Are people losing faith from centralized organizations? - page 7.

Febo

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Quote from: The Cryptovator on August 10, 2020, 05:16:31 AM

Are people losing faith from centralized organizations?

It is not about faith. But when you can have decentralised money without need to trust third party to operate why on earth you would not chose that. It is money. A very worth thing. It can afford to be costly.

mu_enrico

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Nowadays, bank run would not be likely to happen because people do transactions without physical cash (cashless). Not sure what happens to @Coolcryptovator's country, but my guess is because of the recession, so people withdraw their savings to buy daily needs. Perhaps most local groceries store there cannot accept cashless payment yet?

The Sceptical Chymist

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Quote from: The Cryptovator on August 10, 2020, 05:16:31 AM

Bank reports saying, clients are just withdrawing their money, deposits are very low by comparing with withdrawal.

I don't blame them in the least. People are scared right now, and I'm sure a lot of them aren't sure whether there's not going to be another banking crisis like there was in 2008. If there hadn't been a quick solution in the form of massive bailouts back then, banks would have been failing all over and you'd be lucky if you could withdraw any funds from your bank.

In my country (the US), the situation isn't as dire as what OP is describing as far as I know. Most people I see paying for things are still doing it with their phones and/or debit cards, so it's obvious they still have faith in the banking system. Plus there's a coin shortage right now, and stores are asking customers to kindly not use cash or to have exact change.

People have been skeptical of those centralized organizations OP mentioned for a long time--that's not a new thing. The level of skepticism and whether or not people hoard cash depends on the state of the economy and whether it looks like there might be a disaster on the horizon. At present, we're kind of in the midst of a disaster (COVID-19 and joblessness), so I'm not surprised people are keeping their cash at home instead of in a bank.

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Quote from: The Cryptovator on August 10, 2020, 05:16:31 AM

~ I don't know if it is happening in your country as well. But seems people losing their faith from centralized organizations like a bank. It would happen due fair of bankruptcy or due to need money on emergency situations. On the other hand, gold and bitcoin movements saying that new investors getting in. Most probably people want to be their own bank.

What's your thought and what's the real situation of your country?

It doesn't look like losing faith on banks to me. People are simply applying the lessons on savings and one of which is to have funds to use in cases of emergencies.

Like what others are saying, people are losing jobs that's why most have no choice but to take out their money to buy necessities or to use it as capital. It's not that they want to be their own bank, most are just desperate to find another source of income to sustain their needs. You already pointed out money flowing into bitcoin and gold, there's also a massive increase in number of online businesses. You see all sorts of products from food, clothes, masks, face shields and other stuffs that are being sold/offered in various social media platforms.

Once things get back to the old normal and people going back to their jobs, money will most likely flow back to the banks.

abhiseshakana

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My friend's boss who owns several companies gave a message to all his employees to withdraw their money from the bank and save it in cash and provided information that next month's salary will be given in cash. In my country, one of the banks already has a liquidity issue.

The fractional reserve banking system that is applied in commercial banking around the world through the ability to create money (money creation), so that the money supply shifts from its balance point is a source of systemic problems of modern economic instability and is fraught with the risk of recurring economic recessions because it is built as a pseudo financial platform, and have implications for the bubble economy. The difference between assets and liabilities (fractional reserve banking) can undergo a process of loss of trust, which in turn inevitably causes banks to enter into a circle of liquidity crises due to shocks on the asset side.

bitmover

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I don't think people are losing faith in centralized organizations, but in banks and governments.

Centralized organizations are everywhere: bitcointalk, reddit, apple, Amazon, Facebook, google.

I believe that for the first time in history people are loving this new tech monopoly. Most of people love instagram monopoly, google monopoly and so on.

Centralized organizations are at their top. But now we have a decentralized world currency. And just one, bitcoin.

thesmallgod

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I do not think they are losing faith in bank but rather due to the current economic crisis. People have lost jobs while some are receiving half salary so generally, people will make more withdrawal than depositing money that has not been earning during the crisis. You talk about people queuing to withdraw their money. I think that is also expected and also people want to have free access to their money at any time they want it and that is reason why many prefer to hold their money and not bank it

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I guess that is better for them than having much of their funds in the banks not getting paid by the banks or delayed for one reason or the other. I think I did similar thing in the beginning of the crisis when banks were closed or closing. But the PoS small business operators (who acted a bit like the banks during that period) were part of reasons I stopped bothering about withdrawing most of my funds. I still think it is better not to have everything in centralized currencies though.

Oasisman

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I think it's plainly because of the pandemic. A lot of people have lost their jobs since the pandemic started, and there are still a lot of them who haven't resumed yet and other businesses were temporarily closed until everything is clear from the virus. So, withdrawals of savings is expected since these people haven't produced enough income since the pandemic, and what more else to deposit?

IMO, the rise of Btc isn't because of these people withdrawing from their banks and switching to crypto as their own bank. Though some rumors said so, like the stimulus checks Btc pump. But I believe these are still because of the post halving hype. Some old time traders and investors are coming back to crypto market.

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Quote from: The Cryptovator on August 10, 2020, 05:16:31 AM

What's your thought and what's the real situation of your country?

People are forced to use banks, especially if they are employed or have their own private companies - how else will you receive a salary or conduct business transactions? Throughout history, banks have always proven to be those who give little and take a lot - and if we only remember the recent past and the crisis that began in 2008, then it was the banks that saved themselves with public money and people were not happy about it.

In my country the amount of money is constantly increasing due to the large number of people working in foreign countries who send part of the money to domestic banks. Also in some countries, as someone has already mentioned, clients' funds are insured by the state up to a certain amount - so the collapse of a bank does not necessarily mean a loss of money.

Bitcoin is still a long way from adapting among the masses, but it would be too naive to believe that such changes can happen in just 10 years - especially when the current system struggles to stay exactly as it is now. Controlling money in the hands of ordinary people is a real nightmare for banks, and this is exactly one of the basic features behind the idea of Bitcoin.

plvbob0070

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I don't really know if it has the same situation in my country, but if you're in a third world country, that's possible. Now that we are facing a pandemic, it's inevitable for others to be in a situation where they have to withdraw their remaining money in the bank probably because they need it for their necessity. Also for people keeping funds in their hands, maybe because they have no access to banks.

However, even if withdrawal from banks is increasing as well as the number of people investing in gold and crypto, we can't really say that they are moving from centralized to other methods of investments because they are losing their trust since we're not sure if those are the same people.

Leviathan.007

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The reason is clear, because all the centralized organizations are getting controlled by the governments and usually by some corrupted people they take advantage of the price manipulation and get famous and rich every day, also call themselves banks. Decentralized organization will help the privacy and in the other hand will help the security and economy by avoiding the price manipulation and abusing the governments and centralized traditional banks.

Assface16678

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Some of the people right now have different issues regarding their banks and banks' account so they don't want to keep their funds inside those centralized organizations instead they want to hold their funds because they know what is happening on their money. If they store those funds into banks sometimes there is a transaction under the table and unexpected bankruptcy and they don't want to do that.

Right now on this pandemic outbreak, they need to have enough funds to survive, and are you still going to store your funds right there? I think not because you need to have cash and enough balance to sustain your daily needs.

Quote from: Jawhead999 on August 10, 2020, 08:28:14 AM

In my country many people withdraw their funds due to need money from this pandemic, not due to losing faith on centralized exchanges. Because they need to feed their family every day even though it's hard to find a job, and some people already got retrenchment. Only few people want to invest on gold, because it's safe and reach new ATH few days ago.

Bitcoin still not get massive adoption yet due to volatility and high-risk investment.

Today with the rise of the bitcoin there is a lot of the number of supporters with the use of this coin. One of the reasons is you handle your money and you can monitor what is in and out of your money without less hassle of checking. Also, the reason why they want to adopt this kind of coin is the volatile they can get a lot of market income by just making an investment. The buy low and sell high just this simple you can get profit instead of holding your funds into your banks you cannot get these kinds of funds.

bitsurfer2014

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Quote from: The Cryptovator on August 10, 2020, 05:16:31 AM

Bank reports saying, clients are just withdrawing their money, deposits are very low by comparing with withdrawal. That's why people encountering lots of questions from the bank regarding withdrawal. Most likely due to the global pandemic, people want to keep funds on their hands.

Of course banks are afraid of withdrawals because at the end they will eventually run out of cash and a bank run could happen anytime if people starts to panic. I don't know if this is true and if i'm not mistaken, I remember an article that says, if all depositors withdraw just only three percent of their total deposit, then banks will ran out of cash and the banking industry will eventually collapse. Imho.

Quote from: Juggy777 on August 10, 2020, 08:18:24 AM

@Coolcryptovator due to the legal laws in place many people don’t have any other alternative, but to leave their funds in banks and further this is only temporary, because once this pandemic effects start to end then they’ll once again deposit their funds back in to the banks. Also I don’t understand how can a bank ask questions to its customers if they wish to withdraw their own funds, unless there’s a rule in your country which allows banks to subject their customers to such torture?.

I can attest to your observation and have to agree with it. As in the case of my country, due to this pandemic, many people have lost their businesses and many more have lost their job that they have no option but to withdraw some of their savings to support their family's daily needs.

Jawhead999

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In my country many people withdraw their funds due to need money from this pandemic, not due to losing faith on centralized exchanges. Because they need to feed their family every day even though it's hard to find a job, and some people already got retrenchment. Only few people want to invest on gold, because it's safe and reach new ATH few days ago.

Bitcoin still not get massive adoption yet due to volatility and high-risk investment.

Juggy777

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Quote from: The Cryptovator on August 10, 2020, 05:16:31 AM

When I see the picture of our banks in my country's, it seems lots of people in the line to withdraw their funds. An analysis of my country says that people keeping funds on their hands instead of keeping into the bank. And it hasn't happened before where a huge amount of funds holding by population. Bank reports saying, clients are just withdrawing their money, deposits are very low by comparing with withdrawal. That's why people encountering lots of questions from the bank regarding withdrawal. Most likely due to the global pandemic, people want to keep funds on their hands.

I don't know if it is happening in your country as well. But seems people losing their faith from centralized organizations like a bank. It would happen due fair of bankruptcy or due to need money on emergency situations. On the other hand, gold and bitcoin movements saying that new investors getting in. Most probably people want to be their own bank.

What's your thought and what's the real situation of your country?

@Coolcryptovator due to the legal laws in place many people don’t have any other alternative, but to leave their funds in banks and further this is only temporary, because once this pandemic effects start to end then they’ll once again deposit their funds back in to the banks. Also I don’t understand how can a bank ask questions to its customers if they wish to withdraw their own funds, unless there’s a rule in your country which allows banks to subject their customers to such torture?.

Finestream

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Some people maybe losing faith on bank but majority of people still trust it.
The thing is, if people loss their faith on bank, they could also be losing their faith on the government.

It's normal that people withdraw their funds as it's needed during the pandemic, but even with massive withdrawal bank can't say no or say wait because it's their responsibility to give the money that people entrust to them for safe keeping. Maybe some banks are corrupt, but in general they are not, in fact banks have a good internal control and put the best practice in handling money.

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People may be losing faith in centralised organisations, but I've never personally heard one single person ever voice that ever, but they never had and never will have faith in a decentralised alternative. They will simply make the odd complaint and keep the status quo.

It doesn't help that many things that claim to be decentralised are fucking useless, mainly because they weren't.

Coyster

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Holding you cash is practically the same thing with keeping it in the bank when inflation/devaluation hits. The banks though provides safety of your funds from theft and robbery, you'll not be seeing people withdrawing large sums, only to keep it at home, you can be tracked and your money will be stolen, those withdrawing prolly have needs to be met.

I don't know your country, but a situation of a bank going bankrupt in my country or a first world country is next to impossible, the banking sector is responsible for your funds, with so many measures in place to avoid insolvency. And in a situation were the bank is going through a rough time, you'll get your funds back, though devalued, and that is why investors choose to buy gold and bitcoin to avoid that, but rather make profits.

The Cryptovator

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When I see the picture of our banks in my country's, it seems lots of people in the line to withdraw their funds. An analysis of my country says that people keeping funds on their hands instead of keeping into the bank. And it hasn't happened before where a huge amount of funds holding by population. Bank reports saying, clients are just withdrawing their money, deposits are very low by comparing with withdrawal. That's why people encountering lots of questions from the bank regarding withdrawal. Most likely due to the global pandemic, people want to keep funds on their hands.

I don't know if it is happening in your country as well. But seems people losing their faith from centralized organizations like a bank. It would happen due fair of bankruptcy or due to need money on emergency situations. On the other hand, gold and bitcoin movements saying that new investors getting in. Most probably people want to be their own bank.

What's your thought and what's the real situation of your country?

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