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The irony of all these banks and governments banning crypto currency purchases is that all they are doing is strengthening the use case for crypto currencies to

by craigc 9y ago

The irony of all these banks and governments banning crypto currency purchases is that all they are doing is strengthening the use case for crypto currencies to begin with. One of the most appealing things about crypto currencies (specifically decentralized ones) is that you are free to hold them and use them however you like. There aren’t restrictions on who you can send them to, what time of the day you can send them, the maximum amount you can send. You don’t have to worry about your bank account being frozen or suspended. You don’t have to wait days for transactions to go through. You don’t need a bank account at all to store them. The more that banks restrict the way people are allowed to use their money, the more it will push people into crypto currencies. State backed crypto currencies are unlikely to succeed in the same way that decentralized ones like Bitcoin are because central control allows the bank or government to print as much as they would like and alter transactions however they see fit. It’s unlikely there will be any sort of public ledger/blockchain or accountability. Eventually people will catch on to this and figure out a way to move back to Bitcoin and others. It may take 10-20 years or longer, but I don’t think this charade is going to last forever. In addition, I am always wary when banks do things like this citing reasons like: “Our goal is to protect our customers. It’s too volatile. It’s used for money laundering.” Banks have never and will never care about their customers. In fact, they benefit from their customers going into debt (credit card fees, loan interest, overdraft fees, etc). How concerned were the banks about issuing loans to customers leading up to the 2008 housing crisis? Money laundering is still primarily done using cash and often with banks turning a blind eye. This is all about banks understanding the threat of crypto currencies and trying to maintain control of the financial system by eliminating any and all competition. They know that widespread crypto adoption will make them obsolete. I think this battle will go on for years, but I think eventually the banks are going to lose. It’s possible that they already know that too.

jopuwep12489 9y ago
>They know that widespread crypto adoption will make them obsolete. Could be true. But are we seeing adoption grow? I see a lot of merchants ending support for bitcoin and other crypto-currencies. I think more people use it as a speculative investment than as a currency right now.
- craigc 9y ago
  Agreed. It’s a long game. The market cap of Bitcoin is still minuscule compared to other markets. If you look historically the volatility has decreased as the price has increased and I expect that will continue. I consider Bitcoin in a price discovery phase right now which could continue for another 5 or 10 years or more (assuming the powers of the world allow it to). The lightning network and other software will solve many of the issues with regards to transaction fees and delays. I think adoption will eventually come back.
asgiobiob 9y ago
>There aren’t restrictions on who you can send them to, what time of the day you can send them, the maximum amount you can send. You don’t have to worry about your bank account being frozen or suspended. You don’t have to wait days for transactions to go through. You don’t need a bank account at all to store them. All of that applies to cash under your mattress. And "You don’t have to wait days for transactions to go through."? Nonsense. Blockchains don't scale.
- craigc 9y ago
  > All of that applies to cash under your mattress If you wanted to pay someone in another country $1,000 would you trust sending that much money in the mail? > Blockchains don’t scale This is very shortsighted. I’m not talking about now. I’m talking in 10 or 20 years. The internet didn’t scale in the early 90s. Software by its nature is designed to evolve. I think there is a high likelihood Blockchain tech will rival traditional payment gateways in the next 10 or 20 years.
OscarTheGrinch 9y ago
This only makes bitcoin stronger!!!
pacetherace 9y ago
You are right in highlighting the issues with current financial systems. But what is the basis for assuming that a decentralized and unregulated system will be way better in addressing all the issues you have highlighted? Even if you keep aside the regulation aspects, there is no assurance that money kept in a cryptocurrency account is safe. The fact that bank accounts are insured is a big deal. Nobody apart from the government is gonna sign up for that. And if someone does, they will not do it without tracking the flow of money.
skybrian 9y ago
For people to be "pushed" into cryptocurrency they need to encounter a situation where they want to do a financial transaction and their usual payment systems don't work. How likely do you think that is?
- craigc 9y ago
  I disagree with that. For people to be pushed into cryptocurrency, it has a lot more to do with debt and inflation and problems with fiat currencies. I didn’t mention that in my original post because I wanted to focus more on the technology aspects, but I believe the monetary aspects will be the real catalyst that ultimately causes adoption. The fact is, if you hold your savings in USD in a bank account with close to zero interest rates, your life savings will be worth less every single year (purchasing power, not dollar amount). With a deflationary currency such as gold or bitcoin, that is not the case. I think as people realize this, it will eventually become a self fulfilling prophecy where people are pushed into cryptocurrencies as a hedge against hyperinflation (it is already happening in certain countries such as Venezuela). It stands to throw off the entire balance of power in the world which is why people in high places are trying to slow it down and prevent it from happening, but I believe it is just putting off the inevitable. That is why I am saying it wont happen today. I said 10 to 20 years as an aggressive estimate, but in reality it could take 50 to 100 years. I also believe the entire surge in Bitcoin and crypto and subsequent crash may have been orchestrated by big players in order to shake the public’s confidence and trust in these markets to push adoption farther down the road.
  - sremani 9y ago
    I can envision a cryptopia when we have city-states with commerce as the engine of interaction and integration. I do not see cryptopia when Nation-States and their huge navies/armies lumbering around the globe.
  - s73v3r_ 9y ago
    Your post forgets to mention the negative aspects of deflationary currencies, though. If your money is going to be worth more tomorrow, and thus goods would be cheaper, you're going to push off purchasing things. People continuing to do this means that the makers of goods aren't selling, and therefore aren't making money. Thus, they have to cut expenses, meaning laying people off. Using the boogeyman of hyperinflation is also rather dishonest, as that takes much, much more to happen than just the 2% inflation target the Fed has.
s73v3r_ 9y ago
They're not banning cryptocurrencies, though. They're just saying that the regulated banks, presumably the ones that are insured with taxpayer dollars, aren't allowed to speculate with them.

by craigc 9y ago

jopuwep12489 9y ago

>They know that widespread crypto adoption will make them obsolete. Could be true. But are we seeing adoption grow? I see a lot of merchants ending support for bitcoin and other crypto-currencies. I think more people use it as a speculative investment than as a currency right now.

craigc 9y ago
Agreed. It’s a long game. The market cap of Bitcoin is still minuscule compared to other markets. If you look historically the volatility has decreased as the price has increased and I expect that will continue. I consider Bitcoin in a price discovery phase right now which could continue for another 5 or 10 years or more (assuming the powers of the world allow it to). The lightning network and other software will solve many of the issues with regards to transaction fees and delays. I think adoption will eventually come back.

asgiobiob 9y ago

>There aren’t restrictions on who you can send them to, what time of the day you can send them, the maximum amount you can send. You don’t have to worry about your bank account being frozen or suspended. You don’t have to wait days for transactions to go through. You don’t need a bank account at all to store them. All of that applies to cash under your mattress. And "You don’t have to wait days for transactions to go through."? Nonsense. Blockchains don't scale.

craigc 9y ago
> All of that applies to cash under your mattress If you wanted to pay someone in another country $1,000 would you trust sending that much money in the mail? > Blockchains don’t scale This is very shortsighted. I’m not talking about now. I’m talking in 10 or 20 years. The internet didn’t scale in the early 90s. Software by its nature is designed to evolve. I think there is a high likelihood Blockchain tech will rival traditional payment gateways in the next 10 or 20 years.

OscarTheGrinch 9y ago

This only makes bitcoin stronger!!!

pacetherace 9y ago

You are right in highlighting the issues with current financial systems. But what is the basis for assuming that a decentralized and unregulated system will be way better in addressing all the issues you have highlighted? Even if you keep aside the regulation aspects, there is no assurance that money kept in a cryptocurrency account is safe. The fact that bank accounts are insured is a big deal. Nobody apart from the government is gonna sign up for that. And if someone does, they will not do it without tracking the flow of money.

skybrian 9y ago

For people to be "pushed" into cryptocurrency they need to encounter a situation where they want to do a financial transaction and their usual payment systems don't work. How likely do you think that is?

craigc 9y ago
I disagree with that. For people to be pushed into cryptocurrency, it has a lot more to do with debt and inflation and problems with fiat currencies. I didn’t mention that in my original post because I wanted to focus more on the technology aspects, but I believe the monetary aspects will be the real catalyst that ultimately causes adoption. The fact is, if you hold your savings in USD in a bank account with close to zero interest rates, your life savings will be worth less every single year (purchasing power, not dollar amount). With a deflationary currency such as gold or bitcoin, that is not the case. I think as people realize this, it will eventually become a self fulfilling prophecy where people are pushed into cryptocurrencies as a hedge against hyperinflation (it is already happening in certain countries such as Venezuela). It stands to throw off the entire balance of power in the world which is why people in high places are trying to slow it down and prevent it from happening, but I believe it is just putting off the inevitable. That is why I am saying it wont happen today. I said 10 to 20 years as an aggressive estimate, but in reality it could take 50 to 100 years. I also believe the entire surge in Bitcoin and crypto and subsequent crash may have been orchestrated by big players in order to shake the public’s confidence and trust in these markets to push adoption farther down the road.
- sremani 9y ago
  I can envision a cryptopia when we have city-states with commerce as the engine of interaction and integration. I do not see cryptopia when Nation-States and their huge navies/armies lumbering around the globe.
- s73v3r_ 9y ago
  Your post forgets to mention the negative aspects of deflationary currencies, though. If your money is going to be worth more tomorrow, and thus goods would be cheaper, you're going to push off purchasing things. People continuing to do this means that the makers of goods aren't selling, and therefore aren't making money. Thus, they have to cut expenses, meaning laying people off. Using the boogeyman of hyperinflation is also rather dishonest, as that takes much, much more to happen than just the 2% inflation target the Fed has.

s73v3r_ 9y ago

They're not banning cryptocurrencies, though. They're just saying that the regulated banks, presumably the ones that are insured with taxpayer dollars, aren't allowed to speculate with them.