It costs a small fortune to send money internationally not to mention the friction of needing to have a bank account - almost 40% of the people on the planet do not have one[1]. Something like Bitcoin et al (not necessarily BTC itself!), where you can get an address immediately that can send and receive a balance from anywhere & anyone in the world without impediment has the potential to be huge. I appreciate I am being a bit starry-eyed here but I can see a real value to it globally if such a vision can continue.
That's not to condone what might now be happening with institutional investors and Wall St getting in on the action in a big way, or the state of the tech (transaction fees at present, verification delays, snake oil ICOs). The core concept of a currency like this is valuable societally IMO. It might not be bitcoin in the end but the idea, like the internet and publishing, is a powerful one.
The oft-touted benefit of BTC is not that new or appealing to the whole world. In fact a lot of the selling points I see boil down to flaws in the US banking system, and skewed views of how the rest of the world operates.
How does one acquire bitcoin without a bank account? Meeting up with a random person to do a real life exchange is an absurd necessity for a digital currency, it's also risky, comes with a huge markup, is constrained to regional availability and takes time to schedule and actually do the exchange.
Huh? I mean this is obviously not what I'm talking about, I don't think I have to elaborate further.
> If merchants in your area accepted bitcoin you could then use that to pay for goods & services
A prohibitively impractical "if" for the vast majority of wants and needs. That's just an undeniable reality.
> Ok, I bought some of my bitcoin using my bank account but I could've also mined it at some stage (unrealistic now but besides the point) - no bank needed.
Not beside the point at all, that is exactly point: the "no bank account needed" is only true in theory. It's like saying "if you get into a serious car accident just pay for the medical costs out of pocket: see, no insurance needed!"
Sorry, I don't follow then. You asked how you get it without a bank account and I believe I answered that. Why does it matter if I have happened to purchase my coins via an exchange using Euros? Why would you think we would have to meet up personally?
As for your other comments, well I was not suggesting that Bitcoin, or crypto, is ready for this right now. The original point I was replying to was that there is no use for it at all when I think (it was an opinion) - that there is potential in the technology. I am imagining the "if", in the spirit of the original comment, not the current reality.
No bank account needed is true in reality - you could do a remote job and be paid in bitcoin if you really wanted. Or sell goods/services via Open Bazaar [1] and receive bitcoin. None of this might be "good enough" for you but it does exist. We are also far, far on the left of the adoption curve, so yes, I agree there's a ton of stuff to make it more practical than it is.
Because it reinforces the fact that access to bitcoin generally requires a bank account. Everyone knows it is possible to transfer bitcoin over the internet, the key part is that nobody will do that for free, so an exchange must be facilitated and facilitation of exchange over the internet nearly always requires a bank account.
> you could do a remote job and be paid in bitcoin if you really wanted
A luxury available only to tiny fraction of the population, and even then, it's difficult to find substantial work where one is paid in bitcoins without a lot of searching (all the cryptocurrency focused job boards are ghost-towns full of trash and scams)
> Or sell goods/services via Open Bazaar [1] and receive bitcoin
Totally impractical - Open Bazaar is a ghost-town and there are no marketplaces with more activity besides darknet markets (and I've actually tried to sell stuff on OB and seen this first-hand). Also 2-3 multisig is not a solution to the problem of fraud which has an excellent risk/reward ratio for scammers on markets like Open Bazaar.
And being created that way brings to the table all the benefits of classic open source projects. Anybody can download Ethereum and fork it. You may chose for a different approach to solve scaling and I could write code to improve my smart contract execution. On the long run the best project wins, or even both can coexist like thousands of other open source implementations.
Once you have "so many customers" it makes it easier for the rest of the world to join the revolution. Buying an asset with similar characteristics as gold but safely stored anywhere you can write a number (even your brain) and being able to transact with extremely low fees (making micro-transactions possible) without third parties in matter of milliseconds.
Crytocurrencies and blockchain technologies will change the world as we know it right now, enabling a new Internet layer to transact value and not only information. The single big question that arises is if current implementations are the "MySpace or Facebook" of blockchain. Will they succeed or do we need a second generation of tech? Only time can answer that question. My gut feeling is that the better open source implementation will evolve and take the lead.
Your premise to dismiss cryptocurrencies is that you don't believe I'm gonna be able to keep using these three functions in the future. We had cryptocurrencies close to 10 years and the next 10 years just look brighter than the last.
New technology increases economic activity at least partly because of the reduction in the cost of transactions. Steam engines, cars, highways, the internet, etc all reduced the costs of transactions and were accompanied by economic growth. "Open source money" is the next stage in this trend.
It takes longer to build anti-corporate infrastructure than it takes to run a token sale. I don't think you can really say much of anything about the longterm impact of blockchain by looking at this year's class of ICOs, give it another twenty or thirty years.
Let me give you one example that might make you reconsider what is coming. In the future, you won't go to the bank to get a mortgage. One reason for this is because banks won't have the capital to lend you anymore because people won't deposit their money there: why accept a 0.5% interest rate on savings when you could be holding a mildly-deflationary token or staking a proof-of-stake security scheme? Or investing in solar power farms....
So what will people do when they want to buy a house? Instead of going to a bank, they will talk to the real estate company that showcases the property, and that company will take a 20% downpayment and then issue a token to collect funds for the rest. You will pay off your mortgage directly to the broker in cash or crypto (and all payments are recorded on the blockchain, along with the purchase contract -- a transparent template so you will know your rights in full) and the funds will be automatically transferred to token holders, who are splitting the savings with you: they get higher interest payments and you get a cheaper mortgage. Win-win. And if people need cash they can sell those tokens on any number of 24/7 decentralized peer-to-peer token exchanges, because who won't buy a token like that at a slightly discount?
The real estate agency will probably also be plugged into a decentralized AirBNB operation and have various other ways to monetize real estate. So if you ever fail to make a payment, they will take responsibility for monetizing the property such that token holders are paid-off in full. Systemic risk is thus split between the real estate company (that issues the tokens and guarantees the ROI) and the token purchasers (who take on the risk of the property company getting liquidated before they redeem the tokens in the event of a foreclosure -- not a big risk since their financials are mostly visible directly on the blockchain and your token is legally backed by the property in any case).
Where are the banks in this? Good question. We don't need them anymore. And this is just one small part of the financial system.
That's not how banks work. Banks are factories not warehouses.
Banks create money out of thin air. The loan comes first and that causes the deposit - which is then trapped within the banking system for that denomination until it is used to discharge a bank or government liability in that denomination.
As the Bank of England explains: http://www.bankofengland.co.uk/publications/Documents/quarte...
The ability of banks to leverage deposits into fractional debt is restricted by the size of their deposit base and the need for fiat assets to earn competitive rates of return. This is not a "one way street".
Once people start shifting capital to crypto, banks will sell assets to cover withdrawals, and the cycle to which you refer starts to spin in reverse as the worsening terms-of-trade for fiat/crypto exchanges triggers a fall in the real value of assets in terms of fiat. In short, we are going to get more inflation as crypto spreads because there is less stuff being sold for fiat and more stuff being sold for crypto or held because people don't want to trade it for something likely to lose value.
At that point banks will have to raise interest rates to ensure they are not lending at a loss. Higher rates will weaken borrowing and push more borrowers into bankruptcy, at which point your expansionary cycle reverses until enough loans are written-off and the debt overhang is reduced and/or inflation eats up the implicit increase in the money supply relative to actual underlying GDP.
Right now I see no value to cryptocurrencies besides black market transactions and hacking around with financial instruments in a very closed system. I'm open to the idea that I'm missing the whole point, but I've not yet seen a compelling argument for that.