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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

#181

Post by noselasd »

sharkjacobs wrote: post #121
kayamon wrote: post #115

Earlier quoted context omitted.

> 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? Miners will only mine the blockchain with the longest proof-of-work. They won't mine yours, as Bitcoin's preexisting blockchain is longer. This principle was explained in the Bitcoin paper and is the heart of what makes Bitcoin work. Miners can only use…

why would mining something make it valuable? I can dig up rocks in a field and they won't be valuable just because I'm tired and sweaty and don't have anything else to show for it

You could convince investors there's gold in there and give you money to extract it. (and run away with the investors' money)

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

#182

Post by aaronwalker »

int_19h wrote: post #174
aaronwalker wrote: post #137

Earlier quoted context omitted.

There's a difference between being known by the mainstream and being used by the mainstream. Bitcoin is the former, but not yet the latter. It appears that Bitcoin's main use case is as a long-term store of value (like Gold, but digital). It will be very helpful to have a currency that anyone can use without one country's central bank controlling it, and with Bitcoin's strong network effects, its only a matter of tim…

Thing is, if someone needs a store of value that's not controlled by the bank, gold is already there - and, for most people, it being physical is actually an advantage (easier to secure in a way that they can understand and verify). Then again, most people who hold crypto today, do so in third-party wallets on platforms like Coinbase. At which point the "gold equivalent" would be to buy gold certificates from your ba…

> * being physical is actually an advantage (easier to secure in a way that they can understand and verify). *

Because gold is physical it is not easy to transport, and can more easily be seized by the government -- both of which make it a worse store of value. It is also worse because its supply growth rate is higher, which means that if you hold gold you are losing more value every year (absent changes in demand) than if you hold Bitcoin. In fact, we know exactly what Bitcoin's total supply count will be, whereas with Gold we do not. If BTC gains mass adoption, then it will be the best store of value that we have.

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

#183

Post by 1vuio0pswjnm7 »

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.

You're a bank. Three of your regulators (a) Board of Governors of the Federal Reserve System (b) Federal Deposit Insurance Corporation (c) Office of the Comptroller of the Currency release a "Joint Statement on Crypto-Asset Risks to Banking Organizations". It contains the following text:

"Based on the agencies current understanding and experience to date, the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices. Further, the agencies have significant safety and soundness concerns with business models that are concentrated in crypto-asset-related activities or have concentrated exposures to the crypto-asset sector."

The Joint Statement is dated January 3, 2023.

So, after this warning, what's your next move.

(This thread is hilarious. The title has now changed twice.)

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

#184

Post by kybernetikos »

andirk wrote: post #171
legutierr wrote: post #148

Earlier quoted context omitted.

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 wa…

Isn't it that the less miners, the lower the difficulty therefore each miner that continues to mine will win the block reward more often because of less competition? The security issue with less miners is the whole 51% attack, but even with a substantial drop in miners, it would still mean the attacker would need many thousands of nodes. Seems like that kind of energy and spend would be more profitable mining.

The problem is that if you stop increasing the supply, then you're relying entirely on transaction fees to reward miners.

But transaction fees are determined based on supply and demand for transactions, not based on how much value on the chain is secured by them.

These are only tangentially related, and the strategy of 'store of value' makes them even less well coupled.

Unless there is high demand for transacting, then the economic pressure will be for the cost of attacking the chain to come down, and double spending the value stored on the chain will increasingly become more appealing than transaction fees.

The current equilibrium relies on the supply increasing.

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

#185

Post by alphanullmeric »

lern_too_spel wrote: post #139
alphanullmeric wrote: post #35

Earlier quoted context omitted.

Do you support forcing KYC laws onto exchanges? Or the cryptocurrency transaction tracking laws in the EU? I’m looking for a yes or no answer.

Yes. Why should cryptocurrencies allow fraudulent money transfers to North Korea and not banks that can do them more cheaply? Hint: there is no good reason. Regulation will catch up.

A page pulled right out of the anti encryption talking points book. Im glad we agree that you oppose my financial privacy. Redistribution of consequences is fantastic. Surely you support the patriot act too right? Or is that too much consistency to expect out of you?

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

#186

Post by wardedVibe »

bawolff wrote: post #145
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.

Finiteness is not even necessary for value (ideas being the go-to example). Its necessary for a price (actually non-finite things are free, assuming they're produced in a free market).

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

#187

Post by aaronwalker »

kilovoltaire wrote: post #146
aaronwalker wrote: post #143

Earlier quoted context omitted.

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.

You're right, my generalization is too early. It is based on crypto's correlation with the overall stock market since it is seen as an investment, which has always returned positive over a 15 year period. But this is more speculation than anything else.

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

#188

Post by aaronwalker »

TheDudeMan wrote: post #155
aaronwalker wrote: post #143

Earlier quoted context omitted.

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…

Ethereum is not decentralized. Decentralization is the most important thing in a blockchain. The sooner everyone realizes that, the sooner we can start building momentum on the chains that are viable.

What is your definition of decentralization? What is it based on?

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

#189

Post by renewiltord »

windex wrote: post #110

So many HODLers in this thread. For the normal person on the street, Bitcoin or Crypto never mattered. The endlessly breathless PR was irritating. Whatever happens, this wont be missed.

I disagree. Crypto was the sort of thing you might hear about from a cabbie or at the barber shop. It was definitely something for the normal person on the street.

In fact, that was used as a common sell signal with people quoting the "When your shoeshine boy gives you stock tips" stuff.

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

#190

Post by Geee »

toinewx wrote: post #72
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.

> The supply is finite Until It isn't. Miners will one day decide to hardfork bitcoin to increases the mining rewards, hence increasing the supply. They will of course need to prepare the narrative, and say "it is for the good of bitcoin". It might be in 10 years, or in 50 years. But on a long enough time-scale, you can be sure of one thing: Bitcoin will change, because it's man-made and because it's mutable/forkable…

That's a good thing. It means that they found a sound argument for it. Sound argument has to be something that keeps bitcoin alive and valuable to users. Bitcoin always follows the path which makes it survive. It can mutate, but only if the mutation makes it stronger.
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