Comment by hypomanic | Hacker News Reader

Comment by hypomanic | Hacker News Reader

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It's always wild to me people think the current system is good. When you deposit money is a bank, you no longer own the money directly. You own an IOU from the bank (i.e., you're extending the bank a loan) and then they are free to loan out your money in the form of mortgages, car loans, whatever.

The key point is that under the current system, it's impossible to just own digital money directly! You can only be a creditor to a mortgage-lending company! This is completely crazy. What if I don't want my digital money to be loaned out to mortgages of various risk levels? FDIC insurance (in the US at least) is an attempt to fix this janky system with even more confusing jankiness (better not exceed 250k of digital money in the same account, e.g.). If I could just own digital money directly, FDIC insurance wouldn't make any sense. What am I being insured against??

Blockchains finally make it so everyone can just own their digital money directly, without being forced to instead be creditors to mortgage-lending companies.

> If I could just own digital money directly, FDIC insurance wouldn't make any sense. What am I being insured against??

Somebody transferring your coins without your authorization/desire?

The existing system also has reversible transactions which is actually very desirable if you've ever bought anything online.

You can always keep your FIAT in a safe box at home? Or rent a box in, you know, a Bank?

Why do you want an organization to keep your money if that’s an issue for you?

Banks cost a lot to run. They make money loaning money. If you can afford it, open a Swiss or Lux account in a private Bank (private as in high end clients). Expect to pay through the nose in fees unless you give them 3-4M euros. They won’t loan your money out.

I don't want to manage physical money, and would prefer to not pay any fees.

Crypto is perfect for this in a of ways, but has the downside of price volatility.

Stablecoins like USDC have some of these advantages, but huge downside in having to trust an org to back the coin and manage that. A CBDC would be like a stablecoin without any of that risk.

Oh, and I get a small amount of interest too. And money back on bills. Still not sure having my money sitting on a blockchain is better.

Loaning your money out to someone who's going to loan it out to homebuyers is still an option, just not the only option.

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