takes on new meaning in the banks. Anyone who puts their bitcoin in a bank obviously has no idea what is going on.
As for the paper of Bitcoin, we already saw that with the future market and other derivatives that are out there. Of course, they arent true bitcoin but people are trading in them anyway.
Posted Using LeoFinance
Thanks for pointing out the flaws of my theory.
For those of us who have been dealing with cryptocurrencies for years, it goes without saying that if we do not have the keys, we do not have the coins. But a lot of newcomers to the crypto world are not aware of this.
I agree that we have seen already the trading of the price of bitcoin without keeping the coins but bitcoin started with a totally different philosophy.
Posted Using LeoFinance