RE: Banks will get phased out like blockbuster
Banks arent in trouble and whether they will be in trouble, we will have to see. Bitcoin adoption is small and trading bitcoin as an asset is not a utility that will challenge banks. Even if institutions start trading bitcoin, it will not increase use cases or genuine adoption. There are lots of challenges as of now. Wallets are diffocult to understand. Buying bitcoin is tough and while more and more people are trading bitcoin, very few are using it as a personal bank or for value transfer.
Bitcoin attacks two aspects of traditional banking. Custody and remittance. Till the day other goods start being valued in bitcoin, we wil always have fiat and therefore banks. Loans may be made using bitcoin but they will be dollar loans. Banking deposits may come down, banking cost of funds go up, securitiea custody vanish but banking as a business will not be under threat. And most basic fx transactions will be eliminated and if swift become outdated and banks use bitcoin, operations jobs will vanish but the banking shareholder will still prosper. Other money making businesses are not under threat .. trading, ib, money management. Banking isnt really under threat.
Very good feedback but I have to disagree with you on this point. Banks are under threat. Banks do not want money to flow out of banks and be stored or utilized outside of the control of the banks. Banks are under direct threat as it relates to crypto currency.
I will admit the process for moving and storing crypto is a bit rough around the edges, but that will work itself out in time.
I agree that wallet technology, transfer times and transfer fee will all be sorted with time to make the whole process of storing and spending crypto much more user friendly.
However, money may move out banks but will be short term. Some things will also change on the banking side. Firstly investment banks will not suffer. Its only the retail banks that suffer.
Banks used to compete for our money through interest rates they paid on our savings. What if they started offering interest to hold your cryptos? Secondly in majority of the non crypto world, transactions are still in fiat. Goods are valued in fiat, loans are in fiat. Even bitcoin is valued in fiat. Banks will also evolve their business model to be custodians of bitcoin and provide you fiat mortgages. They will use your bitcoin for fiat liquidity and hedge market risk in futures market. Banks are worried because need to settle down on a business model to fight crypto and for that they need regulation.
All your points are valid ones, you sould like you have a background in finance or banking.
I have always worked in the financial sector in different capacities. If you feel like it, i wrote a piece recently on something similar -
https://steemit.com/bitcoin/@karamyog/is-bitcoin-going-to-destroy-goldman-sachs-the-answer-is-absolutely-not
Hi I read your article upvoted, and followed you.
Thanks a lot, returning the favour now.