How Important are Banks to Bitcoin Today? \ stacker news ~bitcoin

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How Important are Banks to Bitcoin Today?

968 sats \ 30 comments \ @kr 2 Mar 2023 bitcoin

In just the last couple weeks we’ve had some pretty bad news for Bitcoin banking…

Silvergate seems to be on the brink
Operation Chokepoint 2.0 is underway

What I’d love to understand is what impact a crackdown on banks might have on the Bitcoin industry at large (think second-order effects).

Many Bitcoiners believe that the state of the banking industry does not matter so long as they hold their own keys… what is your best argument for why it does?

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1188 sats \ 16 replies \ @siggy47 2 Mar 2023

I don't think there's any doubt that a major crackdown on banks would drastically drop the price of bitcoin in fiat terms. It might be the best thing to happen to bitcoin in the long run. The anti-fragile honey badger will grow stronger as a result. Lazy people (like me) could no longer use kyc and p2p would be the norm. It would be almost impossible for a successful fiat attack on bitcoin at that point.

31 sats \ 15 replies \ @kr OP 2 Mar 2023

agree, thanks for the write up. i like the idea that a bit more short-term pain could pave the path for a bigger long-term gain (in the form of more p2p transactions that cannot be easily stopped).

537 sats \ 2 replies \ @siggy47 2 Mar 2023

I re-read your question and gave it more thought. One thing I failed to mention is that if banks are barred from being involved in bitcoin transactions, the subsequent price drop would also likely temporarily slow down new bitcoiner adoption. As we all know, newbies are often attracted to "number go up" mentality, and the barrier to entry in a p2p world would be much higher.

40 sats \ 0 replies \ @nerd2ninja 2 Mar 2023

We need to stop onboarding newbies with number go up hype. We should be telling people to be careful when people start to lose their minds like that.

Slow and steady is the way. Here's 10k sats, I'll teach you how to use and store it.

0 sats \ 0 replies \ @kr OP 2 Mar 2023

yeah, good point

51 sats \ 11 replies \ @DarthCoin 2 Mar 2023

People should start earning BTC not buying it anymore. For longer we use fiat system, longer we will suffer. Each day you are NOT using fiat is a day less for the banksters. For more you are using BTC as money, stronger became.

1 sat \ 10 replies \ @kr OP 2 Mar 2023

also agree with you here.

however, there are still a few points of connection to the banking system that nudges people to stay in fiat.

for example, how do you buy a car or a house without a bank account today? not many available options for most people

100 sats \ 9 replies \ @DarthCoin 2 Mar 2023

LOL buying a car or house? Are you nuts? BUY all the way Bitcoin not useless crap. I sold my car in 2016 (low BTC price) and bought more BTC. A bike is very useful. And renting is practical. I pay rent in BTC.

56 sats \ 2 replies \ @kr OP 2 Mar 2023

i’m not asking you whether i should buy a car or a house, i’m simply observing that most people do buy cars and houses and they have basically no options to buy those things in Bitcoin today.

100 sats \ 1 reply \ @DarthCoin 2 Mar 2023

Who is looking to buy a house or a car today, still lives in the fiat mentality. And some of them NGMI.

1085 sats \ 0 replies \ @BlokchainB 2 Mar 2023

People with families

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1 sat \ 0 replies \ @siggy47 2 Mar 2023

"You reached for the secret too soon, you tried for the moon. Shine on you crazy diamond." -Roger Waters

0 sats \ 4 replies \ @ek 2 Mar 2023

Isn't owning a house better than paying rent?

0 sats \ 3 replies \ @clr 2 Mar 2023

Great question.

But, with the current state of affairs, do you really own your house or are you just renting from the state?

I hope other people provide replies to your question to see other points of view.

0 sats \ 2 replies \ @siggy47 2 Mar 2023

Your point that everybody is really renting real estate (taxes, eminent domain) is well taken. However, when you're trying to take care of your family, and you live in a society where debt is the name of the game, it makes sense to join the party and hope you have a chair when the music stops playing. This is especially true if you're in a position to take advantage of the debt driven fiat system and not risk your own bitcoin. Purchase (rent?) the house or car with borrowed monopoly money, while preserving your bitcoin for when the house of cards collapses.

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110 sats \ 0 replies \ @nerd2ninja 2 Mar 2023

Nic Carter is

Shunned from society for being a scammer
Has bad incentives that would shape his opinion as to make it look like problems with crypto are Bitcoin problems

Here's the signal.

We need people to stop treating Bitcoin as a speculative asset. It is the cause of these hype bubbles that disrespect the ultimate goal of Bitcoin in the first place. A ban on Bitcoin shows its resilience as everything else fails and falls. The people who keep using it during this time will not be treating it as a speculative asset.

Bitcoin communities are forming. When they do, and people see Bitcoin as money as a regular occurrence, they would see a ban on money as an attack on their rights and so will not comply. It will be as normal and pervasive and ignoring the law in the US on piracy or marijuana.

Crypto will die because they were only ever scams anyway and nobody is going to care about those scams so much as to break the law in this regular and pervasive way.

331 sats \ 2 replies \ @DarthCoin 2 Mar 2023

Only people that still use fiat money consider banks important. For me are just history. I don't use banks anymore.

25 sats \ 1 reply \ @kr OP 2 Mar 2023

I agree with you and am impressed with your lack of bank connections.

15 sats \ 0 replies \ @DarthCoin 2 Mar 2023

I killed the emperor remember? 😂😂😂

https://i.postimg.cc/Njpfw76S/vader-IMF-Palpatine.jpg

16 sats \ 0 replies \ @l0k18 2 Mar 2023

Banks supporting ponzi schemes is not ok by any definition. Are they after bitcoin or sh!tcoin casinos and token rackets?

51 sats \ 0 replies \ @kr OP 2 Mar 2023

one other related thought: which bitcoin businesses (if any) would have to stop operations if they lost their banking partners?

25 sats \ 0 replies \ @cointastical 4 Mar 2023

What I’d love to understand is what impact a crackdown on banks might have on the Bitcoin industry at large (think second-order effects).

I just found yesterday that my bank refused my attempt(s) to deposit at Strike using my bank debit card. There was a message in the app saying I needed to call my bank for verification. I've done these deposit transactions with Strike using the same bank debit card for months and months and never previously had this "Verification" requirement. And my bank debit card works just fine for other charges I've made prior and since.

I have no idea what triggered this or what this verification entails, but I am most certainly not going to call my bank for verification. The other option is to set up deposit on Strike using bank transfer (instead of debit card), but Strike uses Plaid, and I refuse to let that commercial data harvester gain access to the past few years of my bank account transaction history.

But the dumb bastards at my bank haven't really thought this through. So I have my paycheck going direct deposit to my bank, and then from that I send a portion of that fiat to Strike.

But Stike offers incoming direct deposit as a funding option for me as well. So by the next pay period I will have instructed my employer to change the routing # and account number to pay instead the direct deposit info given me by Strike.

I will need to move a potion of my fiat funds that were received at Strike and then transfer them to my bank. But there are various methods to accomplish this, including using bitcoin as the payment rail to get dollars into my bank account.

So now, my hassle won't be in trying to buy bitcoin, but that friction will then occur with me trying to move some funds out of Strike and getting them into my bank.

Will that mean I will be trying to lessen the amount of funds I send to my bank then? Yes, ... yes it does. And not only will my bank see less of my USDs, ... I now have an incentive to seek out and patronize merchants that accept bitcoin.

And that then puts the merchant in the same situation as me. The merchant receives bitcoin, so instead of selling the bitcoin they could instead spend that bitcoin, ... that cuts the banks out even further.

And I will dance on the banksters' graves.

0 sats \ 0 replies \ @TNStacker 2 Mar 2023

Banks? We don't need no stupid banks!

0 sats \ 3 replies \ @faithandcredit 2 Mar 2023

Banks are important? Self custody is not for everyone and it also lacks flexibility.

I dont even know what Silvergate is, they seemed to be gone as quick as they came. They were doing something wrong. This does not mean all banks are bad, Thats all.

2 sats \ 2 replies \ @nerd2ninja 2 Mar 2023

Oh great. Another one that probably supports Keynesian theory.

I am more worried about rehypothecation risk, than I am about someone directly stealing from me.

Its like the difference between getting an alert from an anti-virus, and having a backdoor in your system for years. Detection is important.

0 sats \ 1 reply \ @faithandcredit 3 Mar 2023

i am not worried about $100 in the wallet being stolen. it would suck but i would recover.

my savings for retirement if they get stolen that would be problematic. and if people found out you kept your retirement savings under the mattress you are going to have to worry about that. so self custody is not that great. how many crypto billionaires i wonder self custody? and also luke-jr which is a bitcoin dev lost his money and hes supposed to be an expert? self custody is not that great

0 sats \ 0 replies \ @nerd2ninja 3 Mar 2023

We have cold storage, we have hot wallets, and we have Luke warm stoarge, for when you thought your internet connected device was cold. Anyway, this is the guide for Bitcoin billionaires

https://glacierprotocol.org/

Trusting a custodian has RISK. Major risk. rehypothecation risk, is great depression risk. ALL the money EVERYONE thought they had is GONE risk. Even Luke's loss is better than that. At least with Luke, we know the money is gone and that he can't spend those coins, but imagine if he spent those coins and THEN you found out there was nothing there. That's custodial risk.

Now, even for $100 the risk of rehypothecation is GREATER than theft out of a hot wallet. Take "Wallet of Satoshi" https://1ml.com/node/035e4ff418fc8b5554c5d9eea66396c227bd429a3251c8cbc711002ba215bfc226

191 Bitcoin and yet most people are probably only keeping $100 on there. The $100 increments add up, and being a custodial service might interface with other custodial services and this is where the real risk comes into play. When custodial services, put assets on balance sheets and don't settle the underlying asset, they can effectively print money for a very long time.

It is better that this theft is detected, than to go undetected in a dishonest custodial service's balance books (not to say that I know if WoS is dishonest or not).

0 sats \ 0 replies \ @01xCc 2 Mar 2023

банки не нужны для хранения с 2009 года... проверенно до 2023 года 100%