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So reading this: Banks are basically a necessary "evil" to make the current money system work. When I read how banks works, their technology, and how money work

by TeeWEE 5y ago

So reading this: Banks are basically a necessary "evil" to make the current money system work. When I read how banks works, their technology, and how money works in general.. It makes me think: Is this really the way we want it to work. I'm not sure if crypto is currently ready. But one BIG reason for it to succeed, is that the current system is just old... We have all these fintech startups improving money flow, and transfer times, and easy of payment... But it seems like tech build upon tech. centralized startups/companies owning payment systems (Apple Pay, Stripe, Adyen).... Man, i'm going to buy some more ETH :p

mohanmcgeek 5y ago
> Is this really the way we want it to work Yes. This is not a technology problem. This is how banks have been working for the last 400 years. You can't get rid of banks because banks are what create the money. The crypto people have a terrible understanding of what money is.
kmeisthax 5y ago
Well, no: this isn't the way we want it to work. It's how it has to work. Banks aren't just a necessary evil - any functioning financial system needs intermediaries. Furthermore, in all but a small handful of cases, those intermediaries need to be trusted and trust-worthy. Bitcoin, and all other protocols based on Satoshi's design[0], are limited to maintaining a secure ledger of "on-chain assets". Any interaction with the real world still requires a trusted intermediary to feed data back into that ledger; and once you do that the downsides of maintaining a distributed trustless global ledger for the virtual side of those assets becomes apparent. [0] Including Ethereum.
7steps2much 5y ago
See, the thing is that you will need trust at some point. Back in the day you had to trust that your business partner didn't just whip out a sword and kill you to take your money. Then you had to trust that they didn't hand you false coins. After that came false checks. Nowadays you need to trust that online shops aren't trying to scam you. Essentially whenever you do business there will be one person that needs to make the first move, crypto or fiat, someone always needs to deliver first. But if these two business partners don't trust one another then they need a third party they can both trust. In our world these are most often banks or notaries. People that will take money from person A hold it till person B delivers then pass it on. If person B doesn't deliver person A gets their money back, if person A doesn't pay person B doesn't deliver. Now, crypto is trying to claim that smart contracts will solve this in crypto world but that raises the question of who executes these smart contracts and who feeds them information. After all this once again feeds back into the trust problem. Essentially you need banks not because they are modern or technologically up to date or fast, but because they are in fact fully capable of clawing money back if the laws allow them to, unlike crypto where your money is secured by math. Because even if some people don't like it, the chance of the average person being scammed is far higher than your bank or the government misusing the trust you have given them and taking your money.

by TeeWEE 5y ago

mohanmcgeek 5y ago

> Is this really the way we want it to work Yes. This is not a technology problem. This is how banks have been working for the last 400 years. You can't get rid of banks because banks are what create the money. The crypto people have a terrible understanding of what money is.

kmeisthax 5y ago

Well, no: this isn't the way we want it to work. It's how it has to work. Banks aren't just a necessary evil - any functioning financial system needs intermediaries. Furthermore, in all but a small handful of cases, those intermediaries need to be trusted and trust-worthy. Bitcoin, and all other protocols based on Satoshi's design[0], are limited to maintaining a secure ledger of "on-chain assets". Any interaction with the real world still requires a trusted intermediary to feed data back into that ledger; and once you do that the downsides of maintaining a distributed trustless global ledger for the virtual side of those assets becomes apparent. [0] Including Ethereum.

7steps2much 5y ago

See, the thing is that you will need trust at some point. Back in the day you had to trust that your business partner didn't just whip out a sword and kill you to take your money. Then you had to trust that they didn't hand you false coins. After that came false checks. Nowadays you need to trust that online shops aren't trying to scam you. Essentially whenever you do business there will be one person that needs to make the first move, crypto or fiat, someone always needs to deliver first. But if these two business partners don't trust one another then they need a third party they can both trust. In our world these are most often banks or notaries. People that will take money from person A hold it till person B delivers then pass it on. If person B doesn't deliver person A gets their money back, if person A doesn't pay person B doesn't deliver. Now, crypto is trying to claim that smart contracts will solve this in crypto world but that raises the question of who executes these smart contracts and who feeds them information. After all this once again feeds back into the trust problem. Essentially you need banks not because they are modern or technologically up to date or fast, but because they are in fact fully capable of clawing money back if the laws allow them to, unlike crypto where your money is secured by math. Because even if some people don't like it, the chance of the average person being scammed is far higher than your bank or the government misusing the trust you have given them and taking your money.