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The number of banks willing to do business with the crypto industry is shrinking

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Re: The number of banks willing to do business with the crypto industry is shrinking

#141

Post by elevaet »

aaronwalker wrote: post #123
rurp wrote: post #83

Earlier quoted context omitted.

A few years ago crypto often had large jumps from deals like these, not so much because of the immediate affect but more because it implied much larger growth was on the horizon. That seemed reasonable at the time, and the reverse seems reasonable now. If large financial institutions don't want to touch crypto, that severly limits the foreseeable upside for the industry.

Interest in crypto comes in cycles, and with each new cycle there are more incumbents that want to get involved. This bear market may have been particularly worrying for the industry, but I'm confident that in 5-10 years from now large financial institutions will again want to incorporate crypto. The networks behind these currencies are too resilient and the upside is too high to avoid.

Why 5-10 years? Hype cycle, or do you think there will be changes in the tech that could make it useful to these institutions at that point?

Re: The number of banks willing to do business with the crypto industry is shrinking

#142

Post by asdff »

monero-xmr wrote: post #98
Animats wrote: post #69

Earlier quoted context omitted.

1 year ago it was $3000.

A year ago TSLA was $368 and today is $120. I don't think we should ban electric cars or think the tech is dead

What in particular does TSLA do that makes it worth more than toyota, honda, and ford combined in market cap?

Re: The number of banks willing to do business with the crypto industry is shrinking

#143

Post by aaronwalker »

elevaet wrote: post #141
aaronwalker wrote: post #123

Earlier quoted context omitted.

Interest in crypto comes in cycles, and with each new cycle there are more incumbents that want to get involved. This bear market may have been particularly worrying for the industry, but I'm confident that in 5-10 years from now large financial institutions will again want to incorporate crypto. The networks behind these currencies are too resilient and the upside is too high to avoid.

Why 5-10 years? Hype cycle, or do you think there will be changes in the tech that could make it useful to these institutions at that point?

Both. There are ongoing developments in Decentralized Finance and Identity Networks on Ethereum that are reinventing more parts of the current financial system, as well as the shift to proof-of-stake that is making Ethereum more scalable and efficient.

I focus on Ethereum just because it's the center of innovation in crypto nowadays. Bitcoin has only incrementally changed its software throughout the years and only gains more use as a store-of-value as demand for it increases (hype cycle). After a bull market run it generally takes 5-10 years to reach its peak again.

Re: The number of banks willing to do business with the crypto industry is shrinking

#144

Post by aaronwalker »

epolanski wrote: post #33
givemeethekeys wrote: post #9

If I were a bank, I'd stay far away from any non-bitcoin cryptos that I'm not an issuer of. Why would I want to own a coin that someone else is able to freely devalue, in addition to conventional currencies? On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite. Disclaimer: I don't own any crypto or bitcoin.

How being the supply finite is relevant? This idea that being scarce implies value makes no sense. You realize we can go on github and setup a bitcoin network too, we call it BitcoinYC, our coins have the same properties of bitcoins, why would that have a value? Please repeat with me: - currencies (wheter fiat or crypto) have no value. You can't do anything with them, maybe watch dead national heroes printed or them.…

If we are defining value, I would not say that value is equivalent to intrinsic value, or else the phrase "intrinsic value" would be redundant. Currencies have value even though they do not have intrinsic value. Notably, this value is as a medium of exchange, a unit of account, and as a store of value. Bitcoin's capped supply increases its ability to store value, and so too does its demand increases. Yes, you could make a currency the exact same as Bitcoin, but it probably wouldn't be as good as a long-term store of value, because its network is smaller.

Re: The number of banks willing to do business with the crypto industry is shrinking

#145

Post by bawolff »

givemeethekeys wrote: post #9

If I were a bank, I'd stay far away from any non-bitcoin cryptos that I'm not an issuer of. Why would I want to own a coin that someone else is able to freely devalue, in addition to conventional currencies? On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite. Disclaimer: I don't own any crypto or bitcoin.

> On the other hand, if I were a bank, bitcoin presents a compelling argument. The supply is finite.

Finiteness is a neccesary but not sufficient condition for something to be valuable. Lots of things are finite that are stupid investments. Its not like banks are investing in vintage comic books.

Re: The number of banks willing to do business with the crypto industry is shrinking

#146

Post by kilovoltaire »

aaronwalker wrote: post #143
elevaet wrote: post #141

Earlier quoted context omitted.

Why 5-10 years? Hype cycle, or do you think there will be changes in the tech that could make it useful to these institutions at that point?

Both. There are ongoing developments in Decentralized Finance and Identity Networks on Ethereum that are reinventing more parts of the current financial system, as well as the shift to proof-of-stake that is making Ethereum more scalable and efficient. I focus on Ethereum just because it's the center of innovation in crypto nowadays. Bitcoin has only incrementally changed its software throughout the years and only ga…

> After a bull market run it generally takes 5-10 years to reach its peak again.

Bitcoin has only existed for 14 years—seems a bit early to generalize anything based on the two times it has peaked and crashed so far.

Re: The number of banks willing to do business with the crypto industry is shrinking

#147

Post by bawolff »

xwdv wrote: post #48
tnel77 wrote: post #23

Earlier quoted context omitted.

I personally find Bitcoin much easier to send to family than a chunk of gold, and Bitcoin’s block reward results in a far more favorable inflation rate than many currencies. There’s more to money than these two aspects, but they are IMO solid positives for Bitcoin.

What would a family even do with bitcoin or a chunk of gold?

If you have some spare unwanted chunks of gold i'll happily take them off your hands.

Re: The number of banks willing to do business with the crypto industry is shrinking

#148

Post by legutierr »

britneybitch wrote: post #109
legutierr wrote: post #104

Earlier quoted context omitted.

> But bitcoin, for the first time in history, sets monetary policy in stone There’s nothing preventing Bitcoin miners from modifying the Bitcoin supply algorithm and inflation rate, except for their collective unwillingness to do so. Bitcoin block rewards go down over time in Bitcoin terms—but so far the long term trend has been that the rewards have gone up in USD terms. We have never seen a sustained, long-term dec…

To change the algorithm, all three of miners, users, and nodes would have to agree to the change. If there is any disagreement, the network continues running under current consensus rules. In fact, a majority of miners did try to strongarm a fork 5 years ago, and they failed, because the users did not agree. There was even been a book written about it. https://www.amazon.com/Blocksize-War-controls-Bitcoins-proto... I…

While the block reward remains high in USD terms, I think you’re right with regards to the power balance. But if the reward falls low enough—which very well might happen, if the price of Bitcoin stagnates and if transaction fees stay low—then there won’t be enough miners to secure the network without some kind of change to the algorithm.

The Bitcoin Cash fork happened when prices were rising and the inflation rate was still high. What would the balance of power have been if the block reward were 1/16 what it was at that time? What if the only miners willing to stay in the network were trying to exploit it in some other way, because the block reward was insufficient an incentive?

In that kind of environment, both users and miners might start looking to make changes.

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