Quote from: Ifra24 on April 25, 2020, 11:15:13 AM

Quote from: btcpepa04 on February 08, 2020, 12:43:58 AM

Hello! What's your opinion could BTC kill banking system? Bitcoin has an advantage over fiatbecause its amount is limited and it can't fall under inflation.Inflation usually is caused by monetary policies of our central banks. Bitcoin is free from inflation, governement control and high transaction fees.Banks cant control BTC because it has no representative and is fully decentralized. That's why banks are afraid of BTC.

This is natural, because all countries system must have a central bank. The Central Bank institution that is responsible for maintaining the stability of prices of goods and services, as well as the exchange rate of a currency that applies in a country. If BTC is legalized and become a means of payment this will be difficult. Because the central bank cannot control. If it is legalized and regulated by an institution, the original nature of BTC is not decentralized. Moreover, the use of Bitcoin as a means of payment will collide with the scalability problem. So bank institutions in a country need to regulate issues regarding the legality of BTC.

This is not true, many countries do not intervene in the economy (are more liberal) and the real purpose of a Central Bank is to serve as a Bank for banks. They don't have to dictate monetary policy even if that's typical in many countries. A good example would be the role of a central bank in a country without a national currency.

And all of this is related to fractional reserve. If you don't understand fractional reserve, you just cannot understand why there are so many banks. And if you DID understand fractional reserve, you wouldn't be using banks in the first place.

The end result of the existence of Bitcoin. is that banks will need to shrink. There are just too many of them and they are redundant. They can shrink slowly, product of the natural disuse of them, or rapidly should the people of the world suddenly decided to withdraw their money which cannot occur under fractional reserve rules; your money is simply not there and most people remain ignorant of this.

With Bitcoin every coin is accounted for, you cannot do vapor money like banks do with fractional reserve. A bank can only work with Bitcoin with a full reserve, and that means you have to pay them to keep your money rather than the other way around (think bank vault). The Bank of Amsterdam used to work like this a century ago, such type of bank can never go bankrupt but makes far less money than the other banks doing the legalized ponzi scheme. In a similar fashion the Chicago school of economy needs the whole credit expansion system that this fake money provides. You will never understand Bitcoin place in the world without the Austrian school of economy where you grow slowly by saving, not quickly by getting in debt.

And yes, money that keeps its value overtime makes people save more, and you don't need a bank for that anymore.