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May 21, 2016, 08:37:48 PM |
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Bitcoin will flatly refuse to become what banks need, which correctly represents the desire of its community.
Therefore banks will use a different block chain, with additional transaction types, that does the things they need. It's that simple.
You pretty much can't create money by loaning at fractional reserve in Bitcoin. (Mark Karpeles managed it, but he lied about the risk, and there's three different countries lined up to put him in jail for fraud.) And that is what banks do. Further, that is what people RELY on banks to do. Harold and Harriet go down to the bank to borrow money when they need a new car or when they're buying a house, and they WANT to be loaned money, and they want a low interest rate, and they can get the best interest rates at a place that makes loans on fractional reserves, because having that leverage means banks can meet operating expenses.
Furthermore, governments rely on banks to loan at fractional reserve because adjusting the reserve rate is their goto method for regulating money supply.
Now, most Bitcoiners regard no loaning at fractional reserve and no government regulating the money supply as good things, and therefore Bitcoin will never do it.
But if banks can't do it with bitcoin, they'll just do something else besides Bitcoin, and they'll survive just fine because they'll provide services Bitcoin won't.
Likewise, banks want to be dealing in money that police can trace and courts can recover. If they get ripped off, they want to be able to sue the bastard who did it, have their assets frozen until the case is settled, and get their money back. It lowers their operating expenses and there's an existing legal framework that does it. Harold and Harriet want the ability to stop payment if a vendor sells them a network cord that doesn't work. Banks want to be able to sell mortgaged assets if it turns out that Harold and Harriet default on their mortgage.
And once again, if they can't do that with Bitcoin, they'll do it with something that isn't Bitcoin. And they'll prefer that other thing over bitcoin.
Because bitcoin will never do these things, and both Government and Bankers see great value in an open central ledger (because quite correctly none of them trust the others), they will create an open ledger, using block chain technology, that has little or nothing to do with Bitcoin.
That open ledger will support transactions like courts freezing assets, police recovering assets, loans at fractional reserve, txOuts destroyed as bad debt, transactions spending the money of people who don't divulge their keys as a result of court judgments, etc. Block chain technology can do all of these things; you just record a transaction and the nodes check that it falls within whatever rules they check.
If Bitcoin doesn't add these transaction types to its block chain, and it most emphatically won't, then banks will just make their own block chain and ignore Bitcoin.
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