The Innovator's Dilemma - (Bitcoin and the banks)

vssa

full member

Activity: 207

Merit: 100

Quote from: marcus_of_augustus on February 18, 2013, 06:27:45 PM

Quote from: vssa on February 18, 2013, 01:58:35 PM

I think we need to open a bitcoin fund that will open short positions on Western Union Co (NYSE: WU),paypal and other credit card companies not to profit just to make a point...

Heh ... maybe not poke the hornet's nest too much just yet.

It will be delicious enough just watching them refuse to adopt, even as we eat their lunch in front of them.

Edit: I guess we could always run a book on betsofbitcoin to see which major bank adopts/offers bitcoin services first.

No I mean seriously lets open account on interactive brokers( http://www1.interactivebrokers.ch/contract_info/v3.8/index.php?action=Details&site=GEN&conid=95966725 ) and fund it with bitcoins by issuing colored bitcoins(bitcoinx.org)that will represent the holding of options at interactive brokers and will pay dividends from profits to shareholders(colored bitcoins owners)

of course we will be as transparent as possible and will publish weekly the account balance and all relevant info also we will say that it is more of a social commentary than the pursuit of profit.

I am just saying that if you own bits why not to short the "competition" with 5% of your BTC holdings....

marcus_of_augustus

legendary

Activity: 3920

Merit: 2349

Eadem mutata resurgo

Quote from: vssa on February 18, 2013, 01:58:35 PM

I think we need to open a bitcoin fund that will open short positions on Western Union Co (NYSE: WU),paypal and other credit card companies not to profit just to make a point...

Heh ... maybe not poke the hornet's nest too much just yet.

It will be delicious enough just watching them refuse to adopt, even as we eat their lunch in front of them.

Edit: I guess we could always run a book on betsofbitcoin to see which major bank adopts/offers bitcoin services first.

vssa

full member

Activity: 207

Merit: 100

I think we need to open a bitcoin fund that will open short positions on Western Union Co (NYSE: WU),paypal and other credit card companies not to profit just to make a point...

Severian

sr. member

Activity: 476

Merit: 250

Quote from: hazek on February 17, 2013, 08:57:46 PM

You're still left with profits in fiat though so I don't know what good will do ya.. Cheesy

Move them into btc, natch.

Zangelbert Bingledack

legendary

Activity: 1036

Merit: 1000

Someone on r/Bitcoin today posted a perfect example of this phenomenon from the steel industry:

http://www.reddit.com/r/Bitcoin/comments/18pcw7/what_happens_when_asics_start_shipping_are_gpu/c8gvlw1

cypherdoc

legendary

Activity: 1764

Merit: 1002

Quote from: n8rwJeTt8TrrLKPa55eU on February 17, 2013, 05:51:24 PM

Certain specialized types of banks like those offshore in the Caymans, Monaco, Switzerland, etc. catering mostly to private banking customers, are definitely going to get killed by Bitcoin. They simply will never be able to compete on privacy or security.

But perhaps the outlook for smaller local banks might not be too dire if they have other consistent sources of revenue that they can fall back on (e.g. mortgages, loans, investment advisory, safety deposit boxes), or can reinvent themselves as Bitcoin service providers or handlers for offchain transactions.

As far as which legacy money business gets killed most quickly by Bitcoin, I'd put my bet on transfer businesses like Western Union. Buying puts on WU might be one of the few trades that will compare to holding BTC in terms of rate of return over the coming years.

see that big drop in the middle? shorted that one perfectly back in Nov and brought it up in my Gold Thread. that one was worth a lot.

guess what? get to do it all over again. MACD crossing again to the downside. one day it will be a zero.

marcus_of_augustus

legendary

Activity: 3920

Merit: 2349

Eadem mutata resurgo

Quote from: kiba on February 17, 2013, 09:32:33 PM

If everybody knows "The Innovator's Dilemma", why do they act like it's not true?

lol, this is so true. It's like people cannot help themselves.

kiba

legendary

Activity: 980

Merit: 1020

If everybody knows "The Innovator's Dilemma", why do they act like it's not true?

hazek

legendary

Activity: 1078

Merit: 1003

Quote from: Severian on February 17, 2013, 07:24:57 PM

Quote from: n8rwJeTt8TrrLKPa55eU on February 17, 2013, 05:51:24 PM

Buying puts on WU might be one of the few trades that will compare to holding BTC in terms of rate of return over the coming years.

Shorting the big boys is the last, best use of fiat.

You're still left with profits in fiat though so I don't know what good will do ya.. Cheesy

Severian

sr. member

Activity: 476

Merit: 250

Quote from: n8rwJeTt8TrrLKPa55eU on February 17, 2013, 05:51:24 PM

Buying puts on WU might be one of the few trades that will compare to holding BTC in terms of rate of return over the coming years.

Shorting the big boys is the last, best use of fiat.

TraderTimm

legendary

Activity: 2408

Merit: 1121

My guess is the way some banks will survive will be to create exchanges and matching engines, but also try to enforce all the "know your customer" requirements. Its either that or they operate full nodes to get income out of transaction fees once that becomes commonplace.

The more likely outcome is they flounder for a while, try to legislate bitcoin out of existence, fail, then grudgingly a few of them will adapt.

n8rwJeTt8TrrLKPa55eU

hero member

Activity: 588

Merit: 500

Certain specialized types of banks like those offshore in the Caymans, Monaco, Switzerland, etc. catering mostly to private banking customers, are definitely going to get killed by Bitcoin. They simply will never be able to compete on privacy or security.

But perhaps the outlook for smaller local banks might not be too dire if they have other consistent sources of revenue that they can fall back on (e.g. mortgages, loans, investment advisory, safety deposit boxes), or can reinvent themselves as Bitcoin service providers or handlers for offchain transactions.

As far as which legacy money business gets killed most quickly by Bitcoin, I'd put my bet on transfer businesses like Western Union. Buying puts on WU might be one of the few trades that will compare to holding BTC in terms of rate of return over the coming years.

marcus_of_augustus

legendary

Activity: 3920

Merit: 2349

Eadem mutata resurgo

http://www.claytonchristensen.com/books/the-innovators-dilemma/

Many of you may have read this book, with it's central thesis being in a nutshell

Quote

When big companies fail, it’s often not because they do something wrong but because they do everything right. Successful businesses, Christensen explained, are trained to focus on what he calls sustaining innovations—innovations at the profitable, high end of the market, making things incrementally bigger, more powerful, and more efficient. The problem is that this leaves companies vulnerable to the disruptive innovations that emerge in the murky, low-margin bottom of the market. And this is where the true revolutions occur, creating new markets and wreaking havoc within industries.

I wonder how applicable it is to the case of Bitcoin and the banking/payments industry. The banks are hugely profitable right now, and appear to be doing everything right to look after their wealthiest customers and profit handsomely from the high-end margin share of the market, e.g. govt. bonds. But are they ignoring the "disruptive innovations" that are occurring in the murky low-end of the market that will ultimately cause them to fail?

It seems it might be we have a textbook case example for the The Innovator's Dilemma happening right before our eyes. How long can the banks ignore Bitcoin before it will be too late for them to avoid failure by obsolescence, months, years, decades?

Which banks will be most likely to provide bitcoin services for their "low-end" market share first, small regionals, mega-banks, S&Ls?

Or will they all be too rule-bound by regulations and red-tape (much of which they crafted themselves to stifle competition) to even attempt incorporating bitcoin technology innovations into their systems?

Topic: The Innovator's Dilemma - (Bitcoin and the banks) (Read 1538 times)