Topic: Bitcoin will do to the banks, what email did to the post office. True or false? - page 2. (Read 3777 times)

Banks still have a purpose!  They're not inherently evil.

Just, the ones we have now are the scum of the Earth.  A bank which operates on BTC is a good thing, as long as they don't attempt to issue BitDollars, and then later lobby to take us off the Bitcoin standard

+1

This thread starts with a false premise; namely that the Internet with email is killing the post office and that somehow Bitcoin will deliver the coup de grâce. Nothing could be further from the truth. Yes of course the Internet and email has drastically reduced the market for first class letter mail and if this had been the only impact the post office would have been out of business years ago. The Internet however has created a whole brand new market for the post office in parcel delivery as more and more people turn to Internet for online shopping. A few days ago I went to the local post office to pick up some parcels and the man in-line in front of me picked up a television set. Now enter Bitcoin into the picture. Bitcoin encourages international e-commerce and this is one area where the post office beats the courier companies hands down at least here in Canada. Why because the courier companies charge ridiculous brokerage and other fees in order to clear a package through customs. I have seen UPS for example charge 50 CAD to "broker" 3.50 CAD worth of GST on a 50 CAD item a few years ago.

By the way the package I picked up at the local post office was purchased from the BitcoinStore and paid for with Bitcoins. If there is one organization that stands to benefit greatly from Bitcoin is actually none other than the post office.

My take with the banks is that while Bitcoin will take some of their existing business away, it will also open a host of completely new business opportunities for them. Who would have thought for example 30 years ago that the post office would be in the TV set delivery business.

Cheers

I think the wiki does a good job about the big picture scalability options:

https://en.bitcoin.it/wiki/Scalability

I think the user error problem will probably be solved with hardware wallets.

https://en.bitcoin.it/wiki/Hardware_wallet

Another fair point....  it's incumbent on me to dig out the threads where this is discussed.  The big blocker to mainstream adoption in the absence of "trusted" intermediaries such as bank-like entities that stands out to me is the inability of regular users (and advanced users at times) to look after themselves online...  i.e. it would be interesting to see discussions around wallet backup/protection that reflect users' inability to backup their systems or choose good passwords and without requiring trust of a third party.    I'll do some digging (if you have links, that would also be good)

I agree this is the state of Bitcoin at the moment. The problems are known to be solvable though, as long as the solutions are actually implemented.

I don't disagree with your assessment but it doesn't make the "federated" outcome I outlined any less likely. Put another way: if Bitcoin goes mainstream and a few banks start offering Bitcoin accounts, my money would be on them capturing the majority of "retail" users before long. 

I mean: if Cyprus was not enough to trigger queues outside banks in Italy, Greece and Spain this week, what would detach the average person from their affection for lending their wealth to banks from whom they may not get it back?


That is a fair point: the Bitcoin network, today, is wholly unsuitable as a mechanism for storing and transferring my parents' money (my usual test for whether a technology is ready for non-technical mainstream users).  That's not to say things won't change, of course.

It will only be advantageous for the thieves, inside and outside the bank, who eventually loot the accounts of anyone foolish enough to entrust their bitcoins to a third party.

I submit this is the desired outcome of anyone advocating that Bitcoin remain deliberately limited such that most users will not have the option of maintaining control over their own funds.

Yes - exactly!  The analogy isn't perfect but, as you imply, the vast majority of email users access their service through an intermediary (GMail, Yahoo, their employer, maybe their ISP, etc).  Vanishingly few run their own server.

My claim is that the same will be true for Bitcoin: should it take off big-time, most people will interact with the Bitcoin network indirectly; their primary relationship will be with an organisation that looks indistinguishable to a bank.   My prediction is that, in time, they won't just be indistinguishable to banks, they will *be* banks.  Most likely, some major banks will start offering Bitcoin accounts and others will buy their way into the market by acquiring services such as Instawallet and the like. 

Going further, my suspicion is that deflationary effects and the rise of transaction fees will be such that, even for those who are sufficiently tech-savvy, it will be advantageous for most, if not all, people to access the network in this way.   Just as nobody would transfer $10 over Fedwire or the UK's CHAPS, nobody will use the core Bitcoin network to transfer a couple of satoshis.

For the loverboy? 

Seriously though, crowd funding is a great example of something that really replaces part of what the banks do now.

But crowd funding has nothing to do whatsoever with bitcoin. It came years earlier.

By that logic, your conclusion does not make sense. In the case of email, most end-users don't interact directly with the system (i.e. having their own mail server). If Mail/E-Mail = Money/Bitcoins, then Gmail = Instawallet, isn't it?

I believe banks are gonna be here for a long time regardless of Bitcoin. Theres always those who prefer the "old way"

This is mostly true, I think.

Email took personal communication away from the Post Office.  Hardly anyone sends letters to loved ones any more, finalizes plans for parties or get-togethers, exchanges news with people they've known forever but don't live near, etc.

The Post Office has retained - and even expanded - its business use case.  Most of eBay uses it, a lot of Amazon, dead-tree advertisers, and so on.

By the same token, I think banks will lean more and more to the commercial side of things.

Hasn't that always been the point?  To take back control of our own money?

And banks will have so much less opportunity to fuck with the world, once we're less dependent on them.

False.

Ask yourself: do you expect non-technical retail users to interact directly with the core bitcoin network if/when this takes off big-time?  Where transaction charges for every payment will become the norm? With complete transaction finality (and hence none of the consumer "protections" they have, rightly or wrongly, come to expect)? With the risk that a single computer virus could wipe out their entire net worth?

I would argue no. I would not expect non-technical retail users to interact directly with such a system.

Just as I would not expect them to hold an account with a central bank and transact over a country's real-time gross settlement system every time they need to make a payment.

Instead, I would expect retail customers to transact through intermediaries, whom they would trust to look after their balances, provide payment, reporting and other services.  Institutions that look very much like banks, in fact.

Now, in the absence of a central bank that can act as lender-of-last-resort and so on, it will be critically important for consumers to *choose* the right such intermediary but, as the citizens of Cyrpus are discovering this week, that is true in the non-Bitcoin world too.

So it doesn't take too much of a leap to imagine a world where deferred net settlement / ACH systems crop up to handle high-volume/low-value payments and where it is "banks" who provide the safekeeping/account handling services.... with the core bitcoin network doing what it does best: performing the role of a sound monetary authority and running the core RTGS.

Will it be the current set of banks who corner this market?  I wouldn't bet against it...

2 words - Crowd funding

Email didnt put the post office out of business, but it changed the way they did things. Imagine what they thought of instant and free messaging technology when it arrived on the scene. So now we have instant and free money transactions. I think its a fare comparisum

I'd say false, as there are some properties of Bitcoin that are quite different to "regular" fiat money. One of the most obvious would be the limited supply.

It has some uses, no doubt about that and might be attractive to some people - banks on the other hand, as much as some people despise them, also have their uses though and I know even of some projects to build community/"fair" banks.

Maybe just like post offices banks will adapt a bit if Bitcoin (or something with similar concepts/properties) really succeeds - but just look at Paypal which was the last big "bank killer" with the vision of allowing immediate transfers worldwide for everybody and what they became nowadays...

Another thing to consider is that bitcoins are heavily dependent on public electricity and network access as well as access to general purpose computing devices that allow you to run your own code.

In a few years, Average Joe won't be able to afford a house. Then again, the banksters of today will be the Bitcoin scammers of tomorrow.

False. Bitcoin will not stop the banks from doing what they do right now. Namely investing, funding, speculating, trading, currency exchange, money creation etc. etc. Bitcoin just adds to those possibilities.

What will the average Joe do in a few years from now when he wants to finance his home? See his bankster? Precisely.
What will Joe the plumber do when he needs a loan for business? See his bankster? Precisely.
What will Jane Doe do when she needs Kenian Shillings for her Diani Beach loverboy? See her bankster? Precisely.

Bitcoin may or may not replace certain parts of the existing banking system, but on the other hand it will also open up new opportunities for it.