US’ First Crypto Bank Reveals Date of Commencement
supercryptonews.com
supercryptonews.com
And if that happens, you probably need a World Cryptocurrency Bank, and an International Cryptocurrency Fund as well.
Wow, things are going to get fun!
Wow this is such an advancement in banking and finance!
While this view of Bitcoin might sound like it is a betrayal of Bitcoin's original vision of fully peer‐to‐peer cash, it is not a new vision. Hal Finney, the recipient of the first Bitcoin transaction from Nakamoto, wrote this on the Bitcoin forum in 2010: Actually there is a very good reason for Bitcoin‐backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases. Bitcoin backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoin backed. Interest rates may vary. Cash from some banks may trade at a discount to that from others. George Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self‐regulating.
What's funny is it started the same way your clever little remark did but it didn't end the same way.
I think the really sad part here is you think that revisiting an old problem will lead us to the exact same old solution despite decades of advancement.
I mean yeah. Traditional banking is very lucrative, especially at lower reserve requirements and capital investment regulations.
I know you're trying to be cute, but the SPDI charter that Kraken Bank has prohibits fractional reserves. Kraken must hold your deposit.
> If Kraken Financial had been in full operation in March 2020, it may not only have ended up insolvent by mid-March but would likely have been subject to a bank run. In practice, it has more in common with a prime money market fund than a bank.
Sounds about right
They don't source this claim at all, they just assert it and expect you to follow along.
It's always easy to craft a just-so-story that sounds reasonable. We could find theories all over the internet about why existing banks today should collapse any minute. What matters is the expertise and credibility of the source.
Assuming you are believe the US dollar is a paper note "backed by nothing." Many people strongly disagree with this statement.
This is a meaningless statement. Please explain explicitly how you think nuclear weapons ensure that the dollar has some trade value.
The US government doesn’t offer nuking privileges at a fixed price, to my knowledge.
The government systems of the US extract 35%-40% of the economy in taxation & spending obligations (inflation). Unbacked? That's ~$7+ trillion of annual tax revenue ($8+ trillion of annual spending) from the world's largest economy.
It's one of the more ridiculous myths endlessly circulated by the delusional goldbug types for pretty much the entire past century. When confronted with the facts of reality about how taxation actually works and the fact that fiat isn't actually unbacked, they always instantly run away from their premise (and I say this as a fan of gold as an inflation hedge).
Fiat is backed by a lot of guns pointed at the taxpayer's collective head, ensuring the ability to collect tax revenue from the nation's productive output; whether a given taxpayer likes it or not, whether they agree or not, whether they resist or not, it simply does not matter, the guns (along with the reach of the regulatory body) ensures compliance. In 99%+ of cases they don't even need the guns, they merely need you to understand they're always there as an option. The only thing a goldbug can do when confronted with this fact of reality, is argue that it's immoral to hold a gun to the taxpayer's head to extract taxation, which is a moot argument ultimately: your neighbors all support that virtual gun being held to your head to collect the taxes.
Those guns have very broad public support generally, meaning most of the population - in most every country on the planet - supports tax collection, by force if necessary. They may disagree on nuance, or about what the ideal rate of taxation is, however the public very strongly supports collecting taxes. There's a reason every functional nation & government uses a fairly typical tax collection system: the public broadly supports the concept and will tolerate it. And if you refuse to pay taxes, the public is generally ok with sending in the guns to make you pay your taxes as needed. The public ultimately knows they benefit in various important ways from tax collection, even if everyone simultaneously grits their teeth about paying taxes.
It's probably more reasonable to argue that the US Dollar is supported even more strongly than if it merely had gold behind it and not the guns of tax extraction. The US Government has the ability to take enormous arbitrary sums from the population (see: Covid spending), via the Fed and its capacity to 'print' as they deem it necessary. The USD has more economy behind it accordingly than it would with just gold behind it; it has probably 50%-60% of all possible economic activity behind it as needed, which is a high-end figure for what the governments of the US can perhaps take out of the economy before prompting an extremely negative social reaction. Gold could never come remotely close to matching up to that kind of financial backing.
Having backing (support) is not the same thing as saying that the dollar would retain more or less value over time if it had a gold requirement behind it however, those are two entirely different matters. The USD simultaneously has massive backing behind it, and it's going to endlessly be devalued by the fiscal mismanagement in DC.
There is actually a coherent way in which the dollar is backed by guns, but it’s the enforcement of the petrodollar system - nothing to do with taxes.
I want crypto to succeed but I'm not seeing the use within the public. Really all I see is the FOMO of getting rich in crypto investments.
It seems it's been made almost deliberately hard to use in the US as a currency because of the tax situation surrounding it (reporting it as capital gains and tracking when you bought/sold). Normal people aren't going to be excited about it when they find they have to pay capital gains tax for that coffee, or equivalent Venmo transfer.
Edit: If I'm wrong about tax situation let me know. But I started to use a crypto transaction tracking service so I can do my taxes easily next year. The tax situation surrounding crypto makes me nervous.
Metamask was just copying some addresses and stuff. I realize that the average person can't even come close to doing it yet, but soon it'll be all QR scanning and stuff and they can prob do it.
If I spoke to 99% of my non tech friends - who (thanks to things like the NHS Covid Check In app) now get QR codes - I don't think any would feel the need to avoid using Stirling and a bank?
(Edit: particularly when contactless/phone/watch payment is so ubiquitous in the UK)
But the narrative is enticing: "Control YOUR money/value!"
Perhaps it's a little like the Linux vs Windows/macOS/iOS/Android thing - "have complete control of your computer! Prevent people from spying on you! Tinker under the hood!" - and yet most of us are content with changing the background picture and happy if we don't get malware.
I wonder if cryptocurrency is doomed to the same fate. If we take away the speculation and get rich quick - for the average person, what's left? If it won't make me rich (and there's a risk it'll make me poor!), why move from what I already have that works (arguably) far better?
This was also the refrain in 2017. Billions were raised to make it happen.
Four years later, what does the cryptocurrency industry have to show? Mass market adoption seems as unlikely as ever.
QR codes don't solve anything when the basic design is so user-hostile — for the end user, crypto is unsafe money that you can lose at any time even if you think you're taking precautions. The only reasonable solutions available are centralized, and at that point you're competing against Apple, Google, Visa, etc.
DeFi DApps have happened in the past four years allowing you to easily invest and spent your cryptos from your browser.
Stable coins and lending protocols have happened enabling you to earn interest on your dollars without exposing yourself to Bitcoin‘s volatility.
Decentralized exchanges happened allowing you to swap between coins without the need for a centralized exchange in that case.
Major wallets integrate many of these features allowing you to manage cryptos from your smartphone.
Progress happened you’re just not looking for it.
I think the average people will use Paypal/Venmo as a novelty and also to get the volatile investment gains. Then the individualists will hold theirs cold storage.
You have to find the directories in your area, but I've been amazed how many capable freedom focused people are now not only accepting crypto payments, but prefer it.
How it is going: "US’ First Crypto Bank Reveals Date of Commencement"
IDK, while I really like the tech of the various DLT implementations, I am not so sure the world needs cryptoCURRENCIES. With Apple/Google pay, we have fully functional digital currencies right now.
They also don’t provide a digital currency - its an abstraction/wrapping for the native countries currency. In my mind sufficiently decentralized (sybil resistant) currencies are the only true digital currencies.
Also as an aside given the top post on Stripe atm, I want to see decentralized identity take off - its a better use case for DLT imo. The networks security would come from the token value of an underlying crypto.
1) Cypherpunks with a strong counter-cultural note till 2013
2) BTC as a currency + payment system ("Cheaper and faster than Western Union!") till 2016 after 1) exhausted the addressable market which is small. Lightning network is the semi-centralized attempt at resuscitating this but I have my doubts.
3) "Digital gold", SoV from 2017 when 2) fell on its face
From 3) on, you can't really call it a currency anymore as it just doesn't work well. And if it is no longer a functioning currency (despite El Salvador calling it one), IDK what the point is, really.
Instead of an address, you basically use a "PO Box number", which is an opaque handle. When you post it, it goes into the Royal Mail/USPS or whoever and they translate the PO Box into an address and deliver it to you.
Someone still has your address but the post office already have it so it's not much worse.
If I use any current digital forms of payment, someone is watching/recording the transactions and pairing them with my ID for some ad campaign.
Oh and: I should be able to stroll up to a traffic light and be able to donate some BTC to a homeless person via Bluetooth without getting out of my car (so I don’t give them COVID)
Tbh I think the environmental impact of a true PoW blockchain used around the world isn't really worth it for the collective human species. But for each individual person who owns a good amount of btc, it's worth it.
They could if they had been saving in bitcoin :)
Of course the whole idea relied on trusting the bank to publicly release all of the addresses it uses. And I forget the exact problem is was supposed to help address, but it was something along the lines of like, no one really knows how exposed banks are, except for themselves and the regulators, and even then, bank regulation and stability was akin to a black box.
Part 15: Free Banking Era[0]
[0]https://en.wikipedia.org/wiki/History_of_central_banking_in_...
As far as I understand it, the only reason that real money has real value is because it is backed by banks and we trust the banks. We trust the banks because they make money by providing us the stability so it is a win-win.
I understand the idea of having decentralised currency to specifically avoid being "controlled" by central banks but the example of BitCoin has not worked and I wonder if this is purely a technical issue specifically with Bitcoin (slow ledger, associated with crime, instability) or whether it is even possible to get the stability and value from any system that is not anchored to anything tangible.
Is the jury still out or do we know it can work?