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I know someone who was seriously trying to start a bank. After all his research he concluded that starting a bank from scratch was cost prohibitive. However buy

I know someone who was seriously trying to start a bank. After all his research he concluded that starting a bank from scratch was cost prohibitive. However buying an existing bank was way easier. For the US the amount of regulation that banks have to comply with is enormous. I'm not entirely sure all of it is value add. In contrast bitcoin has almost no regulations or controls around it. Is there not anything in between?

User23 6y ago
I looked into this as well. The most amusing aspect in NYS is that to get a banking license at least one of your board members has to be a good ol’ boy.
- orhmeh09 6y ago
  What’s that mean? Someone on already another board?
  - User23 6y ago
    Basically. The regulations are intentionally vague and I believe my phrasing most clearly captured their actual operational meaning.
    - wdb 6y ago
      Personally, had more problems in EU than in US
      - User23 6y ago
        I'd be very interested in hearing you elaborate on this please.
jedberg 6y ago
As they say, most safety regulations are written blood and banking regulations are written in lost gold. Pretty much every regulation is there because at some point someone figured out how to steal money from someone else, and the regulation prevents that. I don't really think there can be an in between. You either have a totally unregulated market like Bitcoin, where it's incredibly easy to steal from people with absolutely no recourse (not even the courts), or you have what we have now where your money is "safe" and if something happens anyway you can be made whole through the courts, which would then lead to new regulations to prevent that thing from happening again.
- rubicon33 6y ago
  How is it incredibly easy to steal Bitcoin from someone?
  - lgessler 6y ago
    i assume gp's talking about double spending
    - iso1210 6y ago
      I didn't get that, but it's a legitimate problem. There's a chance that at some point some organization (say the Chinese government) will have enough resources to takeover the blockchain, at which point you're at the mercy of them, with no recourse.
  - CorpOverreach 6y ago
    Maybe "incredibly easy" isn't the right term for _stealing_ it - but once it's stolen it's easy to get away with it. This is especially true if you're managing your own wallet/private keys/etc. If you're not careful with your machine, all it takes is some piece of malware lurking in the background to keylog your password, decrypt your wallet's private key, get the funds transferred from your wallet to the hacker's, and poof all your crypto is gone. That's game over. It's gone. No court or government can get it back for you unless they send a SWAT team to go steal the private key from the people who stole it from you. If you're relying on Coinbase or another exchange to host your wallet for you, that's a different story, but at that point they're fulfilling a similar role that a bank does for you.. which to some is entirely what they're trying to get away from by using Bitcoin and such.
  - iso1210 6y ago
    $5 wrench* Far easier with bitcoin than in the olden days when you had to physically transfer cash (and then have the issue of laundering it) * https://xkcd.com/538/ https://xkcd.com/538/
  - igammarays 6y ago
    The amount thieves have gotten away with (several $100m+ crypto heists) is comparable to the total amount that has been legitimately spent using crypto for actual goods and services (not counting “investing”) in the entire crypto economy. https://mobile.twitter.com/patio11/status/1229579962774016000 https://mobile.twitter.com/patio11/status/122957996277401600...
liveoneggs 6y ago
are you kidding? starting a bank in the US is ridiculously easy compared to most countries.
- ryanmarsh 6y ago
  That’s what I thought till I met someone who owned a bank.
  - yoavm 6y ago
    That still doesn't mean that starting a bank in the US is harder (or at least as hard) than it is elsewhere, right? Or maybe that person owned banks all around the world? From reading a little online, it sounds way easier to start a bank in the US than it is in Israel.
    - ryanmarsh 6y ago
      LOL then start one
- missedthecue 6y ago
  Don't think that's really true, unless by "most countries" you mean countries where the financial system is exclusively state owned https://cdn.ilsr.org/wp-content/uploads/2019/05/number-of-new-banks-by-year-93-18.jpg https://cdn.ilsr.org/wp-content/uploads/2019/05/number-of-ne...
ryanmarsh 6y ago
I was employee #3 at a startup funded in part by a guy who started a small local bank. I talked to him about his real estate investments and the bank. Upon my inquiry of how one actually starts a bank he replied, “owning property is a right, owning a bank is a privilege”. Meaning, merely being wealthy enough to start a bank does not mean one can do so. I wonder how many children he had to sacrifice to moloch to get into the club.
0x4d464d48 6y ago
Banks make loans. Banks are expected to have sufficent cash reserves to service all of their customer accounts. If a bank fails, account holders dont get their money back aside from whats insured by the FDIC and only up to 250k$. Bitcoins are literally just pieces of a digital ledger system. No loans and all units of account are depedant exclusively on the ledger. Regulating a bank is required because banks take in capital from account owners and take on additional risk by loaning that capital to others which may or may not get paid back. If banks lose money from bad loans to a point they dont have the cash available to service customer accounts the only thing they can tell people trying to make a withdrawel is 'tough titty'. You don't have that problem with bitcoin. You get many other problems with it, volatile pricing and a complete inability to control money supply, but that's not one of them.
adrr 6y ago
Why do you need a banking license? There are lots of challenger banks that have no banking licenses. In between is a money transfer license and just dealing with anti money laundering and know your customer regulations. I don’t even think PayPal or square have a banking license. Neither does apple with their apple wallet cash functionality.

User23 6y ago

I looked into this as well. The most amusing aspect in NYS is that to get a banking license at least one of your board members has to be a good ol’ boy.

orhmeh09 6y ago
What’s that mean? Someone on already another board?
- User23 6y ago
  Basically. The regulations are intentionally vague and I believe my phrasing most clearly captured their actual operational meaning.
  - wdb 6y ago
    Personally, had more problems in EU than in US
    - User23 6y ago
      I'd be very interested in hearing you elaborate on this please.

jedberg 6y ago

As they say, most safety regulations are written blood and banking regulations are written in lost gold. Pretty much every regulation is there because at some point someone figured out how to steal money from someone else, and the regulation prevents that. I don't really think there can be an in between. You either have a totally unregulated market like Bitcoin, where it's incredibly easy to steal from people with absolutely no recourse (not even the courts), or you have what we have now where your money is "safe" and if something happens anyway you can be made whole through the courts, which would then lead to new regulations to prevent that thing from happening again.

rubicon33 6y ago
How is it incredibly easy to steal Bitcoin from someone?
- lgessler 6y ago
  i assume gp's talking about double spending
  - iso1210 6y ago
    I didn't get that, but it's a legitimate problem. There's a chance that at some point some organization (say the Chinese government) will have enough resources to takeover the blockchain, at which point you're at the mercy of them, with no recourse.
- CorpOverreach 6y ago
  Maybe "incredibly easy" isn't the right term for _stealing_ it - but once it's stolen it's easy to get away with it. This is especially true if you're managing your own wallet/private keys/etc. If you're not careful with your machine, all it takes is some piece of malware lurking in the background to keylog your password, decrypt your wallet's private key, get the funds transferred from your wallet to the hacker's, and poof all your crypto is gone. That's game over. It's gone. No court or government can get it back for you unless they send a SWAT team to go steal the private key from the people who stole it from you. If you're relying on Coinbase or another exchange to host your wallet for you, that's a different story, but at that point they're fulfilling a similar role that a bank does for you.. which to some is entirely what they're trying to get away from by using Bitcoin and such.
- iso1210 6y ago
  $5 wrench* Far easier with bitcoin than in the olden days when you had to physically transfer cash (and then have the issue of laundering it) * https://xkcd.com/538/ https://xkcd.com/538/
- igammarays 6y ago
  The amount thieves have gotten away with (several $100m+ crypto heists) is comparable to the total amount that has been legitimately spent using crypto for actual goods and services (not counting “investing”) in the entire crypto economy. https://mobile.twitter.com/patio11/status/1229579962774016000 https://mobile.twitter.com/patio11/status/122957996277401600...

liveoneggs 6y ago

are you kidding? starting a bank in the US is ridiculously easy compared to most countries.

ryanmarsh 6y ago
That’s what I thought till I met someone who owned a bank.
- yoavm 6y ago
  That still doesn't mean that starting a bank in the US is harder (or at least as hard) than it is elsewhere, right? Or maybe that person owned banks all around the world? From reading a little online, it sounds way easier to start a bank in the US than it is in Israel.
  - ryanmarsh 6y ago
    LOL then start one
missedthecue 6y ago
Don't think that's really true, unless by "most countries" you mean countries where the financial system is exclusively state owned https://cdn.ilsr.org/wp-content/uploads/2019/05/number-of-new-banks-by-year-93-18.jpg https://cdn.ilsr.org/wp-content/uploads/2019/05/number-of-ne...

ryanmarsh 6y ago

I was employee #3 at a startup funded in part by a guy who started a small local bank. I talked to him about his real estate investments and the bank. Upon my inquiry of how one actually starts a bank he replied, “owning property is a right, owning a bank is a privilege”. Meaning, merely being wealthy enough to start a bank does not mean one can do so. I wonder how many children he had to sacrifice to moloch to get into the club.

0x4d464d48 6y ago

Banks make loans. Banks are expected to have sufficent cash reserves to service all of their customer accounts. If a bank fails, account holders dont get their money back aside from whats insured by the FDIC and only up to 250k$. Bitcoins are literally just pieces of a digital ledger system. No loans and all units of account are depedant exclusively on the ledger. Regulating a bank is required because banks take in capital from account owners and take on additional risk by loaning that capital to others which may or may not get paid back. If banks lose money from bad loans to a point they dont have the cash available to service customer accounts the only thing they can tell people trying to make a withdrawel is 'tough titty'. You don't have that problem with bitcoin. You get many other problems with it, volatile pricing and a complete inability to control money supply, but that's not one of them.

adrr 6y ago

Why do you need a banking license? There are lots of challenger banks that have no banking licenses. In between is a money transfer license and just dealing with anti money laundering and know your customer regulations. I don’t even think PayPal or square have a banking license. Neither does apple with their apple wallet cash functionality.