How Bitcoin Makes Banks Obsolete - page 3.

coinpr0n

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Quote from: BitProdigy on August 06, 2015, 10:43:56 PM

Quote from: countryfree on August 06, 2015, 05:46:32 PM

As long as there will be people looking for credit, to buy a house, or a car, they will be plenty of business for banks. And no company in the first world would be able to live without a substantial credit line. What if some customers pay late? This happens everyday...

There will always be people that want to borrow money, and there will always be people who are willing to lend money for a fee. What will not continue is Fractional Reserve Lending because it is predicated upon the necessity of people having no choice but to deposit their funds in banks and the impracticality of proof of solvency.

With bitcoin there is no need to deposit your bitcoins in a bank and even if you do, you now have the choice to only deposit your bitcoins in a bank that allow for full Proof of Solvency so you know for sure that your bitcoins are safe in sound and not being lent to low income borrowers with no job no credit or bad credit, and not being gambled on bad bets in the stock market.

This does not mean that there will be no more loans. Just look on this very forum there are people offering loans. Loans will still exist they will only exist in a more honest fashion, which is to say that lenders will be those who have excess capitol they are able to lend, instead of promising to keep your money safe and turning around and lending your money to people. Lenders will will have to be those who lend their own money, not those who lend other people's money. And I think that is a more honest system for the economy to be based on.

What kind of legal measures could someone take if the borrower defaults on a loan? And if there are none why would people lend?

BitProdigy

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Quote from: countryfree on August 06, 2015, 05:46:32 PM

As long as there will be people looking for credit, to buy a house, or a car, they will be plenty of business for banks. And no company in the first world would be able to live without a substantial credit line. What if some customers pay late? This happens everyday...

There will always be people that want to borrow money, and there will always be people who are willing to lend money for a fee. What will not continue is Fractional Reserve Lending because it is predicated upon the necessity of people having no choice but to deposit their funds in banks and the impracticality of proof of solvency.

With bitcoin there is no need to deposit your bitcoins in a bank and even if you do, you now have the choice to only deposit your bitcoins in a bank that allow for full Proof of Solvency so you know for sure that your bitcoins are safe in sound and not being lent to low income borrowers with no job no credit or bad credit, and not being gambled on bad bets in the stock market.

This does not mean that there will be no more loans. Just look on this very forum there are people offering loans. Loans will still exist they will only exist in a more honest fashion, which is to say that lenders will be those who have excess capitol they are able to lend, instead of promising to keep your money safe and turning around and lending your money to people. Lenders will will have to be those who lend their own money, not those who lend other people's money. And I think that is a more honest system for the economy to be based on.

BitProdigy

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Quote from: odolvlobo on August 06, 2015, 06:50:28 PM

I think you are ignoring reality.

People deposit money in banks and don't care about FRB, why would they care more with bitcoins? People deposit bitcoins in Coinbase, and Coinbase does not do proof of solvency. Most people just don't care about FRB as long as they believe that they will get their deposit back.

After Mt. Gox people should care!

I think the people in Cyprus and in Greece care about Fractional Reserve Banking a little more than we do right now, but I think it may become a little more important to us in the future. Wink

The beauty of bitcoin is that people who don't want to use banks or services like Coinbase don't have to. But those that want to now have the choice to only do business who do Proof of Solvency, such as Vault of Satoshi:

Quote

"At Vault of Satoshi we have always tried to embody the mantra of being an open, honest and transparent exchange. We feel it's our duty to do so when you make the decision to place your funds in our hands.

For this reason we have long sought after a way to prove our reserves to the public in a safe and reliable manner, while most exchanges issue a third-party audit, we felt that simply wasn't open enough – so today at Vault of Satoshi we are proud to announce full proof of solvency and the publication of our cold wallet."

http://www.coindesk.com/vault-satoshi-announces-proof-solvency-service/

Bitstamp has followed suit:

https://www.cryptocoinsnews.com/bitstamp-provides-proof-bitcoin-solvency-first-step-towards-real-financial-audit/

As well as Bitfinex:

https://www.cryptocoinsnews.com/bitfinex-passes-stefan-thomass-proof-solvency-audit/

But Vault of Satoshi is the only one currently that allows for full proof of solvency. I think this trend will eventually extend to all exchanges and places that people trust to hold their bitcoins. This is just yet another extension of how Bitcoin allows for innovation in finance.

BIT-Sharon

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Digital currency will accepted as payment methods, which is agreed by lots of companies on internet. This is a new challenge for the industry. Traditional currency will disappear and bitcoin is legal foundation of digital economy.

odolvlobo

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Quote from: BitProdigy on August 06, 2015, 01:41:51 AM

Banks are only necessary if people need to deposit their money in them. With bitcoin there is really no reason to keep your bitcoins in a bank.

However, it is foreseeable that people may want to keep their bitcoins safe by keeping them in a bank that they trust. Even if this occurs, bitcoin allows for PROOF OF SOLVENCY which means that everyone can verify that the bank is actually storing their bitcoins for them.

This effectively eliminates the possibility of Fractional Reserve Banking. Who in their right mind is going to give their bitcoins to a bank that turns our around and lends them to other people and makes bets in the stock market with them? Nobody.

Only those banks that embrace PROOF OF SOLVENCY will survive with bitcoin. Those banks that try to hide what they are doing with people's money or try to give some reason why people should allow them to keep only 3% of deposits in reserve and lend the rest out, will not survive. Nobody will use these when there are PROVEN SOLVENT banks now in existence.

What you think?

I think you are ignoring reality.

If people deposit money in banks and don't care about FRB, why would they care more with bitcoins? People deposit bitcoins in Coinbase, and Coinbase does not do proof of solvency. Most people just don't care about FRB as long as they are told (and believe) that they will get their deposit back.

misterycoins

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Banks, in particular, provide many services that someone will still have to provide even if old currencies were to be totally replaced by bitcoins. People will still need to borrow money, for example and other people will want to lend it.

countryfree

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Your country may be your worst enemy

As long as there will be people looking for credit, to buy a house, or a car, they will be plenty of business for banks. And no company in the first world would be able to live without a substantial credit line. What if some customers pay late? This happens everyday...

melisande

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Banks and bitcoin are two different things but we could as well have banks for bitcoin or cryptos because the conventional banks only services fiat currencies but they are not limited to deposit alone but you can as well with funds from it.

BitProdigy

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We Are The New Wealthy Elite, Gentlemen

Banks are only necessary if people need to deposit their money in them. With bitcoin there is really no reason to keep your bitcoins in a bank.

However, it is foreseeable that people may want to keep their bitcoins safe by keeping them in a bank that they trust. Even if this occurs, bitcoin allows for PROOF OF SOLVENCY which means that everyone can verify that the bank is actually storing their bitcoins for them.

This effectively eliminates the possibility of Fractional Reserve Banking. Who in their right mind is going to give their bitcoins to a bank that turns our around and lends them to other people and makes bets in the stock market with them? Nobody.

Only those banks that embrace PROOF OF SOLVENCY will survive with bitcoin. Those banks that try to hide what they are doing with people's money or try to give some reason why people should allow them to keep only 3% of deposits in reserve and lend the rest out, will not survive. Nobody will use these when there are PROVEN SOLVENT banks now in existence.

What you think?

Topic: How Bitcoin Makes Banks Obsolete - page 3. (Read 3345 times)