The 3 main reasons the Banks (and governments) don't like Crypto CurrencysteemCreated with Sketch.

in bitcoin •  2 years ago

Banks love blockchain technology. Yes, they do, really!

They are climbing onto the blockchain wagon, and creating their own internal, or even inter-bank, blockchains. Why? Because the technology works, there is proof of it's stability, security, and it is becoming more and more scalable.

What they don't like is the crypto-currencies produced on top of blockchains, which they...

HAVE NO CONTROL OVER


This is what they don't like:

  1. Decentralized
    This means the central banks don't have control over the supply (printing) of money. The money supply is governed by the rate of currency creation on the blockchain, and can only be altered by a consensus of the majority of controlling nodes. Banks want to control the nodes, so they can control the supply.
  2. Peer-to-Peer transactions
    The blockchain nodes themselves confirm (or witnesses) transactions. There is no need for an intermediary to oversee the transactions. The banks therefore can't make any money from transaction fees etc.
  3. No Fractional Reserve Banking / Lending.
    The banks can't lend out more currency than they have in their reserve. This is the big moneymaker for the banks, apart from their other "fees" and account keeping charges. Their is no allowance fractional reserve (fake money) in blockchain currency.

In short, what the government, or bank cannot control, or make money out of it, they will resist it. They will call it fraud, illegal, "the economic underworld" .... until they can control it. Then it will become best practice, but only that part which they are in control of.

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We at Community News really appreciated this post BMJ - concise, yet informative.

Now you being an expert in this field of 'Crypto verses the Banks,' you would be all over Jamie Dimon's Bitcoin rant - supposedly understandable as we have heard from various sources that JP Morgan's trading revenue is down substantially in recent months. It appears the Bank customers are getting better returns on bitcoin.

FYI.

https://www.theguardian.com/technology/2017/sep/13/bitcoin-fraud-jp-morgan-cryptocurrency-drug-dealers

COMMUNITY NEWS

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Thanks @communitynews. I'm very much a beginner on this subject, and am learning every day. It's quite obvious that the banks can't make money on crypto unless they own and control the blockchain it runs on.

You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.

When the banks stopped pegging their currency to the gold standard, they started printing money out of nothing. I guess we must all be stupid.

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Currency has only ever been a intangable medium of exchange that people either choose to adopt or are forced to.

Love the way his daughter has started buying Bitcoin! Why as the Boss of a Global Bank would you admit that your daughter has a better handle on this crypto-revolution than you do?

Once everything is decentralized, banks and government lost control and they do not like it a bit.

@bmj Excellent... Motivating and it will make me joyful to check out effort and resolve prevail. Adore it. Upvoted.

Always what you can't control is not good...

You raise some good points @bmj.

very true mate, well written

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