Capital Mobility Keeps The System Efficient
Hey Jessavers
Many people still think banking works on a time deposit basis, that we as savers place our capital in the bank and then banks go out looking for viable ways to deploy that capital and then share the returns with savers. This couldn't be further from the truth, and in today's banking world, fractional reserve banking allows for IOU's to be used instead of money.
The capital you provide is used for business expenses; you get an IOU, they know you'll never pull out or know the vast majority won't take out, so they have enough float to cover it.
The banks then use products like loans and credit cards to create new money out of nowhere and then expect consumers to pay it back with an interest rate they use to fund their whole process and repeat this over and over again.
In years gone by it was still a limit on how leveraged banks could be with physical cash, but we continue towards a fully a cashless society those limits are now long gone.
No bank run, means banks run us
Since we don't have the ability to pull off a bank run well, we still sort of do, in a way. Still, very few people have the motivation to do so. They've been able to offer us lower and lower interest rates, more fees, shittier service, even negative interest rates, and consumers still stick with them.
We don't have the ability to manage our own money in modern times; we have to use 3rd party services, and without this ability to pull your capital from the system. It means banks can continue to operate inefficiently and focus on their profits over anything else.
Custody your assets
In Bitcoin, we have a bearer asset that's solely information based, that the market values and you can easily custody yourself. It takes properties of cash, gold and other forms of money we've had in the past and given us the best of all of it.
Having the unique ability to pull your purchasing power from a company, project, exchange, fintech service means they need to treat you well or you're going to move somewhere else.
Self custody puts the power back in the consumer's hands; they can dictate the terms. The service provider needs to attract their capital by offering superior services the competition or better rates of return.
I don't think the penny has fully dropped yet on this one and people are still very much happy to use custodial services and those that don't shop around to look for the best deals.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
Let's connect
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Posted Using LeoFinance Beta
With Government backstopping the banks, who needs competition? Brrrrrr!
Posted Using LeoFinance Beta
Indeed, so you can always continue to steal from the collective savings and productivity of workers. I wouldn't expect anything less from bankers and politicians who never had to work a day in their lives
I don't see the essence of keeping money ideal. I believe money is an active living thing that needs to stay active to procreate (make more money). I would rather have my money invested in something that regularly generates passive income. The bankers are not your friend. Their most appealing feature is safety isn't as appealing anymore as there are more saver ways to hold value(crypto), which gives the owner of the supposed funds more control over his/her. money
Posted Using LeoFinance Beta
It's a good rule to look for income-generating assets but in today's climate it's harder and harder and many people are actually stuck in negative return assets but are fooled by the nominal returns. Cash is also important so you don't have to tap into your investments and let them grow uninterrupted or adjust positions without having to take hits because you're timing is bad trying to sell an illiquid asset
As people are getting aware of things like custodian wallets etc, these new service/systems are definitely going to give some tough competition to banks. This may take some time but for sure it will in the future, specially when everyone is so tech savvy 🙂🙂
I do hope that we eventually get there and people take responsibility for their own money and their own freedoms!
I'm not saying banks need to go out of business but the bad ones do and those that want to stay in business need to offer us valuable services!
Hopefully we eventually find the balance like having some capital you keep yourself and others you use fintech and banking
I can't wait to see how controlled CBDC's will be, hungry banks are going to step up their hunger games
Posted Using LeoFinance Beta
That's going to be an interesting tool to throw in the mix, I think China will do it first they seem miles ahead of everyone else on the subject, but who knows? I don't think I want to live in a country that has a CBDC if I can help it
Lol imagine giving banks the access to know "how" "when" "where" and on what each dollar is spent from your account,.......its scary
LoL fuck that, I'll much rather deal with satoshis or give out hand jobs to pay for what I need
Business plan has been studied already i see 😁
Posted Using LeoFinance Beta
LOL I don't need competition, let me have my bowl of rice please sir
Well I don’t want to share all my data with them either... share some lube mate haha
Posted Using LeoFinance Beta
Credit cards are the trap and indirect loan to the customer.. the this is also reponsible for over purchasing... ita a master plan by banks..
Absolutely, sell you the most expensive form of money around so you can be a wage slave and pay for something they print up out of thin air, its such a scam
Posted Using LeoFinance Beta
this is a Complete Block chain
Posted Using LeoFinance Beta
Personally, I don't think so, if it was I would expect a close loop on things like eCommerce, not much I can do with my HIVE commercially bar dumping it for BTC to buy something. Very few people are turning over the HIVE in circulation to drive more productivity and to me, that's a failure for any economy. Yes i know its still a small community but without outlets and sinks for the token, it's pretty much incomplete
Posted Using LeoFinance Beta
yeah you are right
This is the way for banks to earn some money. I think loans and credit cards are good if used wisely. We should not use it as free money and credit card is good and bad both depending upon how you use it.
Posted Using LeoFinance Beta
I think they are good products too, consumers are sure taking out more than they can afford and banks aren't exactly curbing it, its a problem with the incentive structure on both ends
!ENGAGE 20
ENGAGEtokens.Banks as we know them are going to reinvent themselves or disappear.
Even people who still “like” 3rd party custody will find better services/rates in those crypto.com, NEXO, Celsius, etc.
Not even talking about the level up wallets + DeFi.
I can’t wait to see how they’re going to fall.
Posted Using LeoFinance Beta
I'm 100% with you on that, soon some of these shadow banking services will be bought up by banks since they can't innovate and most of these companies don't care about crypto they in it for a quick buck so they build the tech and sell it to the banks for a big payout and so it goes on
As for De-FI I'm still not convinced on it yet, I don't see how people are actively using the capital, it just looks like rehyphoticiation and then more speculation.
So far only liquidity pools make sense to me like Uniswap, and I hope that the lightning networks pool takes off too, other than that most of this De-fi is just gambling
Agree that all DeFi are not equal and some will likely blow up.
The next bear run will show the flaws with a magnifier.
Posted Using LeoFinance Beta
Couldn't have said it better. Having worked in a bank, i've seen those inefficiencies and wastage first hand. Banks are scared that tech is about to displace them.
Posted Using LeoFinance Beta
Oh wow really? So they are aware that things are changing and they aren't doing much to keep up? Do you think they will try to offer competing service or try to buy these crypto shadow banks once they are starting to take bigger market share?
DBS, our biggest bank here is looking at crypto to automate trade finance but the other banks have been pretty quiet. They're also doing their own crypto exchange but I don't see how they wi be better than any of the existing players.
https://twitter.com/shortsegments/status/1354739445711343616