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by divenorth 3239 days ago
The more that I think about banks the more I realize they are no longer relevant. Why do I need to pay a "bank" to keep my money that is simply stored as a digital record? Seems absurd once you stop and think about it.
4 comments

That's the thing. You don't pay the bank, the bank pays you. Otherwise no one would have bothered.
except when you practically remove cash and introduce negative interest rates, like it's tried in few countries already (Sweden)
Not absurd at all. Consider all the cases when someone steals your money from your computer or from the exchange. Or when people send ethereum by typing in the address and losing money. Someone did this with five figures of USD worth. And that's just those that we hear about.

Theory is nice but practice is even nicer.

Cryptocurrencies are for when we want to be responsible for our selves. I don't think either extreme (banks vs crypto) works for all cases. I just want the choice.
I always understood that Bitcoin have appealed to the Ayn Rand followers. But what Ayn Rand have advocated for is selfishness and not a society. You can dress that as "be responsible for our selves" but in this case, much as with a lot of cases, spreading out the cost of building and operating a secure system across many people have proven to work much better than individuals doing the same.
To provide a concrete example, I use Bitcoin where I don't trust a provider to not charge me again in the future.

Some banks give you some tools to protect against this case like generating debit card numbers with an exact balance on it. But Bitcoin generalizes over the case.

Your comment is the sort of all-or-nothing mentality that I don't understand. I look at banking institutions vs cryptocurrencies as different options just like credit cards vs cash: I want to be able to choose, and I don't want to be limited to one single solution.

It's kinda of like the decision between an iPad vs a techie's laptop. I think the most common cases (e.g. my parents' needs) are best served by an iPad or a banking institution, but it's dangerous when someone begins telling me that I don't need such a powerful laptop.

All too often I see cryptocurrencies dismissed with the condescending implication that nobody is capable of evaluating the trade-offs.

I would love to not have to use a bank.
You still need to keep your cryptocurrency private keys secured - a bank can provide that service, while also loaning out your capital and paying you back interest. Banks do more than just hoard capital.

Another advantage is government-insurance of savings.

The interest isn't enough to cover the costs of inflation.
The primary purpose of banks in our society is not storing money, but lending it out.
Of course. But then why am I paying bank fees for a checking account? And savings accounts don't even pay enough interest to cover inflation.
Have you bothered to read the requirements for waving the bank fees? And if you are concerned with beating inflation, you are supposed to look into, at the very least, bonds or something similar.

Savings accounts are more suited for money you will need at any moment.

Of course I have. I need to keep $3000+ in my checking account. Either way I'm paying for the account either by lending them the $3000 or by a $15 a month fee. Either way I lose out especially since I don't think I'm getting any value from my bank. I'm planning on switching banks.

I have some money in other investments but I just think banks are a rip off.

And creating it in a regulated way (this is very important for controlling the money supply and thus the economy).