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“You couldn’t pay me to keep it with a bank.” Because if there's one thing banks are known for, it's running off with client assets suddenly and without warnin

“You couldn’t pay me to keep it with a bank.” Because if there's one thing banks are known for, it's running off with client assets suddenly and without warning. Oh wait, that's cryptocurrency startups...

zerostar07 8y ago
Forgot Cyprus? it was only 5 years ago.
- mantas 8y ago
  EU has mandatory insurance for €100k in savings accounts. Of course, there're all kinds of scams running all the time disguised as "investment saving accounts"...
martindale 8y ago
If you don't hold the keys, you don't own the money!
blackbrokkoli 8y ago
Well the entire point of crypto is not relying on centralised institutions. Also, Bitcoin is not a startup.
- will_brown 8y ago
  At what point are the miners/network considered the centralized institution? Are corporations considered “decentralized institutions” in the world of bitcoin enthusiasts? After all corporations are made up of decentralized shareholders that can vote for and change the directors. If that doesn’t fit...what about a credit union? Like bitcoin there are no “owners/shareholders” of credit unions they are simply comprised of members.
  - Cthulhu_ 8y ago
    > At what point are the miners/network considered the centralized institution? Very much this; I'm fairly sure that if there is an organization that wants to direct / control btc, all they have to do is open up their (real money) wallet and get the majority mining capacity. If they first drop the value of BTC by selling or whatnot, miners / automatic miners will switch to more profitable currencies so the total hashes / second will lower, making a hostile takeover easier.
    - jsutton 8y ago
      You make it sound so easy, just open up your wallet and get the majority mining capacity! Tell me, how would someone with near-unlimited money go about doing that? Will they just conjure up the hardware needed to make 15 Trillion hashes per second?
    - blackbrokkoli 8y ago
      In theory yes, but as the other answer states, you would raise an immense amount of money WITHOUT the public realising who would than just abandon whatever mining-based Crypto we're talking about
  - blackbrokkoli 8y ago
    Not sure if representative for "bitcoin enthusiasts", but here is how I see it: As the written word spread in Europe after BC, it layed an important cornerstone for democracy and changed the world for good. Noone would argue with that, right? Ok, so let's look at Europe from 500BC-1300BC. Corrupt monks forging official documents, under some goverments up only about 60-80% of the were real. Monks were people of god, so noone really investigated. For a long time, the emperor would sign with a simple line, because he couldn't actually write. Wow, how is that more valuable than spoken word?! Where is your democracy? Women can't read, poor can't read. Knowledge is stored exclusively by the church. Turns out writing things down is actually a really backward philosophy! Or is it? And that's where we're with Crypto right now, IMO. I'm not saying this is as revolutionary as writing, not even close. I'm not even saying it will turn into a good thing. BUT I really like the underlying idea, the concept, of it. Of course there are greedy shitheads, companys taking advantage, fraud and projects which are uterly useless. But yet I didn't came across an argument which convinced that the concept of non-centralizing via blockchain can't work. So, to actually answer your question, I think we shouldn't mix up the discussion about the philosophy, potential and future of Blockchain with individual cases like "is this pump and dump worse than 2008 greed of banks" (which is also an important discussion, but a seperate one). Does that make any sense?
    - TeMPOraL 8y ago
      Personally, I'd be fine with all that if not for the elephant in the room - the superlinearly growing, unbounded energy upkeep required to support cryptocurrencies. That one single reason alone outweights all the potential benefits you allude to.
      - blackbrokkoli 8y ago
        This is only true for mining-heave cryptos and is already massively improved in newer projects, but yes, atm it's bad
        TeMPOraL 8y ago
        Given that PoS is still not adopted in a meaningful way, I feel those differences are merely constant factors, they don't change the trend. But I might be wrong about that, I'm not up to date with bleeding-edge cryptocurrency developments.
dec0dedab0de 8y ago
Lehman Brothers
- notyourday 8y ago
  Did not run out with client's money.
epanchin 8y ago
Two things they are known for; Not allowing very large balances to be withdrawn at once. Complying with asset freeze orders.
- Cthulhu_ 8y ago
  And you think this bank (re: the article) falls outside of those? You won't be able to get your btc out quickly in this one either. Same with online exchanges for that matter. They also have much lower transaction fees.
  - coryfklein 8y ago
    Exchanging directly for cash at or above market rates is definitely practical with LocalBitcoins. There are a large number of brokers there that do it professionally and value their reputation on the platform much higher than they value the potential for ripping you off. Of course, if you need to liquidate $1B in Bitcoin, that's going to take time, but you can still do it much faster than you could get it out of a Cypress bank in 2014.
    - st1ck 8y ago
      AFAIK those who had more than €100k in deposits just plainly lost a portion of their money: https://www.reuters.com/article/cyprus-bankofcyprus/cyprus-central-bank-announces-47-5-percent-haircut-on-large-bank-of-cyprus-deposits-idUSL6N0G033120130730 https://www.reuters.com/article/cyprus-bankofcyprus/cyprus-c...
- UncleMeat 8y ago
  What is this threat model where if a government tries to freeze your assets having BTC stops everything bad? If a government is trying to freeze your assets you have a lot of other problems that are bigger than simply not having access to your bank account.
- gamblor956 8y ago
  Not allowing very large balances to be withdrawn at once. Wait, are we talking about MtGoX? Or Coinbase? Or Bitfinex? Or any of the many smaller exchanges that did the same thing right before they collapsed?
imgabe 8y ago
I guess you weren't around in 2008. Oh remember those securitized mortgages we sold you? Yeah, they're worthless now. By the way we bought insurance on them becoming worthless, because we were pretty sure this would happen when we sold them to you.
- Clubber 8y ago
  There's a difference between keeping cash in a bank which is FDIC insured and putting money in investments; particularly in the US where robbery was/is called investment strategy.
  - dumbfounder 8y ago
    Coinbase is FDIC insured.
    - will_brown 8y ago
      But do you know what that covers? Coinbase supports wallets for USD...is it only USD wallets that are FDIC insured?
    - snikeris 8y ago
      * Your USD wallet at Coinbase is FDIC insured.
      - dumbfounder 8y ago
        Yikes, that is indeed a very important distinction that I missed. https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured- https://support.coinbase.com/customer/portal/articles/166237...
    - wyldfire 8y ago
      Yes but it's important to note that the FDIC insurance is only for your USD-denominated balance. Your BTC (or all crypto?) balance is insured by Lloyd's. I assume this is only insured against thefts/failures of Coinbase's, so if your balance were stolen by attackers who had your Coinbase credentials I suspect your balance would not be covered. But this might be similar to your liability from normal online banking fraud/theft? The fact that Coinbase pays those private insurance premiums makes them the no-brainer suggestion to people who are considering holding some BTC.
jabgrabdthrow 8y ago
Sarcastic historical case study of opposite Long argument about instrinsic value Peaceful resolution where we agree not to kill each other if our portfolios fuck us over
anjc 8y ago
> Because if there's one thing banks are known for, it's running off with client assets suddenly and without warning. Capital controls are real

zerostar07 8y ago

Forgot Cyprus? it was only 5 years ago.

mantas 8y ago
EU has mandatory insurance for €100k in savings accounts. Of course, there're all kinds of scams running all the time disguised as "investment saving accounts"...

martindale 8y ago

If you don't hold the keys, you don't own the money!

blackbrokkoli 8y ago

Well the entire point of crypto is not relying on centralised institutions. Also, Bitcoin is not a startup.

will_brown 8y ago
At what point are the miners/network considered the centralized institution? Are corporations considered “decentralized institutions” in the world of bitcoin enthusiasts? After all corporations are made up of decentralized shareholders that can vote for and change the directors. If that doesn’t fit...what about a credit union? Like bitcoin there are no “owners/shareholders” of credit unions they are simply comprised of members.
- Cthulhu_ 8y ago
  > At what point are the miners/network considered the centralized institution? Very much this; I'm fairly sure that if there is an organization that wants to direct / control btc, all they have to do is open up their (real money) wallet and get the majority mining capacity. If they first drop the value of BTC by selling or whatnot, miners / automatic miners will switch to more profitable currencies so the total hashes / second will lower, making a hostile takeover easier.
  - jsutton 8y ago
    You make it sound so easy, just open up your wallet and get the majority mining capacity! Tell me, how would someone with near-unlimited money go about doing that? Will they just conjure up the hardware needed to make 15 Trillion hashes per second?
  - blackbrokkoli 8y ago
    In theory yes, but as the other answer states, you would raise an immense amount of money WITHOUT the public realising who would than just abandon whatever mining-based Crypto we're talking about
- blackbrokkoli 8y ago
  Not sure if representative for "bitcoin enthusiasts", but here is how I see it: As the written word spread in Europe after BC, it layed an important cornerstone for democracy and changed the world for good. Noone would argue with that, right? Ok, so let's look at Europe from 500BC-1300BC. Corrupt monks forging official documents, under some goverments up only about 60-80% of the were real. Monks were people of god, so noone really investigated. For a long time, the emperor would sign with a simple line, because he couldn't actually write. Wow, how is that more valuable than spoken word?! Where is your democracy? Women can't read, poor can't read. Knowledge is stored exclusively by the church. Turns out writing things down is actually a really backward philosophy! Or is it? And that's where we're with Crypto right now, IMO. I'm not saying this is as revolutionary as writing, not even close. I'm not even saying it will turn into a good thing. BUT I really like the underlying idea, the concept, of it. Of course there are greedy shitheads, companys taking advantage, fraud and projects which are uterly useless. But yet I didn't came across an argument which convinced that the concept of non-centralizing via blockchain can't work. So, to actually answer your question, I think we shouldn't mix up the discussion about the philosophy, potential and future of Blockchain with individual cases like "is this pump and dump worse than 2008 greed of banks" (which is also an important discussion, but a seperate one). Does that make any sense?
  - TeMPOraL 8y ago
    Personally, I'd be fine with all that if not for the elephant in the room - the superlinearly growing, unbounded energy upkeep required to support cryptocurrencies. That one single reason alone outweights all the potential benefits you allude to.
    - blackbrokkoli 8y ago
      This is only true for mining-heave cryptos and is already massively improved in newer projects, but yes, atm it's bad
      - TeMPOraL 8y ago
        Given that PoS is still not adopted in a meaningful way, I feel those differences are merely constant factors, they don't change the trend. But I might be wrong about that, I'm not up to date with bleeding-edge cryptocurrency developments.

dec0dedab0de 8y ago

Lehman Brothers

notyourday 8y ago
Did not run out with client's money.

epanchin 8y ago

Two things they are known for; Not allowing very large balances to be withdrawn at once. Complying with asset freeze orders.

Cthulhu_ 8y ago
And you think this bank (re: the article) falls outside of those? You won't be able to get your btc out quickly in this one either. Same with online exchanges for that matter. They also have much lower transaction fees.
- coryfklein 8y ago
  Exchanging directly for cash at or above market rates is definitely practical with LocalBitcoins. There are a large number of brokers there that do it professionally and value their reputation on the platform much higher than they value the potential for ripping you off. Of course, if you need to liquidate $1B in Bitcoin, that's going to take time, but you can still do it much faster than you could get it out of a Cypress bank in 2014.
  - st1ck 8y ago
    AFAIK those who had more than €100k in deposits just plainly lost a portion of their money: https://www.reuters.com/article/cyprus-bankofcyprus/cyprus-central-bank-announces-47-5-percent-haircut-on-large-bank-of-cyprus-deposits-idUSL6N0G033120130730 https://www.reuters.com/article/cyprus-bankofcyprus/cyprus-c...
UncleMeat 8y ago
What is this threat model where if a government tries to freeze your assets having BTC stops everything bad? If a government is trying to freeze your assets you have a lot of other problems that are bigger than simply not having access to your bank account.
gamblor956 8y ago
Not allowing very large balances to be withdrawn at once. Wait, are we talking about MtGoX? Or Coinbase? Or Bitfinex? Or any of the many smaller exchanges that did the same thing right before they collapsed?

imgabe 8y ago

I guess you weren't around in 2008. Oh remember those securitized mortgages we sold you? Yeah, they're worthless now. By the way we bought insurance on them becoming worthless, because we were pretty sure this would happen when we sold them to you.

Clubber 8y ago
There's a difference between keeping cash in a bank which is FDIC insured and putting money in investments; particularly in the US where robbery was/is called investment strategy.
- dumbfounder 8y ago
  Coinbase is FDIC insured.
  - will_brown 8y ago
    But do you know what that covers? Coinbase supports wallets for USD...is it only USD wallets that are FDIC insured?
  - snikeris 8y ago
    * Your USD wallet at Coinbase is FDIC insured.
    - dumbfounder 8y ago
      Yikes, that is indeed a very important distinction that I missed. https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured- https://support.coinbase.com/customer/portal/articles/166237...
  - wyldfire 8y ago
    Yes but it's important to note that the FDIC insurance is only for your USD-denominated balance. Your BTC (or all crypto?) balance is insured by Lloyd's. I assume this is only insured against thefts/failures of Coinbase's, so if your balance were stolen by attackers who had your Coinbase credentials I suspect your balance would not be covered. But this might be similar to your liability from normal online banking fraud/theft? The fact that Coinbase pays those private insurance premiums makes them the no-brainer suggestion to people who are considering holding some BTC.

jabgrabdthrow 8y ago

Sarcastic historical case study of opposite Long argument about instrinsic value Peaceful resolution where we agree not to kill each other if our portfolios fuck us over

anjc 8y ago

> Because if there's one thing banks are known for, it's running off with client assets suddenly and without warning. Capital controls are real