Topic: Cryptocurrency Banks: needed? - page 5. (Read 794 times)

Banks in crypto is a complete opposite of the essence of bitcoin and would defeat everything that bitcoin stands for which is decentralization. Banks don't become banks because they keep money or they accept deposits or issue loans at an interest rate but they are banks because they comply and continue to comply with the law of the land being overseen by the central bank.

Coming to the crypto bank, who then makes the law, who issue the license, who collects the insurance deposits, who confirms the appointment of directors, who ensures that best practice is kept to the highest level and a host of other conditions that must be met for any business to be regarded as a bank. Ensuring all of this in place has defeated the essence of crypto currencies.


The last part of your message only shows that Xapo is just a wallet service provider that provide services similar to a bank but not a bank.

Xapo is a crypto bank in a sense. They are custodians of thousands if not hundred of thousands of private keys which are held by them, and it's their responsibility to keep them safe. Apparently they have an underground cold storage bunker somewhere in switzerland, we have at least picture evidence and im sure there are videos so we can assume that it's all real, im not sure if they've been audited. I would know all of these details if I was choosing them to hold my money obviously, but the idea is that they are indeed a bank. You should also look with massive detail about how much of what you are holding will they cover in case of bankruptcy. Since they are a private company, it could be that you would lose everything in case they file for bankruptcy, so have that in mind.

Anyone knows if there already exists such an idea of Crypto bank?

It will be good if we actually have a cryptocurrencies bank and which should serve as a commercial bank to cryptocurrencies community.This will unified many things in cryptocurrencies and it will promote blockchain technology very well. We would need to have bitcoin price stable  and other cryptocurrencies before this can work very well as the instability or fluctuations in price will not make this work.

I agree with those who say that cryptos were supposed to get rid of a middle institution, but still if it become of everyone's use, will it still be comfortable to operate as it is now? If billions of people will be "their own banks"?
I think we will need if not regultaion but a place where we can do a lot of operations with currence as we do with fiats.

Crypto-Currency bank already exists, it's called... Bank!  

Digital banks deal with local country's currency, but they are digital, you don't need pape money, all the transactions can be done virtually, but you aren't using a decentralized platform, you are using the bank's centralized one. And even you use a "Crypto-Currency bank" it will be centralized anyway, because you will using them as third party service, they will be under control.

I believe there wouldn't be any difference between the currently local centralized bank's system and the Crypto-Currency bank's system you are talking about.

it is good to have a cryto currency banks but I'm afraid this will only lead to incurring too much lose for the banks who would going to hold our funds since the value keeps fluctuating and seems that majority are to increasing value rather than deflation. I used to be in banking institutions that's why I don't just look on the benefit of depositors but also the bank that will hold our funds.

Absolutely yes! We do need cryptocurrency banks. They offer low prices for transactions, great privacy and fast exchanges.

Crypto is perfect the way it is, at least that is what I can say and I also believe many of us may have the same mind set. You may think that crypto don't have a bank, what do we call the exchange and wallets? They serve same purpose. In the term of collecting loans, an exchange may decide to implement that provided that the collecter will have to verify themselves through KYC and give something as collateral.

They are needed, like it or not. As you said, we need loans, we need creditors, and we need to be able to hire someone to hold custodian of our keys because we don't trust themselves (some people find it easier to pay someone to hold your bitcoins rather than having to trust yourself to remember passwords, for example I have lost access to some hard drives which I encrypted and now I can't access them because I forgot the password) so yes banks are needed. The question is, are they going to adapt, or are they going to try to endlessly try to crush bitcoin (which is impossible and a waste of time and resources).

Kind of a mixed bag on this one because on one hand it would be safer to have funds in a sort of decentralized bank if that is possible but on the same hand we have the bank in our hands which means we don't need bank access. It is however safer to have funds in a decentralized network than it is elsewhere but a bank safe is just as safe as this.

I think the only reason anyone would want a cryptocurrency bank would be so that they'd be able to make loans. Same with lenders, they want their money to be able to come back complete. For keeping the money, cryptos in themselves should suffice. If only the transaction time don't take hours, you can even say crypto would be more liquid (assuming of course that you are not converting to fiat).

There's some need for it yes, but the issue is they're vulnerable to being hacked and won't be able to reverse money stolen like regular banks do. Frankly, having your funds with the cryptocurrency bank wouldn't be all so different than keeping your funds on an exchange. The only difference is the bank may offer more payment-type services than an exchange would offer because frankly that's not part of their scope of business.

maybe you should list the things that you think a bank is offering but lacks from bitcoin and is required for the "functioning properly" so we can discuss them instead.

you already mentioned two things.
making deposits. deposits where? i don't get it. you control your money when you use bitcoin, you have access to them at all times and you don't need to put it with some third party and use it when they allow you.

obtaining loans? i'd say this is not a necessity for "functioning properly". there are people who never take a loan and hate doing so. and it is not a required thing in our lives. and even if needs be, you can always take a loan from someone else without a bank in the middle.

i don't think that we need a crypto bank. What makes cryptocurrencies actually interesting is that there isn't a need for a trusted third party. Putting a bank between crypto investors and the crowd actually Leeds to the well known conflicts of interests, which bitcoin is actually aiming to solve

We already have cryptocurrency banks but they call themselves exchanges, or online wallets, now to answer your question more directly banks for fiat will always exist that is the way the economy works but for bitcoin we do not need banks, we are our own bank, but then you may ask how are we going to get loans to buy houses or anything like that? We wont, we will return to a time that the only loans given were for productive endeavors.

Local fiat and Cryptocurrencies would never collide to each other since they do have their own field. Cryptocurrency banks will really make the essence of decentralization would be useless. What are the purpose of wallets being created if there are banks? For sure people would still choose up to hold their coins on their own wallets than on tending to put into those banks. I know your point and things in mind but I would say its not really possible.

it is not a good idea to create a bank for cryptocurrency. if they do the exchange "Coin" to "$".
The bank will not be stable and will easily get bankrupt . because of the behavior of every price of the crypto.
and i think if there is a cryptocurrency bank , Loaning will be not available. and only Storing and Withdraw is
the only Choice.
i think we should let our Wallets and some Legit Coin exchanger do that banking system.
 

A bank can be said to perform two different functions.

The first function is that it allows you to deposit your money and have it safely stored. Today, of course, when we use digital money, there is no deposition of physical money (cash aside). Rather, the customer pays for access to financial infrastructure which allows them to pay by card in stored, withdraw money from ATMs etc.

The second function is that you can borrow money from a bank in exchange for a fee, the interest rate. In order for the bank to have any money to lend, it must attract customers willing to lend their money to the bank, again in exchange for a fee, or an interest rate.

These functions are actually different, but in practice they are not. As far as I know, there is no bank where I can choose to deposit money for a fee, but also say that the bank is not allowed to lend this money to anyone.

Cryptocurrencies can, and perhaps will, eliminate the first function, at least to an extent. Anyone can have a wallet on their phone or computer, and they only need an internet connection to transfer their money. Possibly, the payment hubs which are hypothesized to develop in the lightning network will do something a bit similar to the first function. There will be no deposition with them, but you might pay them a small fee to route your lightning transactions.

The second function will of course remain, as it is integral to the economy. I therefore think banks will still be around, but mostly serving the second function. If fiat currencies are replaced by cryptocurrencies, this will have a tremendous effect on the banks, as they can no longer benefit by tapping into the cash flow from the central bank.

To me primary thing why cryptocurrency exist is to cut of the middle man. But these crypto banks are quite opposite of what crypto agenda should be, in my opinion. They are there to make profit, although I don't say that your investment should not be profitable if they are some well known crypto bank they could potentially get you nice profit. But I tend not to touch things I don't want to be in our future, that's why I personally wouldn't invest.