Reviewed by Aaron Van WirdumBitcoin Banks (or Binks). It’s happening. Guaranteed. Done deal. In the bag. It’s just a question of when? Germany cleared banks to custody and handle Bitcoin and Bitcoin accounts for customer starting 2020. Who will be the first?This is one thing that people will spaz out about, and I get why, but ultimately I think it’s childishly naive to think this wouldn’t happen. First off, banks don’t exist just to hold your money for you and process payments. They make loans. There is a reason they do this, it’s a useful thing in an economy and society, it provides a return to the liquidity providers (with risk) and allows entrepreneurs to engage in endeavors they otherwise would not be able to finance. This alone guarantees they will continue to exist. Loans are based on trust, they require coordinators and people to manage and track them. They require central points: banks.That said, I guarantee they will thrive on just custodying Bitcoin and processing payments on their own private second layers. People like having someone to call for customer support, they like having recourse when things go wrong, they like having specialists take care of things they are not specialized in. This is why people have a Google or Facebook account, and don’t run their own SMTP server or decentralized social media node. Now, I absolutely think things are going to shift back in that direction and that we’re already seeing the beginnings of that, but that trend is going to be a generational thing. It’s not going to happen overnight, and possibly not even within our lifetime. Or maybe things just trend that direction and falter before actually getting all the way to the extreme. Who knows. But I do know what the world is like today, and I do know the reasons it is like that today. So this will happen, count on it.Fear not though, all is not lost. Centralized but private electronic cash has been possible since David Chaum came up with the original “Ecash” design in the 1980s. Extending these designs to encompass more complicated “smart contract” analogs with a centralized enforcement probably isn’t impossible, or even relatively hard. It is also perfectly possible to offer accounts denominated in Bitcoin without KYC/AML intrusion or doxxing. The impediments to these things have nothing to do with technological limitations, and everything to do with legal, regulatory, and social impediments. Those are things that can be shaped and directed. Yes, at the scales necessary for these types of impediments being removed the effort would be massive, but one cannot honestly say it is impossible.There’s even an incentive to push people in that direction: regulatory arbitrage. Given that Bitcoin is global and entirely digital, any jurisdictions loosening regulations and laws regarding financial services could see revenue influxes from across the entire world by doing so.We are now full on in the spot light of the global politic
The Upcoming Ten Years, Section 3: Obstacles (And Alternative Paths?)
