But there’s something people ignore: banks are way more than money warehouses. They’re relationship engines, trust brokers, infrastructure layers for the boring stuff (mortgages, compliance, interbank settlements). Crypto doesn’t want that job. Most people don’t even want that job; it’s too much friction for the average user, and most don’t want to become their own bank and risk a wrong click wiping out a life’s savings.
Yep. The basic task of banks is to evaluate risks. From the risk a John Doe constitutes if he wants to build his house with a loan, but has no stable income, to the risk of the business model of multi billion companies.
This task will be still needed even if fiat completely disappears and we pay for everything with Bitcoin. There will be always someone needing a loan, and someone who has to evaluate if their income and properties are enough to work as a collateral.
Banks have the most expertise with that, so they will have a competitive advantage, as long as they adapt to that scenario. But even if traditional banks should collapse because they don't adapt, there would be someone doing that task, and these entities would continue to be "banks".
And no, DeFi loans are not the same thing, as you have to deposit crypto collaterals. Someone building a house or starting a company won't be able to do that. Only ICOs have some merit here, because they can work for companies, but for the "house builder" they're also not adequate.
Nice try. Control of the market price of Bitcoin, does not give you any power over Bitcoin.
Fortunately in the crypto world we have a big precedent and that's supporting what BenCodie wrote: the ETH <-> ETC hardfork. This one is showing us how a big ownership stake in a cryptocurrency can influence development.
The Ethereum team used their ownership of ETH to keep ETC small. There were perhaps also other factors in play, but in the case of a hard fork, it is important that the own fork becomes the most valued one, and that's where big holders which are able to control the price come into play.
We have also a precedent how such an attack can be repelled: with education of the users and being clear about the values and characteristics of the protocol that should be preserved. BCH tried to attack Bitcoin when they forked away due to the Segwit war in 2017, and they even managed to get close in valuation at one point due to probably heavy market manipulation. But the Bitcoiners were stronger.
That's also why for me it's very important to talk about these values and that users should know what the Bitcoin protocol really wants to achieve. Take censorship resistance. If a bank acquires a lot of BTC and tries to prevent a privacy feature being introduced threatening a hardfork, the original Bitcoin will only stay "Bitcoin" if the users really ignore the attack and don't switch to the no-privacy hardfork.