[thevardanian]

I really don't understand why people don't get the idea of "digital native".

Just because verbal agreements worked for thousands of years doesn't make written contracts pointless.

Similarly the banking industry technically does "online banking" but they still have to process each transaction through archaic practices that mimic physical transactions.

[buzzdenver]

Sorry, I'm not following how what you posted related to my comment.

[rglullis]

Let me take a crack at interpreting it: your comment of "crypto is meant for decentralization, lots of people use exchanges, exchanges are centralized like banks, ergo crypto is just as bad as the legacy financial system" presents a false dichotomy.

Crypto adoption does not need to be a binary decision, and crypto enthusiasts are not hypocrites if they still have a bank account or if they still use exchanges when it suits them.

The important thing about crypto is optionality. Crypto/web3 gives us the option (but not the obligation) of managing our own wealth. This is something that "digital natives" understand better than old timers.

[andsoitis]

> Crypto/web3 gives us the option (but not the obligation) of managing our own wealth. This is something that "digital natives" understand better than old timers.

Before crypto/web3 one couldn't manage one's own wealth? C'mon.

[rglullis]

Simple exercise: go to your bank today and try to withdraw $100k.

Alternatively: go apply for a mortgage if you have 80% for a down payment, a way to prove the legitimacy of the funds, but little-to-no credit history.

[majormajor]

Why would a lender want to do any less due diligence if your downpayment was in crypto vs cash or gold or bonds or similar?

[rglullis]

Because the risk of default (assuming contracts used are correct and safe) is smaller or zero

[puranjay]

Try to get a loan in crypto with 80% collateral and then we can talk

Crypto “loans” are just loans against existing assets and are all collateralized heavily - 150% is the standard.

There is still absolutely no way to get a real loan with crypto so far - one where you actually borrow more than you have.

[rglullis]

There are two separate things here: one is the ability to manage your own assets, the other the ability to enter in a contract.

I am talking about only the first one. The problems with banks is that they are intermediaries between you and your money.

> Try to get a loan in crypto with 80% collateral and then we can talk

First: a mortgage is overcollaterized. A bank will take the whole house from you if you default, not just what is due. They are taking your downpayment and effectively keeping control over the property.

Second: that is not even the point. The point is that a bank will not give you a mortgage even if you are good for it. Why, because they don't have proper systems in place to assess risk?

Yeah, sure, undercollaterized loans require a system that both parties can agree on and that can solved in case of breach of aggreement. IOW, it is not a trustless system. So it would not happen on the blockchain.

But you know what could happen on the blockchain? I could make a loan with someone I know using the current institutions, add that to my funds to get a overcollaterized loan and then I still don't need a bank. To go back to my first comment on this thread, adoption of crypto does not imply an all-or-nothing approach.

I can be a "web3 enthusiast" and still make use of the current institutions when they suit me. It's the increased optionality that interests me.

[neatze]

You will have no problem withdrawing 100K, and substantially more, depending on branch you might need to call ahead of time, a many years ago there was poker night somewhere on wall street with 600K cash bonus, yep actual cash in office on table.

[rglullis]

Ok bigshot, you are missing the forest for the tree. Try doing the same on the equivalent amount with a bank from Brazil or Greece.

[buzzdenver]

Things might have changed since I bought property a few years ago, but back then I just took a screenshot of my bank account and tried to keep a straight face when giving it to my realtor.

[buzzdenver]

Gotcha. You have the option to manage your own NFT-s or BTC, but if 99% of the users are accessing the ecosystem thru centralized actors, then sooner than later you'll have issues interacting with those users. Think running your own mail server and trying to send an email to a friend on Gmail. Coinbase might put a hold on the BTC you send to a friend because it was coming from an untrusted source. We are back to web2.

[rglullis]

No, you missed the point. There is no divide between "those using an exchange" and "those using their own wallet". No one is forced to exclusively use one or other.

The divide is along the line of "how much of each individual's portfolio is on a CEX?". I can have 10% of my crypto holdings (for occasional trading or on/off ramping) on an exchange and the rest on my own wallet (for DeFI).

You can not do that on a bank. If you think a bank is in trouble, you can only move your funds to another bank. If one exchange starts acting up, its users will learn how to move more to their own wallet. It is not a random example: go to /r/loopringorg and see all the screenshots of the people who finally learn how to use the Loopring protocol/wallet and taking their holdings from Coinbase. Now imagine if there were rumors that an exchange would start unilaterally trying to control what users could do? They would lose their customers. They are centralized, but the balance of power is in favor of the us users because we have options.

[majormajor]

"If you think a bank is in trouble, you can only move your funds to another bank."

or to land, or to gold, or to stocks, or to bonds, or to foreign assets, or to cash, or to guns, or to Pokemon cards... all sorts of "not in a bank" options are available. Banks have competition with not just other banks but the whole financial ecosystem. And if a government is after you, some of those are actually harder to trace than crypto.

[rglullis]

Your first five items are simply not available for poorer people. It's basically "let them eat cake".

Holding cash can lead a whole community to what happened in India.

Guns are not liquid.

Pokemon cards are easy to be counterfeit.