Random rant on banks and cryptocurrencies

Ladies and gents - let me lay it out for you. If all of your money is in a bank, and that bank is “offline” for some reason, then you’ve lost all access to your money. If you’re a digital payments person that doesn’t carry cash. Well... you’ll have to tighten your belt and hope your bill collectors are an understanding bunch of people (unlikely).

Wells Fargo recently suffered a catastrophic failure. During this time ATMs didn’t work, and any transaction running through their banking system failed. Essentially you had absolutely zero access to your money. This is a mere sample of what could happen to some seemingly secure ways to hold your money.

Most banks are backed and insured by the government. This means if the bank loses your money, the government provides a gaurantee that you will get up to X of your money back. What happens to the bank that made the bad choice? They get a bit of bad press, but the execs... well they keep their bonuses and that nice paycheck. Potentially even with a raise for “managing the crisis.” Some banks can’t even offer you this.

Banks in Germany are insured by a company called a “GMBH”. What is a GMBH? Well that is a type of company that protects the owners from lawsuits and financial losses. Essentially when launching a GMBH, the owners must first deposit a sum of money. This is often 25.000 Euros, though it could be as little as 12.500 Euros. This is the money protecting everyone else if this company really messes up. If they are sued or held liable for something, all that can be collected is 25.000 Euros.

Now let’s think on this for a minute. If all the banks in Germany are insured by a GMBH, then what happens when those banks fail, and this company fails to bail them out? Well people holding money in German banks might get a tiny portion of 25.000 Euros. Doesn’t that make you feel safe? At least that’s what a gold salesperson told me...

One option to “ensure” your safety is to invest in physical assets. Gold salespeople love this. They have a nice “pitch” on how unreliable banks are, and that even your stock assets aren’t safe if they are controlled by a bank. They’ll even so not to store anything in a bank safety deposit box because, if that bank goes under, they are able to pull items from those boxes (apparently). So their response? Trust us, buy gold and we’ll hold onto it for you for an additional monthly fee. Uh huh. That sounds nice.

What’s the alternative? Cryptocurrencies. That’s right. These are assets that you hold, that nobody else can take, and that your only way to lose it is through your own stupidity (like trusting someone else to hold it for you, or losing your private key). So why don’t people look more closely at this? Fear.

These big banks, money holders, thieves and money launderers see it as a threat. So naturally banking leaders such as say that bitcoin or cryptocurrency is a scam. You see similar tactics in political campaigns. Don’t have anything good to say about yourself? Then say something bad about the opponent. It’s called mudslinging. Look it up.

Now you're asking for my evidence, facts of all of this. Well I’m too lazy today to link to all of this. Use your favorite search engine and look it up. If I’m wrong, write me a comment. It’s this decentralized, open, two-way communication that we’ll learn from, not some corporate owned publication that (in itself) is just a business looking to make a buck.

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I see these notices a lot, so I thought I’d write one for myself in my crypto related posts.

“I’m not a financial advisor, I’m an opinated person who likes to share opinions on everything, just ask my teenage daughter. She hates it too. So do your own research, make your own decisions, and take responsibility for them. In other words, don’t be an entitled d*** that blames everyone else for your problems.”