Mark my words, before too long banks will be offering to hold your bitcoin for you (securely of course) and transferring between fiat to btc, and back, with little to no fee as incentive.
I'll say it again. I would trust some of my btc to a traditional bank, as long as
- The deposit is backed by (audited) crypto or undilutable bank stock (ordinary bonds would be OK too)
- I get my interest (in btc). A reasonable 10% or something like that, depending on market conditions.
These banks will find out that luring old school hodlers to part temporarily with their precioussss takes more than a flashy brochure.
They can shove 10% up their ass. I'd rather support a public firm at those rates.
How would you support a public firm with your bitcoin?
10% sounds nice to me because at current prices, it allows a hodler to extract a decent living in decent places
on double digits deposits. Imagine someone well into triple digits opening such accounts on different banks. (Inb4 jews, usury, Rube Goldberg).
And any higher than that they can't guarantee anyways. I'd consider a bank safe with a hardware or paper wallet if it was insured for the fiat equivalent of the Bitcorns regardless of market situation, but I don't think there are any insurances that cover dynamic valuations without extracting insane fees that would render the whole deal uneconomical.
Not that I believe it's going to happen. But that's what I meant by "a fancy brochure" - that they can't offer anything like what I'm asking. The same I meant by "backed by crypto", and by "uninflatable bank stock" (does anything like uninflatable stocks exist at all? Let's ask Torque
) - collateral they
will lose if things go south.
Bitserve's sane, practical words raise similar issues.
They couldn't give any interest rate unless they were allowed to:
a) Running fractional reserve
This wouldn't be allowed since "backed by crypto" also implies "auditable by the end user". I'm thinking positions backed by individual public addresses or LN channels. Not going to happen, I agree.
b) Shorting the market (selling YOUR BTC)
And give me back 110% of it each year. At cheaper prices of course, but how would they manage a btc bank run? They'd need to buy back and the squishy-squeezy sounds would reach the moon a whole day before the corn.
There's absolutely no way I can think of... unless a market of fully insured Bitcoin lending would exist and offered better returns than those 10% they would give you... which it doesn't.
Indeed. But if it did, their profit over 10% would be justified by swallowing the counterparty risk for me.
You could be glad if they don't charge you a custody fee for holding your BTC.
Reality, again. Thanks for spoiling my dream.