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I closed my bank accounts in 2011. Cash is my currency of choice for most things. I use bitcoin for long term savings. Cold storage is safer than a bunch of cas

by chabes 7y ago

I closed my bank accounts in 2011. Cash is my currency of choice for most things. I use bitcoin for long term savings. Cold storage is safer than a bunch of cash under the mattress.

rolltiide 7y ago
There is a strong use case for that, for my personal spending and utilities it would be very inconvenient for me to convert cryptocurrency to cash without an intermediary bank account. but business-wise many of my vendors have been able and willing to take cryptocurrency especially in the last 3 years. I've executed many legal agreements paid in crypto. Its made it extremely practical for Americans to have offshore corporations again since the bank account part became difficult but is no longer needed for international commerce and asset holdings.
- fennecfoxen 7y ago
  Yeah, those routine inflationary / deflationary episodes that can see the Bitcoin-denominated price of your services (just to use an example) rise and fall by 400% in a year, easily? Very practical! These intermediate bank accounts will soon be a thing of the past.
  - rolltiide 7y ago
    > the Bitcoin-denominated price of your services (just to use an example) rise and fall by 400% in a year Yeah its a bad example because thats not whats happening at all. Criticisms are possible but yours are so far off that I guess these are called weak strawman arguments? I don't think this was intentional as its seems more like a precompiled argument that isn't really a response to this situation so I will tell you my experience with international vendors: When legal contracts are executed a payment method and pricing index is determined. The payment itself does not take a year and there is usually no catalog of goods and services that are "bitcoin-denominated", for our agreements. When the actual payment occurs we use the agreed upon index to use the dollar price, paid in crypto and this takes a few seconds to execute and even in the volatile crypto markets usually nothing is happening in this time frame. The cryptos typically involve: Bitcoin most frequently using Tradeblock's XBX index, or CME's index, or Coinmarketcap Ethereum most frequently using Coinmarketcap, and lately Tradeblock's ETX index random token that one of us has large consolidated ownership of stablecoin like DAI, USDC, Tether This is conceptually no different than any legal contract that use shares for payment. You get a glimpse of this common transaction method when companies are acquired for "cash and stock". For the recipient, it is all about the tolerance of liquidity. There is a curve of liquidity for different asset classes, with US treasuries and non interest bearing dollars being the most liquid on the planet, and a different velocity of liquidity needs for recipients. In a different use case that uses stablecoins there are no price fluctuations and no index price negotiations involved. Its been more convenient for some of our non-US businesses because it is difficult for banks to open bank accounts when the beneficial signers are Americans. This is due to FATCA and the high compliance burden for non-US banks, as well as FBAR filings for the US person. But the whole concept of bank accounts have been leapfrogged and international commerce continues unabated.
    - fennecfoxen 7y ago
      > When the actual payment occurs we use the agreed upon index to use the dollar price, paid in crypto and this takes a few seconds to execute and even in the volatile crypto markets usually nothing is happening in this time frame. Ah, so unlike the person using it for savings that you're replying to, you're basically just paying someone for the overhead of getting that money to a real bank account, through a novelty payment mechanism, to avoid regulators. I mean, that's a step up, at least. Good luck with FATCA Mk II, Cryptocurrency Edition.
      - rolltiide 7y ago
        its not really avoiding its just more convenient as the private sector itself has made it more difficult since they don't want the compliance burden of opening accounts for American signers we'll comply with any applicable regulation. if we have to start filing FBAR's for on-chain or off-chain custodial cryptocurrency holdings we'll do it, while also seeing if there is an applicable exemption, while also having our lawyers write to the Treasury during the comment period to suggest they not pursue this route
banachtarski 7y ago
Who needs things like FDIC insurance anyways /s
- pbourke 7y ago
  You’re assuming that they live in the US.
- ben509 7y ago
  Funny thing is, FDIC is insuring you against the bank collapsing, not your bank accounts from theft. I don't think you can even do that, since protecting your deposits against theft is supposed to be the service your bank provides. You can insure cash with most homeowner's policies, though.
  - klodolph 7y ago
    This is called “bank fraud”. In general, no need for you to insure against this because the bank has to eat the loss.
- mindslight 7y ago
  Makes sense when you're eliminated the risk that FDIC insurance covers...
- war1025 7y ago
  FDIC insurance only counts towards bank accounts. You aren't going to get any reasonable interest rate in an FDIC insured account. Keeping your money in bitcoin may be a poor idea, but any reasonable long-term investment strategy isn't going to be FDIC insured, so that isn't really part of the calculation.
- chabes 7y ago
  Not someone who doesn’t have to ask permission to spend their own money. FDIC is meant to protect deposits in banks. If I don’t need to trust a bank, why would I need FDIC?
esoterica 7y ago
How do you like not knowing whether your entire life savings are going to go down in value by 99% at any point in time?
- chabes 7y ago
  You assume my life savings is substantial enough for me to care
  - nambit 7y ago
    How are they not substantial enough if you started with Bitcoin in 2011??
    - chabes 7y ago
      I didn’t start with bitcoin in 2011. I closed my bank accounts in 2011. I started with bitcoin in 2015. The main reason my life savings is almost nothing is because it came from almost nothing. $50 here and there isn’t much, but it’s more than zero
dgellow 7y ago
Do you get your salary in cash or cryptocurrency?
- mandelbrotwurst 7y ago
  If the funds from said 2011 account closures went to BTC purchases, this person may very well not need a salary!
  - chabes 7y ago
    I wish I had known about bitcoin back then. It would have made things a lot easier. I didn’t learn about bitcoin until 2015, and even then, I had very little disposable income to experiment with. Still don’t have much income. Definitely no salary.
- chabes 7y ago
  Salary? Edit: silliness aside... When I get paychecks, I have to either get them cashed at the bank that issued the check, at a grocery store, or through a friend or relative who has a bank account. I request cash for payment, when possible.
ben509 7y ago
> I use bitcoin for long term savings. At least your savings aren't losing to inflation, but this strategy has zero real growth and carries a tremendous amount of unsystematic risk[1]. [1]: https://www.investopedia.com/terms/u/unsystematicrisk.asp https://www.investopedia.com/terms/u/unsystematicrisk.asp
- chabes 7y ago
  What do you mean by “real growth”? No interest earned? What I want is the ability to safely store value. Saving money in a bank account wasn’t working for me, because monthly fees took literally my last pennies, which led to overdraft charges. Saving money with bitcoin hasn’t just maintained and stored value for me, it has also grown tremendously in value. In my case, it’s risky to participate in the traditional financial system anyway, so I don’t feel like experimenting with an alternative system is any more or less risky.
  - ben509 7y ago
    (Disclaimer: you should talk to a CFP for personalized advice.) > What do you mean by “real growth”? Stocks have real growth. It is "real" because your stock is a share of a company whose employees are trying new ideas, teaching each other, making customers happy, etc. > ... it has also grown tremendously in value. Bitcoin had a lot of initial growth[1] indicating it was undervalued, and there was a ton of speculation. If you got in early and weathered the storm, congrats, but the market should have bitcoin correctly priced by now. In general, a currency doesn't grow in value any more than a lump of gold can grow in value. That it looks like it does is nominal growth, it means your benchmark, e.g. USD, is losing value. Your bitcoins will get you more USD in 10 years, but the prices of goods and services in USD will increase as well, so it's a wash in terms of spending power. [1]: https://en.bitcoinwiki.org/wiki/Bitcoin_history https://en.bitcoinwiki.org/wiki/Bitcoin_history
scottLobster 7y ago
https://www.buybitcoinworldwide.com/price/ https://www.buybitcoinworldwide.com/price/ So you're losing money on inflation, and your long term savings are in one of the most volatile assets on the market that derives its value largely from illegal and gray-market transactions. I wish you luck. But frankly you'd likely be better off putting your long term savings in Boeing stock, and that's saying something.
- AlchemistCamp 7y ago
  > your long term savings are in one of the most volatile assets on the market Due to dollar cost averaging, this is actually a very good thing! The other major question is what BTC's value is going to be in the long term, when they retire and transition from a net saver to a net spender.
  - chabes 7y ago
    I’ve been spending bitcoin as long as I’ve been accumulating it. Can’t say the same about most other hodlers, however
- qes 7y ago
  > you'd likely be better off putting your long term savings in Boeing stock lol if poster above started storing money in Bitcoin in 2011 there's a good chance they are the wealthiest person in this thread.

by chabes 7y ago

I closed my bank accounts in 2011. Cash is my currency of choice for most things. I use bitcoin for long term savings. Cold storage is safer than a bunch of cash under the mattress.

rolltiide 7y ago

There is a strong use case for that, for my personal spending and utilities it would be very inconvenient for me to convert cryptocurrency to cash without an intermediary bank account. but business-wise many of my vendors have been able and willing to take cryptocurrency especially in the last 3 years. I've executed many legal agreements paid in crypto. Its made it extremely practical for Americans to have offshore corporations again since the bank account part became difficult but is no longer needed for international commerce and asset holdings.

fennecfoxen 7y ago
Yeah, those routine inflationary / deflationary episodes that can see the Bitcoin-denominated price of your services (just to use an example) rise and fall by 400% in a year, easily? Very practical! These intermediate bank accounts will soon be a thing of the past.
- rolltiide 7y ago
  > the Bitcoin-denominated price of your services (just to use an example) rise and fall by 400% in a year Yeah its a bad example because thats not whats happening at all. Criticisms are possible but yours are so far off that I guess these are called weak strawman arguments? I don't think this was intentional as its seems more like a precompiled argument that isn't really a response to this situation so I will tell you my experience with international vendors: When legal contracts are executed a payment method and pricing index is determined. The payment itself does not take a year and there is usually no catalog of goods and services that are "bitcoin-denominated", for our agreements. When the actual payment occurs we use the agreed upon index to use the dollar price, paid in crypto and this takes a few seconds to execute and even in the volatile crypto markets usually nothing is happening in this time frame. The cryptos typically involve: Bitcoin most frequently using Tradeblock's XBX index, or CME's index, or Coinmarketcap Ethereum most frequently using Coinmarketcap, and lately Tradeblock's ETX index random token that one of us has large consolidated ownership of stablecoin like DAI, USDC, Tether This is conceptually no different than any legal contract that use shares for payment. You get a glimpse of this common transaction method when companies are acquired for "cash and stock". For the recipient, it is all about the tolerance of liquidity. There is a curve of liquidity for different asset classes, with US treasuries and non interest bearing dollars being the most liquid on the planet, and a different velocity of liquidity needs for recipients. In a different use case that uses stablecoins there are no price fluctuations and no index price negotiations involved. Its been more convenient for some of our non-US businesses because it is difficult for banks to open bank accounts when the beneficial signers are Americans. This is due to FATCA and the high compliance burden for non-US banks, as well as FBAR filings for the US person. But the whole concept of bank accounts have been leapfrogged and international commerce continues unabated.
  - fennecfoxen 7y ago
    > When the actual payment occurs we use the agreed upon index to use the dollar price, paid in crypto and this takes a few seconds to execute and even in the volatile crypto markets usually nothing is happening in this time frame. Ah, so unlike the person using it for savings that you're replying to, you're basically just paying someone for the overhead of getting that money to a real bank account, through a novelty payment mechanism, to avoid regulators. I mean, that's a step up, at least. Good luck with FATCA Mk II, Cryptocurrency Edition.
    - rolltiide 7y ago
      its not really avoiding its just more convenient as the private sector itself has made it more difficult since they don't want the compliance burden of opening accounts for American signers we'll comply with any applicable regulation. if we have to start filing FBAR's for on-chain or off-chain custodial cryptocurrency holdings we'll do it, while also seeing if there is an applicable exemption, while also having our lawyers write to the Treasury during the comment period to suggest they not pursue this route

banachtarski 7y ago

Who needs things like FDIC insurance anyways /s

pbourke 7y ago
You’re assuming that they live in the US.
ben509 7y ago
Funny thing is, FDIC is insuring you against the bank collapsing, not your bank accounts from theft. I don't think you can even do that, since protecting your deposits against theft is supposed to be the service your bank provides. You can insure cash with most homeowner's policies, though.
- klodolph 7y ago
  This is called “bank fraud”. In general, no need for you to insure against this because the bank has to eat the loss.
mindslight 7y ago
Makes sense when you're eliminated the risk that FDIC insurance covers...
war1025 7y ago
FDIC insurance only counts towards bank accounts. You aren't going to get any reasonable interest rate in an FDIC insured account. Keeping your money in bitcoin may be a poor idea, but any reasonable long-term investment strategy isn't going to be FDIC insured, so that isn't really part of the calculation.
chabes 7y ago
Not someone who doesn’t have to ask permission to spend their own money. FDIC is meant to protect deposits in banks. If I don’t need to trust a bank, why would I need FDIC?

esoterica 7y ago

How do you like not knowing whether your entire life savings are going to go down in value by 99% at any point in time?

chabes 7y ago
You assume my life savings is substantial enough for me to care
- nambit 7y ago
  How are they not substantial enough if you started with Bitcoin in 2011??
  - chabes 7y ago
    I didn’t start with bitcoin in 2011. I closed my bank accounts in 2011. I started with bitcoin in 2015. The main reason my life savings is almost nothing is because it came from almost nothing. $50 here and there isn’t much, but it’s more than zero

dgellow 7y ago

Do you get your salary in cash or cryptocurrency?

mandelbrotwurst 7y ago
If the funds from said 2011 account closures went to BTC purchases, this person may very well not need a salary!
- chabes 7y ago
  I wish I had known about bitcoin back then. It would have made things a lot easier. I didn’t learn about bitcoin until 2015, and even then, I had very little disposable income to experiment with. Still don’t have much income. Definitely no salary.
chabes 7y ago
Salary? Edit: silliness aside... When I get paychecks, I have to either get them cashed at the bank that issued the check, at a grocery store, or through a friend or relative who has a bank account. I request cash for payment, when possible.

ben509 7y ago

> I use bitcoin for long term savings. At least your savings aren't losing to inflation, but this strategy has zero real growth and carries a tremendous amount of unsystematic risk[1]. [1]: https://www.investopedia.com/terms/u/unsystematicrisk.asp https://www.investopedia.com/terms/u/unsystematicrisk.asp

chabes 7y ago
What do you mean by “real growth”? No interest earned? What I want is the ability to safely store value. Saving money in a bank account wasn’t working for me, because monthly fees took literally my last pennies, which led to overdraft charges. Saving money with bitcoin hasn’t just maintained and stored value for me, it has also grown tremendously in value. In my case, it’s risky to participate in the traditional financial system anyway, so I don’t feel like experimenting with an alternative system is any more or less risky.
- ben509 7y ago
  (Disclaimer: you should talk to a CFP for personalized advice.) > What do you mean by “real growth”? Stocks have real growth. It is "real" because your stock is a share of a company whose employees are trying new ideas, teaching each other, making customers happy, etc. > ... it has also grown tremendously in value. Bitcoin had a lot of initial growth[1] indicating it was undervalued, and there was a ton of speculation. If you got in early and weathered the storm, congrats, but the market should have bitcoin correctly priced by now. In general, a currency doesn't grow in value any more than a lump of gold can grow in value. That it looks like it does is nominal growth, it means your benchmark, e.g. USD, is losing value. Your bitcoins will get you more USD in 10 years, but the prices of goods and services in USD will increase as well, so it's a wash in terms of spending power. [1]: https://en.bitcoinwiki.org/wiki/Bitcoin_history https://en.bitcoinwiki.org/wiki/Bitcoin_history

scottLobster 7y ago

https://www.buybitcoinworldwide.com/price/ https://www.buybitcoinworldwide.com/price/ So you're losing money on inflation, and your long term savings are in one of the most volatile assets on the market that derives its value largely from illegal and gray-market transactions. I wish you luck. But frankly you'd likely be better off putting your long term savings in Boeing stock, and that's saying something.

AlchemistCamp 7y ago
> your long term savings are in one of the most volatile assets on the market Due to dollar cost averaging, this is actually a very good thing! The other major question is what BTC's value is going to be in the long term, when they retire and transition from a net saver to a net spender.
- chabes 7y ago
  I’ve been spending bitcoin as long as I’ve been accumulating it. Can’t say the same about most other hodlers, however
qes 7y ago
> you'd likely be better off putting your long term savings in Boeing stock lol if poster above started storing money in Bitcoin in 2011 there's a good chance they are the wealthiest person in this thread.