So I was scrolling through my crypto feed on reddit this morning and came across this gem of a repost:

If you don't want to squint, here's what it says:

Does anyone else use Gamestop as a bank?

I got really pissed off with US Bank because I kept overdrafting my account even though I opted out, and the same thing happened with my credit union when I got a debit card.

Now whenever I get paid I go preorder a whole shitload of games. Whenever I need money, I go to the nearest gamestop and ask for my money back on a game I don't want and make a withdrawal. The lines are shorter at gamestop than at the bank and I can trade in old games and have money go straight to my savings account. Gamestops are just as prevalent as banks in my town and I work at a mall so it's even more convenient than running an errand to the bank or using an ATM and getting charged.

The gamestop people are starting to catch on that I'm just moving money around and only buying one preordered game a year, if that, but there isn't shit they can do about it. The best part is, since I always preorder every game coming out I'm still guarantee to get all the exclusive content whether or not I'm sure I'm sure I want a certain game. It's like they're reward me for banking with them.

So aside from sounding like a complete stoner and the fact that he should probably watch his account balances more closely, this is actually a great example of how banking evolved as I discussed in this post. When this person is doing is indeed banking. Besides being hilarious, you can bank with a wide variety of instruments, platforms, and financial products.

Banking is a process, not a building or a set of regulations. It is the act of warehousing or storing your wealth in a way that provides ease of access and liquidity. Other kinds of banks like blood bank, sperm bank, snowbank are all storage of those various things.

What Do You Want in a Bank?

The key characteristics of a bank are access, trust, and liquidity.

• Access - Can you get to your funds? Do you have to be in a specific location or file certain forms? How many hoops do you have to jump through?
• Trust - How much do you trust the caretaker of your banked funds? Will your money be there when you want to access it?
• Liquidity - This drills down on the timing element of access. How quickly can you get to your funds. Are they available to you in as many different portions as you want?

Scoring Banking Systems

Traditional Bank

• Access: Banks score pretty well with access. There are branches and ATMs all over the place. Debit cards and checks allow you to access and spend your money pretty quickly.
• Trust: Banks are terrible on the trust level. We know that traditional banks engage in fractional reserve banking, which is protected by law because guess who makes the laws. The fractional reserve system absolutely means that your banked funds are no longer there in the bank. They just rely on the fact that most people don't need all of their funds all of the time. Compounding all that are all the fraudulent practices banks have been exposed doing. Wells Fargo was caught again just the other day.
• Liquidity: Liquidity depends on the amount you are dealing with. For small, everyday purchases, banks score fine here most of the time. Going to a branch and withdrawing 10,000 fiats in cash and you could be there for quite a while.

When things go bad, the lack of trust and problems with large liquidity combine into a bank run where everyone tries to cash out at the same time. Recently we've seen this in Cyprus, Argentina, Venezuela, India, and Greece.

Land Bank

I was reminded of land banking when I did some google searches for banking properties while writing this article. Land banking is the approach of storing your wealth by purchasing land, usually rural land. The idea is that you can always sell all or part of the land to raise funds.

• Access: Access is terrible in land banking. You have to complete a real estate transaction to get to your money.
• Trust: Trust is very high if you live in a country with a strong legal system. If you are a white farmer in South Africa right now or a rich person in Venezuela, not so much.
• Liquidity: Liquidity is also terrible in banking. This is virtually the definition of frozen funds.

Land banking all comes down to the trust factor. If you absolutely do not see any other opportunities to warehouse your funds safely, then land banking might be appealing to you.

HELOC Bank

Occasionally I come across the HELOC (home equity line of credit) bank where you bank in the equity of a piece of real estate, usually your home.

• Access: It can take a few days or weeks to set up, but once established access is actually pretty good with checkbook control. You write a check on your HELOC account and the amount automatically become attached to your house.
• Trust: Trust is a weird issue in the HELOC bank. On the one hand, your funds are tied to your home which you control. On the other hand, your access to those funds are tied to the lending institution that provides the HELOC. So it's a 50/50 deal on trust.
• Liquidity: Liquidity will depend on market factors. Most of the time, liquidity is fine. When recessions hit, like we saw in the 2008 financial crisis, you will often find that your HELOC amount is cut or eliminated. That can put a major crimp in your plans.

Insurance Bank

Prior to the 1970s, insurance banking was the primary savings vehicle in the US where people would build up cash reserves inside their life insurance.

• Access: Access is pretty good, but not as good as traditional banks. Typically you don't have checkbook control, but instead have to call someone or file a form to get your funds sent to you. This can take a few days.
• Trust: Insurance banking scores very highly on the trust scale. Most of these companies have been around for 100+ years without any defaults and actually have surplus reserves instead of fractional reserves.
• Liquidity: Liquidity is very good thanks to their surplus reserves.

Insurance banking gets a very bad rap from the financial community for one main reason: it takes a long time to break even compared to a traditional bank. Even in a structure optimized to be used as a bank, it can take 5 to 10 years to have access to funds equal to the amount you put in.

This is actually where I keep most of my banked money.

Gamestop Bank

So this is a new one on me. Let's see how it scores!

• Access: Apparently there are lots of locations available and it's not too much hassle to get to your money. No checks or debit cards, so you have to go to the branch locations.
• Trust: Will Gamestop honor their previous terms? Will our stoner friend be cut off? Will Gamestop just go out of business? I don't know, but it's certainly possible.
• Liquidity: So far our friend hasn't had any issues with liquidity. Hopefully that will remain the case.

How Good is Crypto at Banking?

Crypto was imagined as an end-run around the banks. Of course there are lots of different cryptocurrencies out there, each with their own strengths and weaknesses. Let's see how crypto in general stacks up:

• Access: Access will depend on how you do your banking. In a paper or hardware wallet, access is very limited. In a hot wallet app on your phone, access is easy.
• Trust: Trust is where crypto dominates over all other banks. The blockchain means everyone all over the world agrees simultaneously where all funds are.
• Liquidity: Liquidity comes down to which currency you use. BTC has very low liquidity than can take hours or days to move. STEEM has very good liquidity where everything is moving every 3 seconds. Most currencies are someone in between.

How do you bank?