I feel like we really don’t need banks.
Is Bitcoin really going to explode?
Problems I had with Bitcoin was, to expensive to send (lightening solved this) and maybe large node size.
But because it’s so fucking cheap now to send a dollar I feel like bit coin really can replace a bank.
Should we all be buying Bitcoin?
You ever forgotten your pin or lost your bank card?
We have a community set up for bitcoin https://exploding-heads.com/c/cryptobitcoin
Love to get some more discussion going on it.
Also we have a bunch of other crypto communities all starting with the prefix “crypto” if you want to search the community list
Tangentially related, I bought a shit ton of crypto (mostly BTC and ETH along with a few others) a couple of years ago before everything tanked. My balance dropped from nearly $30k to around $11k. Do you think there’s any recovery from this? I’m not selling shit unless I profit even if it all tanks to 0
Digitally holding and transferring money is the least important of a bank’s jobs.
The actually important job is the management and pooling of loans and investments. Bitcoin itself will never give you a loan to start a business or buy a house.
(A bitcoin bank might do that - but they would just be a regular bank using a different medium. And having to put your money in the bank’s crypto wallet, so they can operate, defeats many of the reasons to use crypto in the first place.)
Crypto is not a replacement for banks. It is, or should be, a replacement for VISA and MasterCard, which take a massive cut of the entire economy for a much simpler service.
Crypto will be a replacement for banks. Here is just one example of what is coming:
https://x7.finance/ provides loans to people launching tokens which:
- free up capital for them to invest in other parts of their business
- provides higher levels of liquidity for investors and makes it easier to attract larger investors
- helps the startup achieve a higher valuation at launch.
These loans:
- are permissionless - there is no approval process. You just say you want one
- you do not need to pledge security i.e. give a second mortgage on your house.
- they are under collateralized
As time goes by these loans will become available for other purposes.
As far as pooling of investments (deposits), X7 allows you to do that and so do lots of other crypto projects.
Most people hear crypto and think currencies, but they provide the means to build significant businesses that I believe on day will replace many traditional businesses.
These loans:
- are permissionless - there is no approval process. You just say you want one
- you do not need to pledge security i.e. give a second mortgage on your house.
- they are under collateralized
I was curious so I went and read the whitepaper, and it’s not at all clear to me how this is supposed to work.
"Borrower’s Liquidity Tokens
Liqudity Tokens are sent to the borrower’s specified address and remain in full control by the borrower. The borrower is free to lock the liquidity in any service they wish, transfer or hold them. Liquidity Tokens are not able to re be redeemed for the liquidity while a loan is active.
Default
In the case of a default through any of the terms violated specified on the Initial Liqudiity Loan, the Loan becomes eligible for liquidation."
So there are no consequences for defaulting on the loan, but you aren’t actually receiving the loan in the form of ETH, but of monopoly money (liquidity tokens) that can only be converted to ETH once the loan is repaid? Why on Earth would anyone accept liquidity tokens as payment for any service?
When you launch a token on a decentralized exchange like Uniswap, Sushiswap, etc. you need to deposit an equal amount of ETH and the token you are launching.
The initial value of the token is the amount of ETH divided by the number of tokens you are launching divided.
A successful token launch requires money to be spent on development, marketing, community building, as well as the ETH to deposit into the decentralized exchange to launch the token.
Like most startups in any business, people launching tokens often do not have all the capital they need to do all the things they want to do to make their token launch successful.
So X7 has a Decentralized exchange called Xchange which allows them to lend you ETH by depositing it against the tokens you are launching so you do not have to. But the trick is, only X7 can withdraw the ETH so if you default they can easily get their ETH back.
Most of the tokens being launched have a transaction tax that builds up reserves over time to allow the X7 loan to be repaid.
It is a very specific lending case meeting a very specific need for people launching tokens, but if successful will I can see it expanding to meet other needs.
Very good explanation, thank you.
And yes, it doesn’t map to physical businesses or assets very well, but for that one can hypothetically run a traditional bank using crypto money, it’s just going to be inefficient.
I leverage 10% of my income in BTC. Its a safe bet long term. Also doesnt hurt my wallet if it all goes tits up. Investing any more seems stupid to me as its important to build passive income from safer investments.
Wasn’t there some problem about it where the bigger nodes can block transactions they don’t like? The concept is cool I’ve used it in the past. I still think Monero is better
I never heard of that, but anyway. There is almost always another route. It’s a decentralized system after-all.
thoughts on bitcoin cash / BCH?
I don’t know. I’m not that knowledgeable on shit coins. But I hear lightning transactions made a lot of other coins kinda pointless. Many of the Bitcoin forks were made for cheaper transactions.
from what I remember the Bitcoin core folks wouldn’t increase the block size which led to slow expensice transactions on chain. Bitcoin cash forked to have cheap fast transactions on chain. Bitcoin core then created the off chain “lightning network” to solve their broken on-chain problem. so it didn’t really seem to add much to the equation. some of us basically view bitcoin::bitcoin-cash as reddit::lemmy I guess as an analogy. or maybe something like monero is better instead
monero seems to be a all around better coin. But most places don’t sell it.
