Interestingly, the original bitcoin white-paper had a motivating example that basically amounted to side-stepping banks, because banks do not provide fully non-reversible transactions. In essence, bitcoin was a technological solution to a problem which would have been solved more elegantly by changing financial laws, and requiring banks to offer non-reversible transactions. (the problem with that is obviously that it could be used for fraud, but then you get into the whole debate about freedom vs protection)
Similar to what happened with voice communication, the financial infrastructure will suffer an inversion[1], the banking platforms will run on top of a global value-transfer protocol, instead of the other way around. What you describe at the end of your comment already exists, bitcoin exchanges are using a federated bitcoin sidechain[2] to transfer funds between themselves within their own consensus rules (they could implement reversals or any other feature without having to break the bitcoin consensus).
The whole point of Bitcoin was to form an alternative to banks so that they don’t become all powerful. If banks become better actors as a result, that’s good for Bitcoin.
So what you're saying is that banks are more stable because only a small portion of their assets are kept as reserve? In that case, what's stopping bitcoin "depositories" such as this converting the bulk of their assets to something else as well?
Bitcoin is not a bank, and does not replace banks.
There's nothing stopping anyone from setting up a bank that handles your bitcoin transactions, and therefore can reverse transactions between two parties.
Replace "Bitcoin" with "Dollar" and you see how strange your statement is.
Very astute points wrt the demand for banking services. Banking will always be with us.
Bitcoin has the advantage over fiat of having been designed with incentives of participants aligned so as to make the likelyhood of inflation extremely small over the long term. So the scenario that Bitcoin makes better is the one in which money printing would have occurred, but now can't because of recourse to Bitcoin.
The bitcoin industry has a long and chequered history when it comes to best practices.
Part of the appeal of bitcoin to many is "Banks are so unnecessarily expensive to transmit value", the bitcoin industry has slowly and painfully been learning one disaster after another that maybe some of that cost isn't unnecessary after all.
Even if you just rebuilt banks as they exist today on top of Bitcoin, you'd still get some pretty huge advantages, potentially massively increased security, speed, reduced costs, among others. Another big one is that these banks can service the entire global market, massively increasing competition among and hence quality of banking services.
What problem does bitcoin solve for banks?
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