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...And The Good News: Banks Will Be Obsolete Within 10 Years

Tyler Durden's picture




 

Submitted by Simon Black via Sovereign Man blog,

Every few centuries or so, an amazing new technology comes along that fundamentally changes human civilization.

There are so many other examples throughout history. The Agricultural Revolution. The Industrial Revolution. The invention of the printing press.

The printing press was a particularly interesting parallel for what’s happening today.

Before the printing press, people were living in the dark. Their information was heavily controlled, and they were forced to rely on the ‘authorities’ for personal, financial, educational, and spiritual guidance.

The printing press changed everything. It was an extraordinarily powerful social technology that spawned entire political revolutions and the rapid advance of human education.

In Europe, the number of printed books went from millions to literally billions.

Suddenly information became extremely difficult for governments to control. Ideas became unconstrained. Antiquated political regimes were brought down. And intellectual achievement flourished.

We are now in the early stages of a brand new transformation brought about by yet another technological advancement—the Digital Revolution.

And it’s changing everything, from how we do business to how we meet and engage with one another.

Most importantly, the Digital Revolution has created the ability to bring together literally millions of people and spread ideas quickly and efficiently. Information cannot be controlled.

This has the power to make entire industries obsolete. And banking is one shining example.

‘Modern’ banking is still based on the same system that has been in existence for at least a century.

Yeah, sure, they all have websites now. But this doesn’t make them high-tech.

At their cores, banks are still 19th-century fractional reserve institutions that take in money from depositors, make irresponsible loans and investments, keep razor thin margins of safety, and beg for bailouts when the system breaks down.

And along the way they find every opportunity to screw consumers.

Moreover, commercial banks have de facto control over entire economies.

They nominate representatives to serve on the boards of central banks, who in turn establish interest rate policies and give free loans right back to the commercial banks with money that they’ve conjured out of thin air.

The system is incestuous and obscene. But now things have changed.

Today, every possible function of a bank, from savings to loans to money transfers, can now be done faster, cheaper, and more efficiently by new technology, courtesy of the Digital Revolution.

Websites like Transferwise or Azimo make it possible to send money across the world at negligible cost.

Social media sites provide the opportunity for people to exchange currency with one another without the need of an absurdly-priced money broker.

You can also obtain a loan or investment capital online from crowdfunding sites now, whether its for your startup company or mortgage for your home.

And you can even move your savings out of the banking system altogether—whether to new digital currency platforms, or something ancient and traditional like precious metals.

All of this technology already exists—it’s just a question of how quickly it will be adopted.

Unsurprisingly, millennials are leading the charge.

According to a report by (ironically) Goldman Sachs, 33% of millennials surveyed said they don’t expect to need a bank in five years, and 50% are counting on tech startups to entirely overhaul banks.

And I expect that in 10 years’ time, the technology and adoption will have progressed to the point that today’s banks will be entirely obsolete.

Thomas Jefferson once wrote that “. . . power should be taken from the banks and restored to the people, to whom it properly belongs.”

It took two centuries. But now it’s actually starting to happen.

 

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Fri, 04/03/2015 - 13:38 | 5956352 GrowerJohn
GrowerJohn's picture

It's a great time to learn about free food!

 

Wild Edible Plants:
http://naturecoastpermaculture.com/wild-edible-plants/

Fri, 04/03/2015 - 13:53 | 5956401 froze25
froze25's picture

I think Jefferson was talking more about the Issuance of "currency" rather than the secure transfer of it but either way I think this does go along his line of thinking.  The private banks issuance of currency must be restored to the people.  Bank of North Dakota for example lends and uses the interest from the lending to pay for public projects.  Not a bad idea. However one carrington event and the digital age is over and we rapidity return to the stone age.

Fri, 04/03/2015 - 14:01 | 5956445 bwh1214
bwh1214's picture

The digital revolution will transform the banking industry but not in the way this author thinks, and banks will certainly not get weaker. 

Explained clearly here:

http://www.debtcrash.report/entry/recent-trends-toward-the-e-dollar

and here

http://www.debtcrash.report/entry/bitcoin-an-e-dollar-beta-test

A different and more interesting take than the normal SDR, hyperinflation and debt jubilee predictions you normally hear. 

Fri, 04/03/2015 - 14:27 | 5956552 tmosley
tmosley's picture

An e-dollar would serve no purpose. With no purpose, there is no reason for anyone ti adopt it.

 

Basically, the author is a nutbag that sees conspiracies in his own navel lint.

Fri, 04/03/2015 - 14:50 | 5956647 giggler321
giggler321's picture

and I'd like to add; with all the conspiracies on ZH and daily end of world schadenfreude - you'd of thought to state 10years would seem really silly or is it the otherway around?

Fri, 04/03/2015 - 16:50 | 5956970 winchester
winchester's picture

power should be taken from the banks and restored to the people, to whom it properly belongs.” It took two centuries. But now it’s actually starting to happen

 

you gonna be nailgunned for such crazy comment.

Fri, 04/03/2015 - 17:03 | 5957010 stacking12321
stacking12321's picture

strange how the author says technology exists that makes banks obsolete, yet he doesn't mention bitcoin?

 

Fri, 04/03/2015 - 17:08 | 5957018 crazytechnician
crazytechnician's picture

You say that word on here and it brings out the basement and cave dwellers. Not to mention the Flat Earth Society. Best not mention that word on here until they are all using it without even realising.

Fri, 04/03/2015 - 17:26 | 5957057 Thirst Mutilator
Thirst Mutilator's picture

Who runs BARTERTOWN?

 

It's the only 'MARKET' that I'd ever trust...

 

'convenience' = letting yourself get shystered by cheesepopes [whose only skill in life, historically & across centuries & millennia of history, is to shave transaction costs off of services & otherwise distort prices to the point that the transaction itself is INFLATED to a number whereby they extract their greasy SKIM].

Fri, 04/03/2015 - 17:30 | 5957086 0b1knob
0b1knob's picture

< Banks will be obsolete in 10 years. 

< Banks were obsolete 110 years ago.

Fri, 04/03/2015 - 18:24 | 5957312 Macchendra
Fri, 04/03/2015 - 21:48 | 5957826 wintermute
wintermute's picture

"Websites like Transferwise or Azimo make it possible to send money across the world at negligible cost."

The author is clueless.

These are pieces of junk, a silk-purse out of sows ear, as they still rely on the crap fiat system.

Bitcoin is infinitely superior as a currency AND a payments system, electronic gold. How hard it is to F**K'n learn about?

Fri, 04/03/2015 - 14:53 | 5956660 Temporalist
Temporalist's picture

I am certain that is where they all start...or the Rings of Saturn...

Fri, 04/03/2015 - 14:55 | 5956664 Skateboarder
Skateboarder's picture

When you write something on a piece of paper, the observing parties able to glean that information include you and anyone else with close-distance-direct-line-of-sight of that paper. When you touch a computer, some other computer in the world knows your actions exactly or approximately.

Simon Black also assumes that the modern power grid and cheap energy are eternal.

Fri, 04/03/2015 - 15:07 | 5956683 bwh1214
bwh1214's picture

 

tmosley  The author is not saying that the E dollar is going to happen or is happening, only that it is a possibility.  The way I read it he read a story and it seemed like something our government/banking system would attempt.  It would explain the way the Govt has been so nice to Bitcoin, the so called destroyer of the dollar.  Keep an open mind.  Certainly more likely than the banks disapearing. 

Also if you read the posts the E Dollar is a way to get out from under unsustainable debt, and shifting to a cashless society, the governments wet dream.  Not to mention the banks get to continue to scam us.  So the E dollar may have no purpose for you but it certainly does to the govt and banks and their opinion is much more important than yours.

Fri, 04/03/2015 - 15:39 | 5956773 macholatte
macholatte's picture

 

Not to mention the banks get to continue to scam us.

 

Bingo!

Anybody who thinks anything pertaining to banks happens for the benefit of the sheeple is delusional. The fees the banks will charge for doing nothing will be horrendous.  How would you like to pay $2 for setting up an e-bill like your power bill? How about getting charged $2 to change your address?  The banks are all about control and getting paid for printing money.  That will never change.

They are also in the business of taking care of their friends. Like making huge loans to politicians who couldn't qualify for a toilet seat.... see Clintons Buy a House http://www.nytimes.com/1999/09/03/nyregion/with-some-help-clintons-purch...

and foreclosing on a shopping center so they could then sell it to a buddy for a fraction of its value witha 100% non-recourse loan.

Banks obsolete........ unicorns!

 


Fri, 04/03/2015 - 16:01 | 5956824 Harbanger
Harbanger's picture

I still maintain that the problem is gov., banks are their enablers.
Blaming banks is like blaming the casino because your father blew the inheretance.

If any of these westen govs where to stop borrowing from the future, they would immediately collapse.  It would be the end of the weflfare state.  This is what we're seeing in Greece.  It would be forced to live within the means of their own production and taxation, this translates into austerity and a pissed off population that expected gov to help them.

Fri, 04/03/2015 - 16:37 | 5956942 nailgunnin4you
nailgunnin4you's picture

Bitcoin cunce, the end.

Fri, 04/03/2015 - 19:01 | 5957417 garypaul
garypaul's picture

Hey, ever notice that navel lint is always a greyish-blue??!!!

 

Fri, 04/03/2015 - 15:22 | 5956724 Mr. Frosty
Mr. Frosty's picture

Comparing crypto-currency to an "e-dollar" proves the author doesn't understand what crypto-currency is. Bitcoin itself will probably never become true currency, but the technology behind it will spawn a new banker-free, debt-free, government-free currency. That's the whole point, the currency is controlled by algorithms, not bankers. Since each transaction is cryptographically sealed, you would need a quantum computer to "hack" the bitcoin network. The block-chain is a gigantic ledger, each and every transaction is recorded on it and there are tens of thousands of copies of this ledger. Even the source code for the progam is public.

 

 

Fri, 04/03/2015 - 15:40 | 5956765 bwh1214
bwh1214's picture

Why exactly could an E Dollar or some other sovereign currency use the same block chain technology, but instead of acquisition through the mining process, its creation/issuance under governmental or banking control. 

 

How our community can look at the mainstream with such skepticism but accept bitcoin with open arms I don't know.  Granted some are, but I suggest those who are jumping on the bitcoin bandwagon be a little more cautious.  As is covered in this post http://www.debtcrash.report/entry/bitcoin-an-e-dollar-beta-test the NSA/government was interested in crypto currency in 1996. It is far from this new revolutionary idea.  But hey maybe I’m the one being nieve and bitcoin was a private development and will kick the govt and banks out of the money business.  Though it wouldn’t make sense considering how cordial they have been towards it thus far, don’t you think they would be a bit more reluctant to give up this great power?

Fri, 04/03/2015 - 15:58 | 5956812 Mr. Frosty
Mr. Frosty's picture

Of course the government wants to corrupt the technology towards their own ends and if we let them, they will. The first public use of the internet was between colleges to help them share the contents of their libraries. The government allowed the internet to grow, then the NSA corrupted it and now uses it to spy on the population.

F@*k Bitcoin. All bitcoin will ever be is a collectors item, like the first series of coins minted by the US Mint. The technology behind it, however, gives "we the people" an opportunity to create a currency that is not controlled or influenced by any government or bank.

All currency is based on "faith." Currency is a financial bubble. You literally assign value to something that has no intrinsic value, like green pieces of paper. As long as the bubble is stable, it is a highly functional financial bubble. The problem arises when the government and bankers destabilize the bubble with printing presses and messing with interest rates. When the currency bubble pops, the green paper returns to its intrinsic value, nothing.

If "we the people" put out "faith" in a currency that is outside the control of any government or bank, we can cut them out of the picture. A currency based on algorithms and cryptography has the potential to be the most stable financial bubble the world has ever seen, i.e. the "perfect" currency.

Fri, 04/03/2015 - 16:43 | 5956958 bwh1214
bwh1214's picture

I have no problem with the crypto currency technology, actually I think it is a great innovation and could be great for the economy.  That said I am concerned and very suspect of how it is rolling out, it has govt stink all over it.  You sound like a smart guy and I think you can understand being cautious and that the govt and other powers that be could use it for nefarious ends. 

Fri, 04/03/2015 - 16:50 | 5956971 TuPhat
TuPhat's picture

The perfect currency until it pops and the value returns to its intrinsic value of zero.

Fri, 04/03/2015 - 17:20 | 5957058 crazytechnician
crazytechnician's picture

There is no such thing as intrinsic value.

All value is subjective , as beheld in the mind of the observer.

All value is subjegated collectively through the market which reaches a consensus price.

If you do not beleive me ask a monkey what has more value - a warehouse full of gold bullion or a single bannana.

Fri, 04/03/2015 - 22:13 | 5957859 Mr. Frosty
Mr. Frosty's picture

Funny you should say that. 

What is the intrinsic value of gold? Not much, mostly that it's rare and pretty. Silver actually has far more industrial applications, but it always plays second fiddle to gold because it's not as rare or as pretty. 

Sat, 04/04/2015 - 05:33 | 5958206 crazytechnician
crazytechnician's picture

A Bitcoin is around 250 x rarer than a physical ounce of gold.

Fri, 04/03/2015 - 16:51 | 5956974 nailgunnin4you
nailgunnin4you's picture

Why exactly could an E Dollar or some other sovereign currency use the same block chain technology, but instead of acquisition through the mining process, its creation/issuance under governmental or banking control.  

With all due respect bud maybe you need to spend five minutes researching bitcoin before suggesting points of failure. Why the compulsion to poo poo? Without mining there is no blockchain. Bitcoins are not given away for free, when you 'mine' you are actually using your computing power to power the blockchain. That ignorants can only look at cryptocurrency in the context of the government's potential to hijack it for their own means - it being the most subversive technology ever created - is a pretty good indicator that your government is scared of crypto, not interested in it. Please drop your government-mandated fear.
Fri, 04/03/2015 - 17:55 | 5957200 bwh1214
bwh1214's picture

Scared? Really?

Please read this, it was a paper done on crypto currency by...yep the NSA!!!  In 1996.

http://groups.csail.mit.edu/mac/classes/6.805/articles/money/nsamint/nsamint.htm

And it just so happens that bitcoin is introduced just when the current system was in deep trouble in late 08.  It was a test of this new technology, not by some private benevolent creator but by the govt. You can think bitcoin is feared by the govt but everything points to it being a govt test plain and simple to see how a crypto currency would do in the real world. Do you really think the govt would be that involved and forget about it for 12 years?  No they were just waiting on a good time to test it out and 08 was perfect.  The next step will wait for the next crisis. 

Fri, 04/03/2015 - 18:48 | 5957372 OscarMayerAmsch...
OscarMayerAmschelRothschild's picture

Jesus, let me speii it out for ya. Yes, bitcoin was invented by the NSA. Probably by Tatsuaki Okomoto (sound familiar), so what? Guess what else the NSA produced? Edward Snowden. You're so scared of the NSA that you've failed to see that it's just a welfare system for hackers. Sure, bitcoin was invended by someone at the NSA, but clearly Edward Snowden and his hacker friends were standing around the water cooler one day bitching about the boss, when oops, the source code got made public. It's akin to saying that Henry Ford could somehow controll ALL cars because he invented the first one. Check the code ya mook, it's open source.

Fri, 04/03/2015 - 18:56 | 5957399 bwh1214
bwh1214's picture

So you think they accidentally let it slip and I think it was deliberate.  Not a real big difference of opinion. Is your argument that since it accidentally got released, it’s a good thing and we should trust it?  

Fri, 04/03/2015 - 21:19 | 5957770 OscarMayerAmsch...
OscarMayerAmschelRothschild's picture

I'm saying that it was released on purpose bt a disgruntled employee and they have no control over it.

Fri, 04/03/2015 - 21:38 | 5957815 TheHound73
TheHound73's picture

Because it was the NSA's plan and desire to introduce a limited-supply currency that is issued in a competitive environment to anybody anywhere willing to put in the work and where payments can be sent in any amount to anybody anywhere anytime without asking anybody's permission.  Occams's razor right there.

Fri, 04/03/2015 - 16:36 | 5956940 Crash Overide
Crash Overide's picture

Paging Fonestar?

Fri, 04/03/2015 - 14:26 | 5956547 Harbanger
Harbanger's picture

Electronic currency has nothing to do with banking or currency, it's all about taxation.

Fri, 04/03/2015 - 14:55 | 5956610 Harbanger
Harbanger's picture

Can a Bitcoin-style virtual currency solve the Greek financial crisis?

http://www.theguardian.com/commentisfree/2015/feb/22/can-a-parallel-digi...

Yes, "bitcoin style", whatever that means, it's all about control over all your transactions for taxation.  What's the problem with Greece as far as their bureaucrats are concerned?  they can't collect enough taxes.

Fri, 04/03/2015 - 14:34 | 5956585 OscarMayerAmsch...
OscarMayerAmschelRothschild's picture

I used to love this site, and i cherished most of all the valuable insights of the commenters. Sadly, this is no longer the case. I don't understand how not only did Simon not mention the words blockchain or bitcoin, but so far, neither has a single commenter. Nor have any of you managed to extrapolate that government will also be obsolete (though a bit later) for the same reason. Simon is right, banks will be obsolete in the near future, but not because of private, centralized startups like Azimo or whatever, but because of a certain new technology that functions as an open source, decentralized, peer to peer ledger system. There is no bank function that does not (or atleast should not) wind up on some kind of ledger, nor any bank function that can not be preformed by this ledger. Remember, money at its core is just a ledger system, before saeashells or metal coins there was just "hey Bob, don't forget about that hog you owe me for those 2 cords of wood", or a mental ledger. Gold or whatever came about to function as the medium of exchange, but without the ledger (memory of record of who owes what to whom) the medium of exchange wouldn't function nearly as well. I've been reading that Upton Sinclair quote for years on this site (my accout is new as I've only recently decided to start commenting, but I've been haunting ZH long enough to know that Cheeky Monkey probably became a Tyler and that MDB and Trav777 can now be found over at accredited times) that "you can't get a man to understand something if his job depends on him not understanding it", and that's how I feel about all you gold bugs refusing to wrap you heads around bitcoin. At it's core, it's just a ledger. Get it. And check into Reggie Middleton again with his virtual investment bank built onto the blockchain. How this community can have so much love for the guy when it comes to anythiing but cryptocurrency but totally shit on him when it does is beyond me.

Fri, 04/03/2015 - 14:47 | 5956634 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

limited to 4 transactions per second (on a good day) versus 10,000 for Visa

99.5% of miner's revenue from the block reward (which is 2/3rds gone), not fees

Miners mining blocks with no transactions in them (just for the block reward)

Smaller and smaller number of huge (cartel) miners

Private when you don't want it to be, and public when you don't want it to be

Zero chance to fit into AML and criminal forfeiture laws

Automatic issuance regardless of demand

Volatile price made >80% in China with 50X leverage

10 minutes to do a transaction

Terrible governance problems, with GavinCoin, sidechains, and many altcoins threatening a fork

Terrible brand problem (drugs & terrorists)

Other than that though, yeah it's really good

Fri, 04/03/2015 - 15:11 | 5956701 Condition 1SQ
Condition 1SQ's picture

It sounds like you were involved in the Bitcoin scene for awhile, as well.  One thing I can say about the subject of Bitcoin is people get emotional very quickly.  Talking Bitcoin to a Bitcoiner is like talking politics to a politician.  Things get heated in a hurry.  Bitcoiners have a lot invested (literally) in this idea, and as a result will pump it very hard, even to friends and family.  In this respect, it is very much like a pyramid/Ponzi scheme.  In fact, you can see this in the Bitcoin forums.  Everyone is clamoring to sell out at the peak, right before everyone else does.  Because Bitcoin is so speculative (what is its value??), this mentality makes Bitcoin unusually susceptible to boom and bust cycles.  If you want to play the game, have fun, but just understand that you're walking into a casino and chances are you won't be the lucky one.

Fri, 04/03/2015 - 15:27 | 5956740 OscarMayerAmsch...
OscarMayerAmschelRothschild's picture

-limited to 4 transactions per second (on a good day) versus 10,000 for Visa

I'm not a computer scientist but I believe the devolopers are rescaling for this. If it ever became a serious problem people could just use a faster alt coin with the same functions.

-99.5% of miner's revenue from the block reward (which is 2/3rds gone), not fees

Why does that matter? If the price rises miners will get their reward, if not, some miners go out of business just like in real life. I never said it was a good idea to go buy a mining rig, I'm arguing that blockchain technology (and not even necessarily bitcoin) will make banks and government obsolete. Please stay on topic.

-Miners mining blocks with no transactions in them (just for the block reward)

Again, why would this make any difference in regard to the point I'm making

-Smaller and smaller number of huge (cartel) miners

As you correctly pointed out, 2/3 of btc have already been mined, so let them duke it out for the last 1/3. Also, still off topic.

-Private when you don't want it to be, and public when you don't want it to be

I've personally found that it's private when I want it to be private and public when I want it to be public, but that's only because I know how to use it properly. I'm sure a man of your 'intellect' would have a somewhat different personal experience.

-Zero chance to fit into AML and criminal forfeiture laws

That's not a bug, it's a feature. I suppose you support civil asset forfeiture? Well bless your heart, you must be a real patriot...

-Automatic issuance regardless of demand

Again, non issue. It's mined on a declining algorithmic scale, I fail to see how this is a problem.

-Volatile price made >80% in China with 50X leverage

I don't even know what the fuck you're trying to say here, be more specific so I can keep tearing into you, this is fun.

-10 minutes to do a transaction

Completely false. It takes the blockchain 10 minutes to "verify" the transaction or complete the block, but the money transferrs from wallet to wallet in about 1 second, and can be immediately respent. Again, you've clearly never used it.

-Terrible governance problems, with GavinCoin, sidechains, and many altcoins threatening a fork

Governance? Serioulsy, are you a cop? It's called anarcho capitalism for a reason.

-Terrible brand problem (drugs & terrorists)

Allow me point to the history of HSBC, for example. They started during and as a result of the opium wars and they went on to make a few bucks I think after "rebranding" themselves, which is pretty easy in this day and age with all the bread and circuse3s and no one paying attention to anything. So again, non issue.

Wow dude, for a guy with such a clever and funny handle you sure do suck balls at this logic stuff...

Fri, 04/03/2015 - 15:55 | 5956804 Condition 1SQ
Condition 1SQ's picture

- Re-scaling to get to VISA levels is impossible with the current infrastructure.  A faster altcoin could do it, but where does that leave Bitcoin?

- I won't comment on the mining stuff, too many things to say and not enough time.

- If you think Bitcoin can exist in a bubble where the government can't touch it, you're mistaken.  Compliance with AML and forfeiture may not be important to a pure anarchist, but your typical voter wants a guy trafficking in hard drugs, little girls, whatever to be brough to justice and have his funds seized.  If a currency cannot be bent to the laws of a particular country, don't expect that country to embrace it.  A feature to you, and a glaring hole to the rest of the world.

- Regarding the "10 minutes" thing, it all depends on what you consider to be a "completed transaction".  It's really moot, anyway, because I can run the same transaction with a credit card and have the ability to dispute the charge later.  For an alternative to wire transfers, 10 minutes is fantastic, but where is the dispute mechanism?

- Yes, governance.  Applying an anarchy system to code management will eventually result in a few people managing the show, as it has with Bitcoin.  Now, you can't force updates down a miner's throat, but that's another issue.

- Regarding branding, Bitcoin will always have the reputation of being that seedy counterpart to the traditional banking system, simply because it is so difficult to regulate (and as a result, is a great place for people to squirrel away ill-gotten funds).  Not necessarily a bad thing, but it is reality.

You come across as a smug SOB, and it doesn't help your message.  If you want to spread the Bitcoin gospel, be professional and persuasive.  This kind of shit doesn't work, and makes you look like a shill.

Fri, 04/03/2015 - 17:13 | 5957032 crazytechnician
crazytechnician's picture

The current TPS restriction of bitcoin is an arbitrary software limitation which resticts its maximim block size. This can be increased in any new revision of the bitcoin source code. The bitcoin protocol itself has no speed limit , just like the internet has no speed limit - it is limited by current hardware technology , whereas bitcoin is limited by a software switch can that can easily be changed in it's code.

Fri, 04/03/2015 - 16:41 | 5956952 Crash Overide
Crash Overide's picture

Silver bitchez!

Fri, 04/03/2015 - 17:31 | 5957092 PSEUDOLOGOI
PSEUDOLOGOI's picture

scalability is not what you claim.  this technology is scalable.  

you list some negative talking points.  why not list some positive points in the same post too?  i'm not saying that your negative points are correct by asking this question btw.

Fri, 04/03/2015 - 17:31 | 5957093 PSEUDOLOGOI
PSEUDOLOGOI's picture

scalability is not what you claim.  this technology is scalable.  

you list some negative talking points.  why not list some positive points in the same post too?  i'm not saying that your negative points are correct by asking this question btw.

Fri, 04/03/2015 - 21:59 | 5957834 TheHound73
TheHound73's picture

My software development company has used bitcoin for 100% of internal and external payments for 18 months without a single issue and hasn't used a bank in all that time.  So, yeah it's really good.

Can you offer a better payments solution for my company?

Fri, 04/03/2015 - 15:04 | 5956682 Condition 1SQ
Condition 1SQ's picture

You would be foolish to think that your average ZHer "refuses to wrap their mind around Bitcoin".  Bitcoin is a P2P ledger with an algorithm regulating its use, that's it.  A Bitcoin, or a fraction thereof, has no intrinsic value.  Its value rests on faith in the security of the protocol and, more importantly, the faith that other people will value it in the future.  Much like the dollar, in that last respect.  There is no reason to prefer Bitcoin to any other crypto currency from a features standpoint.  In fact, Bitcoin is inferior to many other cutting edge cryptos in terms of feature set, but it is inherently more stable for that same reason.  For over the counter transactions, Bitcoin is, depending on the circumstances, somewhere between slightly faster and no faster than using credit cards.  Of course, no chargebacks are permitted with Bitcoin, which to the consumer is a huge drawback.  The finality of Bitcoin transfers should scare the bloody hell out of users.  Respect your digital signature, because when those coins leave, that's that.  As much as you think your keys are safe, they can always be destroyed or stolen.

Where Bitcoin shines is transferring money between parties that otherwise would have to be routed through banks.  Howeever, there is a reason wires take so long.  There has to be accountability for the money and a way to resolve disputes if one should arise.  Bitcoin doesn't have this.  To some that is a benefit, to others, it is an unacceptable risk.

Bitcoin has a lot of competition.  Ripple is something I think governments would be more apt to endorse, for starters. It is more centralized and amenable to regulation.  If you think the government will tolerate a currency they cannot control, you are sorely, sorely mistaken.  They can't even tolerate people running nail salons without a license.

Also, as the US tax code is currently written, each and every Bitcoin transaction must be reported to the IRS.  They are all considered capital gains/losses.  If you've been using Bitcoins and haven't reported that to the IRS, then technically you are violating federal law.  They've already got Bitcoiners in a trap, because they know you're not reporting all of those transactions, and even if you were, it would make the currency too much of a pain to use over a credit card.

As a store of value, Bitcoin is too unpredictable at the moment.  I invested heavily in it awhile ago, before the boom, and did very well.  Luck.  Many took a bath.  There is no floor to the value of a Bitcoin.

It remains to be seen whether there will be an appreciable infrastucture built around Bitcoin to make it's use safe and efficient.  Right now, it's a fun speculative investment.  I see its outcome as binary in the next 10 years.  It will either play a huge role in the global markets, or it will be relegated to the realm of hobbyists.  I put the probability of its success at around 10%, maybe even less.

Fri, 04/03/2015 - 16:23 | 5956902 OscarMayerAmsch...
OscarMayerAmschelRothschild's picture

These are some fairly well thought out arguments against so I will do my best to check smug at the door and treat you with some respect.

- Re-scaling to get to VISA levels is impossible with the current infrastructure.  A faster altcoin could do it, but where does that leave Bitcoin?

If an alt coin prevails then so be it. Survival of the fittest. Who cares where that leaves bitcoin, blockchain technology is the real winner here.

-If a currency cannot be bent to the laws of a particular country, don't expect that country to embrace it.

This artice refers to 10 years in the future, as do I. I'm fairly certain that by then, most americans will see the fiat system for what it is and will be glad to accept bitcoin as an alternative to the corrupt system in place. "When given the choice between two evils, I always go with the lesser known of the two" ~ Mae West

-but where is the dispute mechanism?

Again, I'm no computer scientist, but I believe this issue is being addressed either at a fundamental level or with an alt coin. You can already program the money in some pretty facinating ways. For example: You want to leave your bitcoin to your kids but dont want to give the private keys to a small fortune to your 16 year old pot smoking son or your daughter who is trying to compete with Amelda Marcos to see who can do the most sho shopping. Obviously, this is a problem. However, they have already developed a way to give someone a private key to your wallet that takes a given amount of time determined by you to transferr the funds, in which time the owner of the wallet can reverse the transaction if they are still alive and choose to do so.

- If you think the government will tolerate a currency they cannot control, you are sorely, sorely mistaken

What are they going to do, shut down the power grid? If a person knows the proper way to use and store bitcoin .gov can't do a thing about it.

- If you've been using Bitcoins and haven't reported that to the IRS, then technically you are violating federal law.

Same for marijuana, no one cares, especially as the great fraud becomes more and more exposed.

-You would be foolish to think that your average ZHer "refuses to wrap their mind around Bitcoin"

I still see "if you don't hold it..." all the time, so we'll just have to disagree on that one.

Fri, 04/03/2015 - 17:15 | 5957007 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

-but where is the dispute mechanism?

That is what the legal courts are for. If anything block chain ledgers make that one even harder to cheat if implemented within some sort of law and order system. You can't hide the fact the transaction happened or didn't digitally. Both parties need to disclose the bitcoin wallet addresses in that case, anyone can audit the blockchain to prove it took place or didn't afterwards. If the party and counterparty are breaking the law by the terms of said transaction do you really think they are going to go in front of a judge and disclose their bitcoin wallet addresses to settle it? This stuff is already covered by existing laws...

Not delivering of services after receiving payment is already covered extensively by laws on all levels. No changes there either. Being able to reverse charges without the courts ruling on it actually is circumvention of legal law under the guise of convenience.

Now take away the rule of law and courts then you might be able to make a case about the dispute mechanism part from a legal standpoint. Disputes always get settled one way or the other.

Fri, 04/03/2015 - 17:39 | 5957104 crazytechnician
crazytechnician's picture

It's called Escrow. Bitcoin can do it automatically through a mechanism known as a Multi-Signature Wallet , this has the ability to remove all centralised control of the transaction , the buyer and / or seller can select a third party , or multiple third parties to verify the transaction before the payment exchanges wallets. This technology will spawn an entirely new industry around this escrow / multi-signature capability that bitcoin already has built into its source code. No need for courts , lawyers etc , bitcoin is programmable money , it will do what it is programmed to do and evrything is held on the transparent ledger know as the blockchain. When properly implemented , fraud becomes absolutely impossible,.

Fri, 04/03/2015 - 17:14 | 5957036 Condition 1SQ
Condition 1SQ's picture

While I disagree on some of the details, I agree with the jist of your arguments as applied to cryptocurrency in general.

Fri, 04/03/2015 - 17:34 | 5957103 PSEUDOLOGOI
PSEUDOLOGOI's picture

Bitcoin is scalable.  Core devs have already discusssed this.  however you won't see unless you look for this information.  negative and incorrect talking points are abundant however

Sat, 04/04/2015 - 04:41 | 5957114 crazytechnician
crazytechnician's picture

Bitcoin can easily scale well above the combined transactional speeds of VISA and MasterCard. The limitation of bitcoin is it's maximum block size of 1MB per block. This is an arbitrary software limitation which can be increased in any new revision of the bitcoin souce code.

Sat, 04/04/2015 - 06:48 | 5958233 August
August's picture

>>>- If you've been using Bitcoins and haven't reported that to the IRS, then technically you are violating federal law.

>>>Same for marijuana, no one cares, especially as the great fraud becomes more and more exposed.

Time was, marijuana laws were taken seriously, and they still can be if this appears advantageous to the state in its dealing with a particular individual.

The IRS position on bitcoin transactions has been made known.  Non-reporting of bitcoin transactions is a risk that I personally would not take, for the same reason that Al Capone might have been better served by a more IRS compliant bookkeeper.  If you're a US person whose finances may possibly be of interest to the IRS, you'd best make sure that your records omit any reference to bitcoin transactions. Cover those tracks, baby, and mum's the word.

No one cares?  Believe me, the IRS cares.

Fri, 04/03/2015 - 13:39 | 5956353 rejected
rejected's picture

Great! Not only "O" but the entire unelected unionized bureaucracy called government.

Fri, 04/03/2015 - 13:44 | 5956370 pods
pods's picture

Simon this is a retarded post. The entire thing is a red herring. Certainly a system can be designed that allows for settlements. That is not a problem.  Cash on the barrel works just fine for that. Trade happens.

The problem is the paradigm we are in now where credit=tangible money so we can pull forth demand like nobody has in history.

If you remove this then eveything implodes overnight and trade stops. Over time it will pick back up. For those left alive.

Millenials might not have any need for tradional banking services (check cashing, deposits) but they damn sure do have a need for fungible credit to survive.

This idea is the same parallel as at the turn of the 19th century, where corporations were self financing. Bankers panic insured the FED bill passed and wall street banks again took control.

You think crowd sourced capital is going to challenge THIS system?

pods

 

Fri, 04/03/2015 - 14:34 | 5956499 christiangustafson
christiangustafson's picture

Pods nails it like Mary Lou Retton coming high off the vault.

The original article is the silliest piece carried on ZH in recent memory.

Good show, sir!  Bully!

Fri, 04/03/2015 - 14:18 | 5956511 agent default
agent default's picture

By "Millenials" I suppose he is referring to the retards on Facepuke.  These guys have zero and I mean zero understanding of the issues of privacy and the implications of an all digital, full traceable transaction system.  Hell they don't even have the common sense not to post nudes of themselves, because it is in a "private area" and therefore secure. 

Now excuse me I have to go to 4chan.  The end of the world can wait.  Tits never.

Fri, 04/03/2015 - 14:31 | 5956553 sapioplex
sapioplex's picture

Learning is a painful process.  Those on Facebook (and other social media) don't feel as though they've been burned by it ... yet.  Imagine 100 million dupes suddenly waking up and becoming very angry, all at about the same time.  It won't be pretty...but it quite possibly could be effective for positive change.

Fri, 04/03/2015 - 16:56 | 5956986 Crash Overide
Crash Overide's picture

Anyone remember those stories about all the tools the NSA has in place, or quantum encryption breaking computers they are working on?

If it's digital, online, networked, etc... it can be hacked, nothing is totally secure or anonymous this day in age.

If someone wants it bad enough they will find a way.

 

http://www.cnet.com/news/nsa-planted-surveillance-software-on-hard-drive...

http://www.pcworld.com/article/2899852/to-avoid-nsa-cisco-gear-gets-deli...

http://www.cnet.com/news/nsa-working-on-quantum-computer-to-break-any-en...!

Fri, 04/03/2015 - 22:28 | 5957889 Mr. Frosty
Mr. Frosty's picture

If the government develops a quantum computer, we'll have much bigger problems than the Bitcoin block-chain being hacked...

Sat, 04/04/2015 - 13:06 | 5958798 sapioplex
sapioplex's picture

"If it's digital, online, networked, etc... it can be hacked, nothing is totally secure or anonymous this day in age."

This is not specifically true.  If you're using 'normal' / off-the-shelf solutions, you are correct.  However, there are relatively simple ways to make systems so secure that it is far cheaper to gain physical entry by breaking knees rathern than atttempting anything digitally.  Systems can be made so secure that it is nearly impossible to 'hack' them.

Fri, 04/03/2015 - 14:31 | 5956569 Captain Willard
Captain Willard's picture

God love Simon, but Pods correctly points out that Simon has confused settlements/payments with credit extension, deposit insurance and fractional-reserve banking. I won't even bother bringing up SWIFT/ACH , the Russian alternative, the Fed Wire etc.

That said, he is on to something and banking will change a lot with all this technology.

However, technology means Big Brother sees everything/everyone transacting. Is this the change we want?

Fri, 04/03/2015 - 14:45 | 5956625 Jonesy
Jonesy's picture

Not to mention anybody that recommends Chile as a solution is full of shit, or hasn't lived there very long.

Fri, 04/03/2015 - 14:52 | 5956655 Praetorian Guard
Praetorian Guard's picture

Hahahaha, I almost shit myself laughing so hard after reading this article. The day banks become obsolete is the day you drop dead, even then they will come around trying to collect, but you will be worm food and I doubt you will care. Banks are here to stay. Banks will remain as long as someone somewhere decides they want to fuck the little guy over. Millenials are idiots for the most part, and have no fucking clue what is coming.

Come join us for free at www.gunsgrubandgold.com

Financials, links, survival, your own blog, etc.

Fri, 04/03/2015 - 17:45 | 5957156 crazytechnician
crazytechnician's picture

How's it going down there in that damp basement ? It is safe to come out you know , that bright light you see through the crack is called sunlight , you will find it very invigorating. And those cold cans of prepper food you have been living off , well they are 30 years old. You could climb out , get yourself some fresh food , have a wash and enjoy the sunlight.

Fri, 04/03/2015 - 14:53 | 5956658 ThroxxOfVron
ThroxxOfVron's picture

"You think crowd sourced capital is going to challenge THIS system? "

 

https://www.youtube.com/watch?v=TU3-lS_Gryk

 

Fri, 04/03/2015 - 14:17 | 5956399 Jumbotron
Jumbotron's picture

You gonna pay somebody to manage your money....even if it's digital bits.  Which it really is anyway.  Pieces of cloth with dyes and pictures of dead people only give us the illusion that money is real.

Nothing is changing.....only the form factor.  And method of storing and transferring.

If you are not a Central Bank....you're really not EVER going to have control of "your" money.  If you didn't create the money.....it ain't yours.

Fri, 04/03/2015 - 13:59 | 5956433 Perimetr
Perimetr's picture

They are f*cking obsolete NOW. 

 

Except the slaves are too hypnotized to notice.

Fri, 04/03/2015 - 14:25 | 5956544 daveO
daveO's picture

A Goldman Sachs survey? Pahleez. Debt slavery is bigger than ever. 

Sat, 04/04/2015 - 07:54 | 5958268 doctor10
doctor10's picture

Heck, an Iphone app could probably be worked up to do it all!!

 

Fri, 04/03/2015 - 13:20 | 5956276 Rhal
Rhal's picture

Whoohoo.

But can it be done without a huge government overseer?

 

Fri, 04/03/2015 - 13:35 | 5956340 TheReplacement
TheReplacement's picture

The NSA says, sure thing boss.  Wink, wink.

I like Simon Black but this one is too much.  I WILL NOT USE DIGITAL BLAH BLAH.  I DON"T WANT IT AND I DON"T NEED IT.  STOP PUSHING THE MARK OF THE BEAST.

Fri, 04/03/2015 - 13:56 | 5956414 KnuckleDragger-X
KnuckleDragger-X's picture

Don't underestimate the NSA but don't overestimate them either. I make my living consulting on very large data and networking systems and the difference between collecting information and being able to use it are completely different things. Separating out the actual data you want is extremely complex on a very large scale and it's getting worse. Also the people they need to watch the closest know this and understand how to avoid detection which at its simplest are thousands of years old. Knowing there are fish in the sea is not the same as catching them. The dangerous thing about the massive databases is controlling the population which is much simpler. Abusing the innocent to control the masses is much easier to do and the reason they exist, at least until the really dangerous people decide to strike.

Fri, 04/03/2015 - 15:42 | 5956780 NotApplicable
NotApplicable's picture

I'm assuming that the NSA is mainly worried about collecting all of the available info, knowing that someday, Google (et al.) will find a way to index and thus ultimately join it.

Fri, 04/03/2015 - 17:19 | 5957055 KnuckleDragger-X
KnuckleDragger-X's picture

Google won't play sharesesy's unless they get a BIG payoff....

Fri, 04/03/2015 - 13:21 | 5956279 IridiumRebel
IridiumRebel's picture

Yeah right....remove the parasite and the host dies.

Fri, 04/03/2015 - 13:31 | 5956329 gold-is-not-dead
gold-is-not-dead's picture

yes, DASH/BTC

Fri, 04/03/2015 - 13:25 | 5956281 Renfield
Renfield's picture

<<And I expect that in 10 years’ time, the technology and adoption will have progressed to the point that today’s banks will be entirely obsolete.>>

Simon Black, agree entirely. It is the same with many other institutions today. This also applies to huge centralised governments handing down 'laws' by statute from on high, and centrally-run 'education' programs that keep a person unproductive and inexperienced until well into their 20s. It is past time to retire banks as yet another fossil of the 20th century.

The same is true for many labour markets, including travel agents, 'financial advisors', real estate door-openers, and other institutions whose primary purpose was to 'bring buyer and seller together', or to share access to secret lists, that are now open to all in the internet age.

I appreciate this focus on the future, instead of wasting time wringing your hands about why these 20th-century institutions are failing so badly in this new millenium. Bravo.

Fri, 04/03/2015 - 13:29 | 5956316 Mike Honcho
Mike Honcho's picture

Ren, you and Simon are not understanding what it takes to run a business.  So a car dealership uses tablets instead of salesmen, they still need financiers, mechanics, management, shipping.  Bank is the same situation.  So you can auto deposit and check balances online, ok, the operations side of banking is massive and not close to automated.  I have worked on processes that attempted automation and failed miserably.  Programming and such eliminates some pencil pushing but the industry is far, farther than 10 years, from obsolete.

 

Travel agents yes, hello Orbitz, real estaters, yes again.

Fri, 04/03/2015 - 14:09 | 5956400 Urban Redneck
Urban Redneck's picture

Actually bank operations have largely been automated.  Over the course of five years we grew volumes by over 1000% while cutting headcount.  However, there are certain functions of a bank (particularly on the commercial and international sides) that will not be automated anytime soon or face serious competition from non-bank financial institutions, much as the infrastructure that supports a largely automated relationship with retail customers will not disappear.

Millennials don't even understand finance, so gives a fuck what they think about the future of banking... unless you are into profit by sheeple fucking, then there are probably some opportunities to be exploited. 

Fri, 04/03/2015 - 13:22 | 5956283 JLee2027
JLee2027's picture

Electronic money is evil. Turn off a switch and you wipe someone out. No thanks.

 

Fri, 04/03/2015 - 13:26 | 5956299 MidwestJester
MidwestJester's picture

Right, if you don't hold it, you don't own it! All the digital currency revolution is doing is putting the power to control the 'money' in some other people's hands.

Fri, 04/03/2015 - 13:31 | 5956327 centerline
centerline's picture

No need to micochip every idiot on the planet when they will willingly walk around with it in thier hand, wallet, car, etc.

At least until it is too late and people start realizing how the tech can be used against them.

Fri, 04/03/2015 - 13:34 | 5956338 rejected
rejected's picture

LOL.... They already know it's being used against them,,, they don't care

Fri, 04/03/2015 - 13:41 | 5956360 centerline
centerline's picture

Most don't see the relevence yet.  All seems like the "other guys" problem because he "had something to hide." 

Just wait till $ is all digital (is probably coming) and everyday accounts start getting tickled directly by the IRS or some other agency.

Fri, 04/03/2015 - 14:41 | 5956596 JLee2027
JLee2027's picture

Revelation 13:17

It forced all the people, small and great, rich and poor, free and slave, to be given a stamped image on their right hands or their foreheads, so that no one could buy or sell except one who had the stamped image of the beast's name or the number that stood for its name....and the number of the beast... is six hundred and sixty-six.

Fri, 04/03/2015 - 14:42 | 5956613 centerline
centerline's picture

scary.

Fri, 04/03/2015 - 16:10 | 5956848 rsnoble
rsnoble's picture

You're already stamped.  You got a ss number, a dl number, a cell phone or who knows what else?  You don't need another number on your fucking forehead also.  You were branded a long fucking time ago.

Fri, 04/03/2015 - 16:15 | 5956874 BigJim
BigJim's picture

 Just wait till $ is all digital (is probably coming) and everyday accounts start getting tickled directly by the IRS or some other agency.

My biggest hope is that our corrupt leaders will realise that a 'no cash' society limits their ability to graft, too.

However, if the banksters offer them enough in the way of 'legal' sinecures when they leave office they probably won't care.

Fri, 04/03/2015 - 13:28 | 5956305 centerline
centerline's picture

It really would result in zero control over one's stored labor - and life.  Instant confiscation.  Instant taxation. Etc. 

Now just connect all the dots... all the data regarding where you go and what you do.  Added transponders in virtually everything mobile.  And so on.  Welcome to 1984 like even Orwell could not imagine.

Anyone who wants to pull that "if you have nothing hide" crap can kiss my ass.  It isn't about whether or not WE are honest, it is about being set up to be a victim by others who are NOT honest.

 

Fri, 04/03/2015 - 13:38 | 5956350 TheReplacement
TheReplacement's picture

You have been reported for supporting terrorists.  Duck, it's a drone!

Fri, 04/03/2015 - 13:36 | 5956346 TheReplacement
TheReplacement's picture

The antichrist disagrees with you.  That is why I upvoted you.

Fri, 04/03/2015 - 14:35 | 5956587 tmosley
tmosley's picture

This is exactly like saying you can destroy the Bible and all of Christendom by simply destroying a bible.

There are billions of bibles, and billions of copies of the blockchain out there. The destruction of all of them implies a disaster on the magnitude of a hit from the Death Star.

Fri, 04/03/2015 - 17:45 | 5957159 ThroxxOfVron
ThroxxOfVron's picture

"Electronic money is evil. Turn off a switch and you wipe someone out. No thanks. "

 

You don't need to wipe them out.

All you have to do is tell them their balance is X when it ought to be Y.

I was at Hostos in the Bronx, NYC two days ago to support an apprearance by rapper/mogul Jay-Z.  Jay-Z and some of his usic industry pals have decided to organize and pool money to create a new on-line music streaming venture called TIDAL.  

I was there and heard Jay-Z talk about the artistic and business concepts behind TIDAL.  

Later I was driving home with a rather business savy friend who happens to be the son of a deceased banker of great notoriety.  I am quite sure that most of the more knowledgeable posters here would recognise his last name as it is the same as a defunct INSTITUTION™ that is both the object of hatred and derision around here.

My pal asked me what I thought of Jay-Z and if the service would be profitable, held private or eventually taken public for big bux, etc...

I answered that it was almost certainly a scam.  That it was being built on the digital delivery model which is almost perfectly designed for committing fraud.

He asked why I thought TIDAL would be used to defraud customers -and I replied that the Customers may not be defrauded but that the artists almost certainly would.

What?  How?

I told him: See, in a physical distribution system every single unit has to be stolen physically at a location also; but, in a digital delivery system everything can be stolen at any time right at the server.  

IF I am an artist with a song or app up on some site for download or streaming : Apple, Google, spotify, TIDAL, whatever: the people taht run the server are not compelled to share the data and analytics pertaining to sales or downloads or times streamed with the owners of the media.  The artists or app developers are told that such and such number of downloads or listens have been recorded to the server and they are paid based on that.  

I believe that these numbers are always lies, and that the media owners cannot verify any of this data and are almost certainly being ripped off on a massive scale.  

I also believe that the more banking and transacting is migrated to digital the more is being stolen by the people that manage the transactions systems.: and that this is why digital currencies are a horrible idea.  

The govenment isn't the only entity interested in stealing whatever they can from the digital management systems: the digital management systems owners/managers actually have first access with which to steal.

Silence ensued....

Fri, 04/03/2015 - 13:31 | 5956330 Consuelo
Consuelo's picture

If you don't use a bank, you will be 'coerced', by way of continually re-defining what constitutes a 'terrorist', into the use of another government approved agency.   A mass of people will simply not be allowed to transact individually, privately or anonymously.   That is just the long & short of it.   This shit-show of Big-government has yet to fully run its course, and it ain't goin' quietly into the night... 

Fri, 04/03/2015 - 14:23 | 5956534 sapioplex
sapioplex's picture

At some point the mass of unhappy subjects becomes more than the power structures can control. Combine that with technology and everyone trying to solve the problems in parallel.  It is more likely now than ever before that radical changes occur.  Unexpected changes.  Things could easily become very volatile.

Fri, 04/03/2015 - 13:31 | 5956331 rejected
rejected's picture

It's not a digital revolution.......... It's a digital muppet CAGE.

Fri, 04/03/2015 - 13:36 | 5956345 centerline
centerline's picture

By the way Simon, banking as we know it is going to die anyhow.  Just a matter of time.  But not because of some new great technology that will revolutionize it.  Rather because it has morphed into a parasite that has managed to screw the world over too long and too hard. 

Fri, 04/03/2015 - 13:43 | 5956366 venturen
venturen's picture

banking died a while back....what we have is hedgefund banking. Where all banking is really just a conduit to fund HFT and ponzi wall street schemes!

Fri, 04/03/2015 - 13:48 | 5956390 centerline
centerline's picture

Exactly.  And when financialization comes crashing down, not only will the banking system as we know it disappear, it is unlikely that people will trust banks again for a very long time.  There is a damn good chance people won't trust government either.  Which creates a real quandry as to what will replace banking (at minimum an institution to guarantee some sort of liquidity and facilitate transactions).  Absent confidence, all we have left is barter (and bullets).  The only alternative is something entirely new... not a return to century old banking.

Fri, 04/03/2015 - 14:21 | 5956529 sapioplex
sapioplex's picture

They certainly won't trust government as we currently know it.  There are new forms of government beng toyed with in the wings and it doesn't necessarily take oligarchs to make them happen. Technology and the will of the people is a formidable combination that hasn't been fully expressed yet.

Fri, 04/03/2015 - 13:37 | 5956349 dondonsurvelo
dondonsurvelo's picture

Yes, maybe the brick and mortar bank will disappear but banking will not.  You can call banking by another name but its functions will still be the same.

Fri, 04/03/2015 - 14:19 | 5956519 sapioplex
sapioplex's picture

Right now "banking" includes a lot of things that most people don't need or interact with.  In fact, I'd argue that most of the surface area of "banking" is something most people are clueless about.  Most people just want an account that makes it easy to be paid and pay bills.  That's a very small surface area of the business but the vast majority of what people think about when you say "bank."

Now imagine just that one part was revolutionized.  The entire structure of what a "bank" is would shatter into many pieces that are unrecognizable from what we understand that to be today.

I think we're going to see this happen in the not-so-distant future.

Fri, 04/03/2015 - 13:40 | 5956357 TheReplacement
TheReplacement's picture

I can imagine fonestar, after reading this article, standing in some intersection somewhere in Canada with his pants around his ankles beating his meat like it owes him bitcoin.

Fri, 04/03/2015 - 13:47 | 5956383 Totentänzerlied
Totentänzerlied's picture

You still need a card of some sort to make physical face-to-face transactions - websites can't print or mail you physical currency. Banks handle currency circulation. Most retailers, even the biggest, have no way of accepting payment from any of these online-only services. You need a bank card, bank check, or cash.

Being able to send someone "money" is cool, but without a bank or a moneychanger, you can't turn it into cash, and if even if you want to use it online, you'll need to transfer it to a bank card account unless you're using one of the few sites that happens to support some digital service other than paypal.

And you still need to establish credit with via recognized creditor institutions in order to do things like rent a car, book a vacation, rent any kind of property, or secure a mortgage.

Fools are always looking for new ways to be parted from their money. Using digital money services for anything more than occasional petty cash transactions is moronic. This is really a non-solution in search of a problem. How long until fractional reserve bitcoin loans? I believe more than one cryptocurrency bourse website has already attempted that.

Fri, 04/03/2015 - 13:55 | 5956417 libertysghost
libertysghost's picture

I thought that too...he should have just couched it in the "competition is increasing for those services" at this point.  There is a physical nature to our being and to the things we accept as "value".  Those will be stored somewhere and I don't see anything knew that requirement.  Bitcoins are bought with other currencies...and then sold in to other currencies...so it's a competing currency which is interesting but I don't see how it's anything new in foundational terms (I know you didn't say that...I'm speaking to others on that last bit).

Fri, 04/03/2015 - 14:31 | 5956566 bcking
bcking's picture

I guess you really don't understand bitcoin and haven't read the actual documents or used bitcoin yourself. You know, you should actually know about it before you talk about it.

Bitcoin can transfer money instantly to anywhere in the world for fractions of a penny - all while being confirmed within the public "blockchain" ledger.

This alone makes bitcoin valuable unless you prefer to use 1940s techonology, thousands of employees and massive fees to do the same thing. You protest now and throw fits, but eventually, like the complainers during the "horse and buggy to automobile" era, you will make the change and say, "of course we knew it would happen".

Typical mob-think. 

Good thing I'm here in North Korea with all these hot asian broads at my disposal. 

Fri, 04/03/2015 - 14:48 | 5956638 centerline
centerline's picture

The idea of bitcoin is simply brilliant. And I am a long-time proponent that technology is mankind's greatest hope to break the age old patterns that otherwise will lead to our destruction.

However, there is also the issue of timing - among other variables.  There is no way in hell that the current power structures are going to allow any independent, free system to usurp their very life-blood.  Allowing anything external to go on this far is only because it serves a greater purpose... which is electronic currency.  But certainly not something outside thier sphere of control.

Fri, 04/03/2015 - 15:51 | 5956794 libertysghost
libertysghost's picture

I assume you aren't replying to me since I basically said the same thing...it competes with other currencies and other ways of transferring money.  How do I get a bitcoin?  Do I buy one with a dollar?  Do I do soem sort of service and "earn a bitcoin"?  Or both maybe?  It's still the same thing as a dollar (or the same thing as a product or other currency I can buy with a dollar) then, isn't it?

Fri, 04/03/2015 - 22:09 | 5957855 TheHound73
TheHound73's picture

Replace "bitcoin" in your questions with "gold coin" or some other commodity and you'll arrive at the same answers.  Digital YellenBux are centrally controlled by banks/Visa/PayPal/SWIFT and you'll need their continuing permission to use them.  Bitcoin is decentralized, you need not ask anybody's permission to use bitcoin.  The supply of YellenBux is controlled by the whims of the Federal Reserve.  The supply of bitcoin is controlled by a mathmatical equation known to all participants.

Fri, 04/03/2015 - 14:55 | 5956650 daveO
daveO's picture

Here's how you know bitcoin is a gov. decoy/brainwashing device;

http://en.wikipedia.org/wiki/Bernard_von_NotHaus

Bitcoin is a monumental set up/entrapment for all the 'I'm smarter than those old farts' millenials. Hey kids, be sure to say 'baa, baa' when you buy them. Don't call me an idiot, call me a 'fucking' idiot because, we all know, that is the only word that makes a millenial's heart race more than uttering bitcoin.

Fri, 04/03/2015 - 16:32 | 5956932 OscarMayerAmsch...
OscarMayerAmschelRothschild's picture

How in the fuck does Bernard (who was scamming prople charging double the melt value of the silver) prove a single thing about bitcoin. PLEASE enlighten us, I can't wait.

Fri, 04/03/2015 - 18:07 | 5957252 r00t61
r00t61's picture

Bernard offered a genuine alternative to the Federal Reserve currency note.  As a result, the full force of the Federal government was dropped on him like a ton of bricks.  His alternative currency was crushed into powder.

By extension, if Bitcoin - or its underlying blockchain technology - were truly disruptive to the current status quo of governments/banks Doing Business As Predators, Inc., then the government would be making moves to discredit it - e.g., associate it with Islamic terrorism, pedophiles, drug dealers - or ban it outright.

Fri, 04/03/2015 - 22:17 | 5957862 TheHound73
TheHound73's picture

That's right, Ban Maths! 

Bernard was an easy target.  Lesson learned: don't present a central target, make a worldwide distributed network where even having the majority of nodes knocked out wouldn't affect the network as a whole.  Thus Bitcoin.

It very well may come to the point where Govenrments disallow their slaves the right to send public messages in the bitcoin format.  If so, gov't runs the risk that nobody would give a shit.  

Fri, 04/03/2015 - 13:48 | 5956384 jakesdad
jakesdad's picture

one could make the case that the legacy banking system is really just an obsolete version of bitcoin.  when I try to explain bitcoin to non-tech people I tell them it's basically just a croptologically signed, transparent distributed ledger (technically journal).  I then ask how their debit card is different other than lacking the crypto-sigs & transparency?  that's what governments fear about it!  not the drug/sex trades, the loss of control and/or ability to dilute the existing base w/arbitraey #s of new units handed to their preselected beneficiaries.

Fri, 04/03/2015 - 13:49 | 5956395 libertysghost
libertysghost's picture

Black did kind of leave out all the blood that was "let" in those other transformative times.  As others are noting, the "system" (which will die as it becomes less less efficient in relation and because of the pathology of central systems to encourage less efficent over time...relatively) will fight back...but it will lose...with lots of people dying, becoming refugees, being imprisoned, etc etc in the meantime.  I appreciate his optmistic post though still.  Because it's easy to get depressed and cynical otherwise.

But the key term, in my opinion and what I teach (or try at least), is the crisis of legitimacy you witnessed during those periods after those transformative innovations (speaking, writing, the plow, the press, etc.) and how you are seeing the same thing happen now.  Many rants below on how the corporatist system will still just figure out new ways of controlling everything.  History doesn't say they will succeed forever, and it appears the length of those oppressions have shortened over time (to me at least).  Centralized systems encourage sociopaths in to them, become inherently pathological by nature, function on paranoia and become unable to adapt.  

You don't adapt...you become extinct (eventually...maybe we will keep some central bankers and corporatist politicians in zoos but you get my point;-)

Fri, 04/03/2015 - 14:00 | 5956435 Consuelo
Consuelo's picture

You want a job?   You want to eat?   You will transact within the boundaries that we set and that your fellow idiocracy-citizens will gladly rat you out for if you don't.

 

 

Fri, 04/03/2015 - 14:07 | 5956460 Axtrax
Axtrax's picture

The writer of this post seems NOT to understand how these money transfers actually work.

These new fangled methods of transferring money are really just messaging mechanisms for customers to communicate an ACH should be performed from their account at their financial institution to someone else's account at another financial institution.  You can embed the functionality in a website or a mobile app that interfaces through a lot of middleware with the messaging system and then the back office operations are performed as per usual except they now have another channel they are receiving money movement requests from.

Ta Da!  Banks doing what they are supposed to be doing for their customers continue to live.  Just in an extended way that is more convenient. The wrinkle is you pay fees based on how fast you want it to happen.

Fri, 04/03/2015 - 14:10 | 5956473 fremannx
fremannx's picture

The Creature from Jekyll Island is on the way to self-destruction. It's just a matter of time now...

 

http://www.globaldeflationnews.com/the-creature-from-jekyll-island-the-e...

Fri, 04/03/2015 - 14:10 | 5956474 lesterbegood
lesterbegood's picture

It appears to me that human energy underwrites the currency used on this planet. We are the Value. We are the creditors, although we are treated as debtors. If each one of us, individually and collectively regains control of our own Value, we can also issue our own currency?

Sat, 04/04/2015 - 08:10 | 5958286 doctor10
doctor10's picture

You are absolutely right, in that the banks see each of us as a "battery" to be drained. The fighting all around us is to control where we each drain our energy into.

 

7 billiion humans, encumbered by 700 triliion of notional derivative obligations is an assessment of what they think each of us is "worth"

Fri, 04/03/2015 - 14:10 | 5956478 NoWayJose
NoWayJose's picture

We have already moved a lot from a cashless society - but ultimately the 'magic pay' card has to be linked to an account somewhere - into which money enters and is removed. And unless you are in the 1%, you wil likely need some type of loan in the future, and who will be giving you that?

The only way to get rid of little banks would be for the gubmint to take over all the accounts and take over all borrowing. The benefit to the gubmint would be tracking and control - but that would also mean they would suffer losses for bad loans. I don't see it happening.

Fri, 04/03/2015 - 14:12 | 5956481 css1971
css1971's picture

Bollocks.

Banks create money. No other organisations are allowed to do this.

Fri, 04/03/2015 - 14:16 | 5956503 Chuck Knoblauch
Chuck Knoblauch's picture

They make loans that you promise to repay.

It's the First Comandment in banking terminology.

Fri, 04/03/2015 - 14:14 | 5956485 NoWayJose
NoWayJose's picture

Actually I could believe that banks will be obsolete in 10 years. After the collapse, workers will want to be paid in silver, and all merchants will want the same from their customers. And after losing all their electronic money and bank deposits during the great collapse and bank failures, no one will trust their money to banks any longer.

Fri, 04/03/2015 - 15:31 | 5956712 daveO
daveO's picture

The loss of e-money will be blamed on someone (maybe Iran) detonating a nuke nearby or cyber attacks. They've run these stories so many times in the MSM, I'd bet on it. It's like how they capitalized off of the first failed world trade tower bombings in Feb. '93, one month after Clinton was sworn in(how convenient!). Notice, that the second attack didn't take place until 9/11/01, 8 months after Bush 2 was sworn in. They wanted to wait until 9/11, to imbed it in people's minds. So, just guessing, why not have 'Iran' detonate one(or 'Chinese' cyber attack) on tax day 2016. Maybe someone can think of a more appropriate date that I'm overlooking(July 4th?). Either way, the timing of the next 'black swan', within the first year of the next presidency, is almost assured. 

For the naysayers;

http://en.wikipedia.org/wiki/Operation_Northwoods

Fri, 04/03/2015 - 14:33 | 5956490 sapioplex
sapioplex's picture

It isn't just banking...I predict politicians and many other archaic power structures will start to become obsolete very soon.  For more information on how this seemingly impossible idea may be possible, see here:  http://sapiocracy.com/

Fri, 04/03/2015 - 14:16 | 5956498 A Lunatic
A Lunatic's picture

Bullshit. There will be one giant Bank of Mordor, surrounded by moats, drones, and robots programmed to kill anything within a five mile radius of the place......

Fri, 04/03/2015 - 14:17 | 5956508 Chuck Knoblauch
Chuck Knoblauch's picture

Sounds like any Fed Bank.

Fri, 04/03/2015 - 14:22 | 5956532 darteaus
darteaus's picture

Yes!  And you can store youre firearms in neighborhood armories!

And real property will be obsolete too!

Hey, you're now a serf!

Fri, 04/03/2015 - 14:34 | 5956573 Kirk2NCC1701
Kirk2NCC1701's picture

"...And The Good News: Banks Will Be Obsolete Within 10 Years"

Moneychangers have been around for HOW long? Thousands of years. They've outlasted empires and gods.

We may see a return to Analog Money (PM or PM-backed currency), as well as Digital Money (digital fiat, crypo-currencies).

I'd like to see things like MEFO Bills coming back into use.
https://en.wikipedia.org/wiki/Mefo_bills.

Perhaps even Oeffa Bills
https://en.wikipedia.org/wiki/Oeffa_bills

Guys like Gottfried Feder come along, to eliminate Usury-based money, but even Adolf had him eliminated (Night of the Long Knives), since he kept FRB.
https://realcurrencies.wordpress.com/2014/01/21/hitlers-finances-schacht...

I'd like to see a country arrest a Redshield guy, like Germany did:
https://realcurrencies.files.wordpress.com/2014/01/louis.jpg

Here is some useful info on Hjalmar Schlacht:
http://www.fourhourday.org/content/docs/Hjalmar%20Schacht.pdf
HORACE GREELEY HJALMAR SCHACHT (And the Magical Mystery MEFO Bill)

And here is the PDF of his book "The Magic of Money"
http://www.autentopia.se/blogg/wp-content/uploads/2013/09/schacht_the_ma...

Neither violence nor power of the purse
Fashion the universe.
Ethical action, spiritual force
May reshape the world’s course

p.s. Whenever Simon calls a place or thing "Paradise", the US.gov isn't far behind, to nix it. It's like he's their Useful Tool, w/o intending to be. In effect, he's waving a red flag, shouting: "Look here, everybody, here's a great new Opportunity!" In so doing the US.gov is right there, along with others, to "seize" the Opportunity.

Fri, 04/03/2015 - 14:33 | 5956584 Jack Daniels Esq
Jack Daniels Esq's picture

Promise to hang all the Musk Bitchez + Yellen

Fri, 04/03/2015 - 14:37 | 5956590 reader2010
reader2010's picture

The world runs on credit aka creation of money. How does an average Joe get credit to buy a house, start a billion dollar venture and finance a war using your glorified digital technology? 

Fri, 04/03/2015 - 14:40 | 5956606 ZZR600
ZZR600's picture

Try www.ratesetter.com and www.zopa.com for P2P savings. The problem is P2P is equivalent to 100% reserve banking, i.e., not money created via loans, so highly deflationary if adopted on a large scale. Can't see vested interest allowing this

Fri, 04/03/2015 - 14:46 | 5956629 Pumpkin
Pumpkin's picture

A lot of things will be obsolete after WWIII.

Fri, 04/03/2015 - 14:49 | 5956640 Xscream
Xscream's picture

I worked for Sun Trust..    Think i am going to hell for it.  MY sin was trying to tell people my .79 apr was such a good deal. Two types of depositors ..... either they had many fat accounts, or they wanted to know if they could get 20 bucks out. Got commision if was able to refer big accounts to the brokers. 

Fri, 04/03/2015 - 14:56 | 5956665 My Days Are Get...
My Days Are Getting Fewer's picture

This is not a joke.

I just saw this charge posted to my checking account:

 

CASH DEPOSITED FEE       ------------------------------   $1.50

Thank you Warren.

Moving out of bank and under mattress

 

 

Fri, 04/03/2015 - 14:59 | 5956673 Bastiat
Bastiat's picture

Which bank?

Fri, 04/03/2015 - 15:32 | 5956754 My Days Are Get...
My Days Are Getting Fewer's picture

Warren knows

Fri, 04/03/2015 - 16:33 | 5956935 Kprime
Kprime's picture

google "cash deposit fees"  you are going to be stunned.

Fri, 04/03/2015 - 15:06 | 5956692 Xscream
Xscream's picture

They dont want you to use the tellers for anything, That job will be toast soon also. It pays about 10 bucks a hour around here. Must cut cost. 

Fri, 04/03/2015 - 15:06 | 5956695 shouldvekilledthem
shouldvekilledthem's picture

I bet zh authors are mostly old.

It's open source revolution not digital.

No mention of bitcoin...this site just reached a new low.

Fri, 04/03/2015 - 16:01 | 5956825 Bear
Bear's picture

Yea ... I've got this open source money repository

Fri, 04/03/2015 - 16:34 | 5956936 OscarMayerAmsch...
OscarMayerAmschelRothschild's picture

You are so right.

Fri, 04/03/2015 - 15:14 | 5956709 lexluthor19
lexluthor19's picture

Did Jefferson say this before or after he raped his dead wife's half sister and enslaved his own kids? 

Fri, 04/03/2015 - 15:20 | 5956717 mastersnark
mastersnark's picture

If this true, where will I keep all my Federal Reserve Notes?!?!!?!?

Fri, 04/03/2015 - 15:48 | 5956787 falak pema
falak pema's picture

Yeah! My dream for future is that TBTF Banks, Oil majors and MIIC conglomerates as their crony masters in Congress, all become obsolete in the coming years.

As a student of History I know this is a pipe-dream; but dreams are what the future is made of! 

When dreams become reality... and we believe that pursuit of happiness is transmittable from generation to next; only to have another despot cross the next Rubicon and the dream turns to nightmare! 

Back to the salt mines is all that is left! 

Fri, 04/03/2015 - 15:59 | 5956817 Bear
Bear's picture

Oil majors? Should we eliminate oil and coal? Well just what is going to power our ZH blogging?

Do NOT follow this link or you will be banned from the site!