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Being your own bank cuts out costly middle men. You can directly receive your salary from your employer rather than employer -> employer's bank -> your bank ->

Being your own bank cuts out costly middle men. You can directly receive your salary from your employer rather than employer -> employer's bank -> your bank -> you, directly spend your money to a merchant instead of you -> your bank -> your credit card company -> their bank -> them, directly send to your landlord, etc etc. No banking layer is needed for any of the use cases you're talking about.

nonameiguess 5y ago
Banks aren't costly. They earn money on their deposits by using them as the reserve store for creating new money, and generally pay their users, not the other way around. Granted, they're costly if you're poor, but I've yet to see a blockchain application that seems likely to be useful for poor people who may not even have consistent network access. Payment processors, on other hand, certainly charge vendors and result in some level of markup to the sale price of goods and services. But blockchains as payment processors add cost as well. This just happens to be hidden right now by the fact miners can earn so much profit from the value of their holdings skyrocketing that they don't charge anything. Crypto values have to stabilize at some point to ever be usable for transactions, so this cannot continue forever, and users will eventually need to pay the cost of the transaction processing directly, just as they do with non-blockchain payment processors. Decentralizing something doesn't make it costless. Some work is being done somewhere by some machine or person.
- billytetrud 5y ago
  My jaw drops for you. Banks are indeed costly. They take your money, earn >5% interest on it and pay you 0.02% interest back. It doesn't even get close to beating inflation. They nickle and dime you on overdraft fees, minimum balance fees, other BS. You're paying them just as much as you're paying credit card companies, if not substantially more. You just don't know it. > poor people who may not even have consistent network access. There are plenty of poor unbanked people whoe have enough network access to use bitcoin, especially with the lightning network. You only need network access when paying (or receiving). You don't need consistent network access. >This just happens to be hidden right now by the fact miners can earn so much profit from the value of their holdings skyrocketing that they don't charge anything That's not true man. Miners are not empowered to charge anything. Miners can only accept transaction fees that users place on their own transactions. Its a market and miners choose the highest fee transactions. That's how it works. You're implying that coinbase rewards subsidize low fees, but you're very wrong about that. When the coinbase rewards go away, fees don't consequently go up - rather miner revenue goes down in such a case. > Decentralizing something doesn't make it costless But it can make it orders of magnitude cheaper. Paying someone on the bitcoin lightning network costs less than a tenth of a cent. Tell me that isn't cheaper than any other traditional payment mechanism.
danpalmer 5y ago
> You can directly receive your salary from your employer... directly spend your money to a merchant... directly send to your landlord, etc etc My point is that none of this is actually possible. My employer doesn't pay me in Bitcoin/etc, has no facility to right now, and would get into a lot of legal trouble if they didn't pay payroll taxes. I don't frequent any shops or online services that accept payment with cryptocurrencies. My landlord wants to be paid in GBP because that's what he's paying his mortgage in and he doesn't want the hassle and cost of conversion. I get that these things are all possible when everyone has moved over to cryptocurrencies, but that's a huge chicken-and-egg problem, and I've yet to see a path from where we are now to this future world that is at all credible/accessible/legal/compliant/safe/cheap.
- billytetrud 5y ago
  > My point is that none of this is actually possible Except it is possible.. What you mean is that the people who pay you don't want to pay you in bitcoin, and the places you buy from aren't taking bitcoin. But they could if they wanted to. It is in fact possible today. You asked "how does being your own bank do these things". I think its pretty clear how they do those things and how banks are not necessary for you to pay someone else (in bitcoin) today. > would get into a lot of legal trouble if they didn't pay payroll taxes Paying employees in bitcoin does not prevent them from paying payroll taxes... > huge chicken-and-egg problem Its really not tho. Individual merchants can (and do) accept bitcoin without all their customers willing or able to pay in bitcoin. Its just another option. Individual employers can offer the option of paying employees in bitcion (especially easy if they're a merchant that accepts bitcoin). Individual employees can opt into such an option. There is no chicken and egg problem, it can happen gradually one person at a time and one company at a time.

nonameiguess 5y ago

Banks aren't costly. They earn money on their deposits by using them as the reserve store for creating new money, and generally pay their users, not the other way around. Granted, they're costly if you're poor, but I've yet to see a blockchain application that seems likely to be useful for poor people who may not even have consistent network access. Payment processors, on other hand, certainly charge vendors and result in some level of markup to the sale price of goods and services. But blockchains as payment processors add cost as well. This just happens to be hidden right now by the fact miners can earn so much profit from the value of their holdings skyrocketing that they don't charge anything. Crypto values have to stabilize at some point to ever be usable for transactions, so this cannot continue forever, and users will eventually need to pay the cost of the transaction processing directly, just as they do with non-blockchain payment processors. Decentralizing something doesn't make it costless. Some work is being done somewhere by some machine or person.

billytetrud 5y ago
My jaw drops for you. Banks are indeed costly. They take your money, earn >5% interest on it and pay you 0.02% interest back. It doesn't even get close to beating inflation. They nickle and dime you on overdraft fees, minimum balance fees, other BS. You're paying them just as much as you're paying credit card companies, if not substantially more. You just don't know it. > poor people who may not even have consistent network access. There are plenty of poor unbanked people whoe have enough network access to use bitcoin, especially with the lightning network. You only need network access when paying (or receiving). You don't need consistent network access. >This just happens to be hidden right now by the fact miners can earn so much profit from the value of their holdings skyrocketing that they don't charge anything That's not true man. Miners are not empowered to charge anything. Miners can only accept transaction fees that users place on their own transactions. Its a market and miners choose the highest fee transactions. That's how it works. You're implying that coinbase rewards subsidize low fees, but you're very wrong about that. When the coinbase rewards go away, fees don't consequently go up - rather miner revenue goes down in such a case. > Decentralizing something doesn't make it costless But it can make it orders of magnitude cheaper. Paying someone on the bitcoin lightning network costs less than a tenth of a cent. Tell me that isn't cheaper than any other traditional payment mechanism.

danpalmer 5y ago

> You can directly receive your salary from your employer... directly spend your money to a merchant... directly send to your landlord, etc etc My point is that none of this is actually possible. My employer doesn't pay me in Bitcoin/etc, has no facility to right now, and would get into a lot of legal trouble if they didn't pay payroll taxes. I don't frequent any shops or online services that accept payment with cryptocurrencies. My landlord wants to be paid in GBP because that's what he's paying his mortgage in and he doesn't want the hassle and cost of conversion. I get that these things are all possible when everyone has moved over to cryptocurrencies, but that's a huge chicken-and-egg problem, and I've yet to see a path from where we are now to this future world that is at all credible/accessible/legal/compliant/safe/cheap.

billytetrud 5y ago
> My point is that none of this is actually possible Except it is possible.. What you mean is that the people who pay you don't want to pay you in bitcoin, and the places you buy from aren't taking bitcoin. But they could if they wanted to. It is in fact possible today. You asked "how does being your own bank do these things". I think its pretty clear how they do those things and how banks are not necessary for you to pay someone else (in bitcoin) today. > would get into a lot of legal trouble if they didn't pay payroll taxes Paying employees in bitcoin does not prevent them from paying payroll taxes... > huge chicken-and-egg problem Its really not tho. Individual merchants can (and do) accept bitcoin without all their customers willing or able to pay in bitcoin. Its just another option. Individual employers can offer the option of paying employees in bitcion (especially easy if they're a merchant that accepts bitcoin). Individual employees can opt into such an option. There is no chicken and egg problem, it can happen gradually one person at a time and one company at a time.