Topic: What do you think about Fiat and Banks? Can Bitcoin solve the problem? - page 2. (Read 585 times)

It's just pointless to keep money in the bank for those periods because you cannot get any added value from the interest compared to the interest Bitcoin can give because of its volatility. It's just the fear of theft and because most people are not awear of Bitcoin, that makes them keep their money in the bank for a long period of time when they could just use it to stack up some BTC.


That's not true, we would have even more value than the fiat because Bitcoin has a maximum supply, whereas the fiat can be printed by the government anytime they think they need to, as the OP stated.


This is not a challenge; even older people can learn to operate an Android, iOS, or Apple device if they are tough. Humans are open to learning new things almost every day, and it would not be a bad idea to teach them how to store their bitcoin in their wallet and secure their password. If you are also referring to people who are too old, well, they will have children, grandchildren, or relatives that will cater to their needs. Just like my grandma, who's 82 and still strong but doesn't go to the market again, doesn't go for groceries again, and is just either going to church or checking her garden, her children do buy everything she needs. So, people who are not too old can still learn to operate their asset safely.


[/quote]Banks can collapse, but the entire banking system cannot collapse, [/quote]

Why can't they all collapse? Do they operate differently or in any way more uniquely than others?


Is that, ideally, the best thing to do?


So are you insinuating we should keep enduring the devaluation of the purchasing power of money in the market until $10,000 cannot buy a liter of olive cooking oil? Or until $500,000 can't pay rent?



I have a question for you, mate: if perhaps you are the person that puts your money in the bank, and after it collapses and you cannot get your money back, would you still look for another bank to put your money in or advise any of your friends to keep their money? How about when you find out that Bitcoin gives you full control of your money? Would you not adopt it? That is definitely what people will do when the time ripe. I feel the time is gradually ticking down.

There is nothing Bitcoin could solve. Bitcoin is simply a digital currency having a volatile market value which benefits investors or users as an asset or investment. Whatever characteristic banks are having, simply determines its characteristics as being regulated by government sectors.Slowly becoming traditional? Fiat and banks are already traditional mode of payments for years or decades. Value decreases day by day? How come? And in what instance Bitcoin will be the aid because of the tendencies for a price increase? In the first place, the market price of Bitcoin is not growing in a consistent manner. Profit therefore is not assured. When it comes on inflation, we somehow cannot do anything about it because it is a reflection of economic status across countries around the globe. We may view this technology as something beneficial but aiding problems is really sketchy even for this industry.

I honestly think it's outrageous that fractional reserve banking is legal. I know that this is what banks do, but I think the risk is just way too high for users. What's worse, people often don't have much choice, they use their banks accounts without wanting to use them just because other things are build around having a bank account. In my country, if you are employed, you can't even choose your own bank and each time you go to work at another place, there's a strong chance you'll need to open another bank account because it is the employer who chooses the bank to work with and all employees get their payments to the accounts of this specific bank. Banks need to find other ways of making money, relying on revenue from the fees, ads in their apps and on websites, partnerships with other companies etc. It's not normal that they can play with the money of customers as they see fit and then if suddenly too many people want to withdraw just file for bankruptcy with a very solid chance of not even facing criminal charges for robbing customers and losing their money. I'm really happy that Bitcoin is not like this at all, but crypto exchanges might be, and we need a better system with banks in any case because they are an integral part of today's economy and lives of so many people.

Fiat, bitcoin, gold... all are man-made products, and they are worthless if not trusted by people. Value is created from people's beliefs, as long as people have a need, it will always be valuable. Fiat is worthless, but your life is attached to it, without it I am sure you cannot survive in this world. Bitcoin is virtual, and worthless, but it has brought freedom to many people, turned many people from poor to rich, and helped many people have the life worth living that you and I have always dreamed of.

Fiat and Bank are complementary to each other but currently fiat and banking systems are slowly becoming traditional systems. Especially when fiat money is stored in a bank, the value of fiat decreases day by day. Especially in our country, due to rising inflation, the liquidity of capital accumulated in banks has started to decrease slowly.
In all these cases only Bitcoin can solve this problem. I think the amount of money I have in the bank is slowly depreciating due to inflation, but in all these cases if I had converted my capital into bitcoin or gold instead of storing it in fiat, my savings would not have been affected by inflation.

Food for thought: Interest rates do not even approach the capital appreciation Bitcoin has had in the past 3 years. Hell, interest rates in the past 3 years don't even approach the appreciation in Bitcoin capital since last month. They're near zero in my country. No reason to hold money in the bank other than to make electronic transactions.

Even more food for thought: in contrast with large banks, crypto-exchanges can't get bailed out, so their CEOs are not incentivized to spend money recklessly. But when a big bank makes a mistake, or acts irresponsibly... Brrr!

Anyone must be familiar with the system of saving money in a bank, we only hold the numbers of all the money we have in the savings book, while we never know whether the money is in their safe or not.

I experienced a quite surprising incident in 2021, when I wanted to take my savings for business purposes, but to my surprise they asked me to wait, some of the employees I asked said they lacked cash in the safe so I had to wait. I saw the head of the bank directly calling the district branch for help asking for a stock of money. So I concluded, that banks never see large amounts of physical money, they just log the numbers on the computer.

If criminals know you're Bitcoin enthusiast by wearing a cloth with Bitcoin logo, they can force you to give your private key to them which mean Bitcoin can be robbed too! don't forget about $5 wrench attack.

You can manage your own coin if you hold it on a non custodial wallet, if you hold it on centralized exchange you're not have full control over your coins.

Cryptocurrency payment gateway isn't the best place to hold your coins, having a security feature is useless here if you not have the seed phrase or the private key. Just use a wallet, you're gave a wrong suggestion.

I took a screenshot of this because I think more people here would spend a minute reading it. I know that many are ware of this situation in Germany back then, but when I gave it a read a minute ago I realized I already forgot how intense inflation was back at the time.



Inflation is underestimated and the spiral of it even more so. I think the example of the bread in Germany shows that nothing has to happen over night. It can be lingering but its final effect is even more brutal and essentially can't be stopped by printing more money ever.

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This has already happened multiple times recent. Look at the likes of Celsius, Voyager, and BlockFi. All of these entities were running fractional reserve systems and holding a tiny proportion of the balances they were showing to their customers on their accounts, while the majority of bitcoin that had been deposited was being loaned, gambled, and otherwise risked to make profits for themselves. A small number of people withdrawing their coins was enough to cause liquidity issues followed by a larger bank run and then complete collapse.

This is the risk you take with any and every centralized exchange. They are fractional reserve scams with no one waiting to bail them out.
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Yes but as I pointed out, as bad as it is that people lose money when these fractional Bitcoin reserve companies collapse, the cleaning mechanism has its merits given that there is no such thing as a money printing bailout machine for companies operating with Bitcoin instead of fiat. I know that they could be bought out, but that usually still happens at the cost of the customer/depositor anyway.

This is an example of hyperinflation, this is what unlimited printing of money can lead to, the result of such a strategy will always be the same. I was once told a similar story with a cart, when a man with a cart full of money went to buy bread, but on the way he was distracted and the cart was stolen, but at the same time they poured out all the money, because it already cost nothing, and the cart was much more expensive, so it stole.

This is the nature of fiat money, they print a lot when the government needs to help a weak economy, but the more money they print, the higher inflation becomes, as a result, collapse is inevitable.

Yes definitely Bitcoin will solve the problem because fiat currencies are physical currencies that can be robbed or destroyed similarly with the bank but when we talk about digital currency bitcoin takes place. such kind of currencies can not be robbed or destroyed also you can manage your own coin no one can manage it on your behalf. and the cryptocurrency payment getaways have security feature that can secure your coins and transaction. so i think bitcoin will solve many problem.

I think this is the perfect example for this.


An image from Somaliland, a self-declared republic in East Africa. People are running around the market with a cart full of money to buy everyday goods.
Image collected from: Source

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As long as there's this concept of "centralized" exist, this will continue to happen. We are the one who trust them with our money and then they took advantage of it. We need to stop in order to make them stop. Without any customers, they are useless. This is why every one who is smart enough, keeps their holdings in personal wallet.

Why not?

And what happens when a country prints so much of it that it costs $100 trillion for a loaf of bread? Their banking system absolutely collapses and they end up using a different currency altogether.

This has already happened multiple times recent. Look at the likes of Celsius, Voyager, and BlockFi. All of these entities were running fractional reserve systems and holding a tiny proportion of the balances they were showing to their customers on their accounts, while the majority of bitcoin that had been deposited was being loaned, gambled, and otherwise risked to make profits for themselves. A small number of people withdrawing their coins was enough to cause liquidity issues followed by a larger bank run and then complete collapse.

This is the risk you take with any and every centralized exchange. They are fractional reserve scams with no one waiting to bail them out.

Yes that was what I thought, too. But as a result of centralized custodians playing their number games on the balance sheets, bank runs or other problems that lead to liquidity emergencies could lead to massive system risk for the crypto industry as no new Bitcoin can be printed to bail out big players. It's the opposite for real banks that are too big to fail (or in the case of the UBS now too big to bail...). In the long run, when crises happen, they should usually help flushing the gamblers out of the market I guess? Those who want to be part of the game for a long time are more or less forced to understand that fractional reserve will one day go wrong for them. Though if until then they have earned money for a luxurious life, they probably don't care. But that's where the law hopefully hunts them down, though that is wishful thinking because it doesn't with bankers either.

Self-custody is one of the best ways to protect your cryptocurrency funds.  There are also peer-to-peer (P2P) trading platforms that allow users to trade cryptocurrencies directly with each other, without the need for intermediaries.
As for interest on deposits, many cryptocurrency services offer staking or lending programs that allow users to earn interest on their funds, but personally I wouldn't even put 1 satoshi in it

Bitcoin in self-custody can prevent this, but not when you are dealing with third party platforms, as the same method used by traditional banks can used, as we have seen with the scams involving Celsius and FTX. So solely using bitcoin as currency isn't enough. The P2P feature must be also applied in order to prevent you from having your money scammed.

On the other hand, the fact banks make profit this way and pay interest to their customers isn't a bad thing at all. The problem is when this practice isn't well executed for real. That is, when it's done irresponsibly by the banks and financial institutions, like on the examples mentioned above regard crypto universe.

When well executed, it's a very profitable kind of business for every parts involved.

Many people believe that banks provide the best security for their customers because they are supported by the government. This kind of assumption has penetrated all bank customers around the world, but most customers do not know where their money is being used.

When someone knows how banks work, then I think they are less likely to keep their money in the bank for whatever reason. Of course it's hard to tell the facts to anyone who has been brainwashed by a centralized banking system with the assumption of security in the foreground. Profit sharing or annual interest is not much, it's just their way of attracting customers.

I completely agree with your assumptions because that's the reality. Banks generate profits from their customers' funds, that is a fact that may have been ignored by millions of customers so far. As a result I no longer use the bank to save money, but that has not removed it from my needs because at one point I had to consider the bank a certain amount.

Fiat is worthless. Consider a $100 dollar bill. A cheap piece of cloth-paper, with a few pretty pictures on it, and some pretty printed words. True value? Maybe a couple of cents. The $100 value is a figment of the imaginations of a world of people who value it that way.

What about Bitcoin? Even less real value than the fiat. Nothing to really hold in your hand if the electric grid or the Net happen to go down. Nothing to it at all. Only the imaginations of some of the people to give it value.

The question is, what should people be holding as value or valuable? With the world of finance the way it is these days, we need to be considering true and real value, whatever it is.

To an extent they are correct, it is more secure than keeping your money under your pillow or keeping it somewhere in your home you think is safe, it is even much more secure than buying BTC and storing them in a centralized exchange as a lot of people do. Storing BTC in a self custody wallet and having the knowledge of what you are doing is only what i can consider a safer way to keep your money, but sadly not everyone can do it, especially the aged and those who do not trust BTC.
Banks can collapse, but the entire banking system cannot collapse, money may even be printed out of thin air to rescue failing banks. We have to rely on banks because we cannot do without them for now, do you have a job in real life? I do, and my salary is paid into my bank account, and if you do, i am sure that's where yours is paid into as well. When people and friends want to send you money, you can't give them your BTC address if they aren't BTC enthusiasts, so they have to send it to your bank account.
Look, if a bank run happens, the bank is surely going to collapse because of their fractional reserve system, but if there is massive withdrawal of money from a particular bank, where are people going to put all that money? You and i would say BTC because we believe in it, but there are millions of people who do not, so they would just put the same money into another bank they think is safer.

They trust banks to store their money and not all people store their money in banks to get interests as bank savings. Storing money in banks and opening bank accounts which serve for your bank savings are different.

In both choices, you can receive interest from banks but with official bank saving account, you will get a higher interest rate because there will be terms on how long your contract with bank will be expired, 3 months, 6 months, 1 year, 2 years. This is cause of something bad, banks will use your money when expiration date is still far and they can bet with your money.

When their bet fails, they go bankrupted and you lose your money. Some banks can be supported and rescued by central banks and governments but investors to bank stocks will lose money forever.