Bitcoin, will it ever be a legitimate currency?

[C4Cat]

I don't think you understand the role of banks in an economy.

Banks buy and sell currency, and if bitcoin is a currency, they will be buying and selling it.

We were talking about a hypothetical future in which crypto-currencies are the norm. You don't need a bank to trade crypto-currencies like bitcoin. You only need the bank if you are dealing with money as we know it today

 

[saturnz]

We were talking about a hypothetical future in which crypto-currencies are the norm. You don't need a bank to trade crypto-currencies like bitcoin. You only need the bank if you are dealing with money as we know it today

so how will you get a mortgage? which is essentially other people's savings given to you for a period.

 

[C4Cat]

so how will you get a mortgage? which is essentially other people's savings given to you for a period.

I did clarify in the post above that there will still be a place for loans, investment, processing transactions and that sort of thing.But you will no longer need a bank for day to day transacting and can save, transact and invest without a bank account.
Any company can issue loans, etc and setup a sort of peer / community based system something like Rainfin without needing a bank.

 

[saturnz]

I did clarify in the post above that there will still be a place for loans, investment, processing transactions and that sort of thing.But you will no longer need a bank for day to day transacting and can save, transact and invest without a bank account.
Any company can issue loans, etc and setup a sort of peer / community based system something like Rainfin without needing a bank.

you need currency from somewhere in order to lend to others

how will this work exactly, where will a company get currency in order to lend to others for 10-20 years?

economies work on credit and its not exactly clear how bitcoin will faciliate this

your post did not clarify how bitcoin will replace the lending capacity banks have, a community based system is laughable since you are expecting people to co-operate in a competitive free market system.

 

[C4Cat]

you need currency from somewhere in order to lend to others

how will this work exactly, where will a company get currency in order to lend to others for 10-20 years?

economies work on credit and its not exactly clear how bitcoin will faciliate this

your post did not clarify how bitcoin will replace the lending capacity banks have, a community based system is laughable since you are expecting people to co-operate in a competitive free market system.

Which part of "there will still be a place for loans, investment, processing transactions and that sort of thing" did you not understand?
Which part of "you will no longer need a bank for day to day transacting and can save, transact and invest without a bank account" did you not understand?.
Which part of "You don't need a bank to trade crypto-currencies" do you not understand?
Which part of "Banks will become less necessary than they are now and will have far less control than they do now." do you not understand.

Perhaps I was a bit optimistic to say "crypto-currencies make banks redundant" but they certainly make banks redundant for day to day transacting, for sending money overseas, for purchasing online, purchasing from shops, savings, investments, etc. In a world of crypto-currencies the bank would be a different beast, much less control, much less power. I don't know how loans would work because if I wasn't taking out a loan, why would I want a bank account?

 

[Pitbull]

you need currency from somewhere in order to lend to others

how will this work exactly, where will a company get currency in order to lend to others for 10-20 years?

economies work on credit and its not exactly clear how bitcoin will faciliate this

your post did not clarify how bitcoin will replace the lending capacity banks have, a community based system is laughable since you are expecting people to co-operate in a competitive free market system.

With the amount of private financiers currently. Banks are becoming obsolete. You can buy a house without a bank even being remotely involved. You can buy a car without a bank being even remotely involved. A lot of private investors have companies that run their money on investments like buying houses/cars and the likes.

 

[saturnz]

I see many have not done economics 101.

Banks allocate savings to investors, thats what they do.

 

[C4Cat]

I see many have not done economics 101.

Banks allocate savings to investors, thats what they do.

What's your point?

 

[saturnz]

What's your point?

did you study economics, can I see your qualifications

I'm not going to speak to someone who has no idea how an economy works.

 

[C4Cat]

did you study economics, can I see your qualifications

I'm not going to speak to someone who has no idea how an economy works.

What, because I asked what point you're trying to make?
You engaged with me so don't get all sulky now because I asked you a question.
If you don't want to speak to me then don't respond to my posts in the first place, it's that simple.

 

[Jehosefat]

Which part of "there will still be a place for loans, investment, processing transactions and that sort of thing" did you not understand?

Perhaps I was a bit optimistic to say "crypto-currencies make banks redundant" but they certainly make banks redundant for day to day transacting, for sending money overseas, for purchasing online, purchasing from shops, savings, investments, etc. In a world of crypto-currencies the bank would be a different beast, much less control, much less power. I don't know how loans would work because if I wasn't taking out a loan, why would I want a bank account?

If no one has money in a savings account / current account / investment / any other sort of bank deposit, the bank has no money to lend out. So no, there will not be a place for banks making loans in your view of the future.

With the amount of private financiers currently. Banks are becoming obsolete. You can buy a house without a bank even being remotely involved. You can buy a car without a bank being even remotely involved. A lot of private investors have companies that run their money on investments like buying houses/cars and the likes.

Not so much. Banks have loaned out somewhere around R6 trillion in South Africa and have to manage all the risks that this entails. I'm not convinced that private individuals have the appetite to tie their money up for 20 years in homeloans to people, some of whom will not pay them back. At least not on the scale that banks do it.

 

[saturnz]

What, because I asked what point you're trying to make?
You engaged with me so don't get all sulky now because I asked you a question.
If you don't want to speak to me then don't respond to my posts in the first place, it's that simple.

you are talking as if you are an expert, you are clearly not

 

[saturnz]

If no one has money in a savings account / current account / investment / any other sort of bank deposit, the bank has no money to lend out. So no, there will not be a place for banks making loans in your view of the future.

effectively making the savings a leak without the injection via investment

 

[Pitbull]

If no one has money in a savings account / current account / investment / any other sort of bank deposit, the bank has no money to lend out. So no, there will not be a place for banks making loans in your view of the future.



Not so much. Banks have loaned out somewhere around R6 trillion in South Africa and have to manage all the risks that this entails. I'm not convinced that private individuals have the appetite to tie their money up for 20 years in homeloans to people, some of whom will not pay them back. At least not on the scale that banks do it.

I actually have an investment in a company that does the following:

You select a house you want to "buy" which beats renting. You sign a 5 year contract. The company buys the house and then you the "buyer" only pay the interest on the capital amount for the next 5 years. Say 12%.

So you will pay R 10 000 a month on a R 1mil loan for 5 years. After five years you have the option to get alternative finance, re do the 5 years with the company or sell the place and everything above the capital amount is yours as the "buyer"

These bridges a couple of hurdles to new home owners:

1. Blacklisted people are welcome - They have 5 years to clear their name and then buy the property for the initial R 1mil after 5 years, so no increase in the loan amount as the property value will increase you still buy it for a price of 5 years ago
2. Companies do this for long term projects in areas like Kathu. Their staff are then accommodated for 5 years without having to foot the capital.

This is to list but a few benefits, there are plenty.

For me as an investor:
1. Guaranteed 12% interest
2. Investment term is 5 years
3. The company carries the risk of having to sell the place if the "buyer" defaults and all profits made from the sale goes to the company.

You will be amazed at the opportunities available to private investors if you keep your ears on the ground. Banks are losing the race as more and more people become financially knowledgeable. The days of just putting your money in the bank and living off the promised 8% or whatever is long gone en people are getting smarter

 

[saturnz]

the place if the "buyer" defaults and all profits made from the sale goes to the company.

You will be amazed at the opportunities available to private investors if you keep your ears on the ground. Banks are losing the race as more and more people become financially knowledgeable. The days of just putting your money in the bank and living off the promised 8% or whatever is long gone en people are getting smarter

you still haven't addressed what happens to savings and how they are injected back into the economy

 

[Pitbull]

you still haven't addressed what happens to savings and how they are injected back into the economy

I'm not part of your discussion with C4Cat right?

I'm talking from an alternative to banking institutions which seems to be a growing trend and more and more financially sound and informed individuals doing other things with their savings instead of letting it sit in a bank already as it is.

 

[Jehosefat]

Lending to people with no regard for their ability to repay the loan "because the property value will increase and cover us so we won't lose anything" is EXACTLY the thinking that caused the sub-prime crisis in 2007/2008. (Most people who are blacklisted are on the list because they are not good at managing money/paying back what they owe so why do you think they will suddenly be able to sort it out now?)

 

[C4Cat]

I'm not part of your discussion with C4Cat right?

I'm talking from an alternative to banking institutions which seems to be a growing trend and more and more financially sound and informed individuals doing other things with their savings instead of letting it sit in a bank already as it is.

Pitbull, did you study economics, better show your qualifications to saturnz, he's not going to speak to someone who has no idea how an economy works and, apparently, without a qualification in economics, that includes most of us.

 

[Pitbull]

Lending to people with no regard for their ability to repay the loan "because the property value will increase and cover us so we won't lose anything" is EXACTLY the thinking that caused the sub-prime crisis in 2007/2008. (Most people who are blacklisted are on the list because they are not good at managing money/paying back what they owe so why do you think they will suddenly be able to sort it out now?)

I gave you a perfect example of what the alternatives are to normal banking. This investment company does not just cater for blacklisted clientele. That's beside the point though, if there is a market that help both buyer and seller and everyone is happy why would I complain?

 

[Pitbull]

Pitbull, did you study economics, better show your qualifications to saturnz, he's not going to speak to someone who has no idea how an economy works and, apparently, without a qualification in economics, that includes most of us.

Not economics, but I do have a Bcom in finance and also did a wealth management NQF5 course through Damelin which I passed with flying colours for personal financial knowledge. Not claiming to have studied economics because economics doesn't phase me. Money in my account does.