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Comment by hannasanarion | Hacker News Reader

Dude... the stock market is not the same thing as the banking system.

How your investment porfolio reacts to a change in monetary policy has nothing whatsoever to do with the utility of your checking account.

Trust in centralized financial institutions is not a problem. In fact it's is the opposite of a problem, it's an enormous benefit. Centralized financial institutions with government backing ensure the availability and safety of deposited funds.

Nobody has ever had their bank account drained in the US since the introduction of FDIC in 1933. In the last 10 years alone, over a billion dollars in bitcoin has been stolen out of people's wallets by hacked exchanges and smart contract exploits, money that can never be returned because blockchain is irreversible by design. Does that really sound trustworthy to you?

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> Nobody has ever had their bank account drained in the US since the introduction of FDIC in 1933.

Plenty of people have had their bank accounts drained when they fell victim to "identification theft." That is quite a crafty euphemism -- banks fail to create secure systems, attackers steal funds from victims' bank accounts, and instead of owning up to their failure, banks blame the victims of the thefts by saying the victims' "identities" were "stolen."

I'll give the banks some credit, however: they'll prop up a seemingly empathetic customer service representative who will repeatedly say how "sorry" they are on behalf of their employer. If the victim is persistent enough, the customer service rep will eventually promise to initiate a lengthy investigation, after which the bank will perhaps reinstate the funds that were stolen from their system. Do they fix their broken, insecure system? Of course not. But at least the victim isn't clogging the customer service lines any more.

Identity theft is reversible. It has happened to me, somebody got a hold of my checking account details and drained the account of about $10,000. I called the bank, they reversed the transaction and gave me all my funds back right away, and it was over, just like that, no questions asked.

What happens if your bitcoin details get stolen, hm? What happens when somebody drains your bitcoin wallet? Who can you complain to to get your cryptographically secure irrevocably transferred money back?

That's simply the risk a person takes by having a bitcoin wallet. Seems (at least right now) there are plenty of people who want the benefit of a permissionless value transfer system and are willing to shoulder that risk. Hopefully they secure their magical numbers / private keys better than the banks do, because yes, obviously, there is no Central Bitcoin Governor acting as the Reinstater of Last Resort.

Some people are fine with that risk. Others are not. It's totally cool. More than one value transfer system can coexist in the world.

What do you mean "better than the banks do"? For one, banks don't have single-point-of-failure account access like blockchain does, and for another, the risks of banks are much lower because credit card and ACH transactions are easily reversible.

These are all reasons that banks are more trustworthy and more secure than blockchain, which sees tens of millions of dollars of irreversible theft annually.

You're right in that the stock market and the banking system are not the same thing, but I'd argue that they're intrinsically linked.

I move USD from my checking account into my investment accounts in order to buy equities, and I do that more when the Federal Reserve is pumping more liquidity into the market via low interest rates. There are many folks out there using e.g. TSLA as an inflation hedge (which is why it has a P/E > 1000) because they know that USDs will decline in value as liquidity keeps getting pumped.

If we're all using a decentralized currency like Bitcoin with a fixed inflation rate, you're going to see a lot more sanity and price stability in the equities markets.

Was the economy more stable with no monetary policies? Was the gold standard a failure but now we fixed the underlying issues?

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