Will DeFi Kill Banks?

[fdsa]

On 10/30/2021 at 3:23 AM, lkn said:

Would that alternative be Wise?

No, it would not - I needed to pay an invoice to a company, not make a simple money transfer. Yes, Europe has SEPA (and this was an European company) but payment from south-east Asia was possible by SWIFT only, so... pay 150 EUR to receive 100 EUR.

 

11 hours ago, GrandPapillon said:

what kind of idiots make a 100 EUR transfer using SWIFT?

if you do not need something it does not mean that nobody needs that.

I was forced to do a bank transfer because another "blast from the past" system called Paypal was not supported by that company. If I lived in Europe I would lose peanuts on fees and the transfer would come instantly, but I live in SEA and the receiver lives in Europe hence the problem of extraordinary fees and days of waiting for payment settlement.

 

The cryptocurrencies definitely solve this problem.*

 

 

* - well, not definitely: those "kind of idiots" which do not accept Paypal with high probability will not bother to accept cryptocurrencies too.

 

 

 

P.S. "what kind of idiots make a 100 EUR transfer using Bitcoin? we have Stellar, Litecoin, Dash, and a zillion of other cryptos for such a small transfers" ????

Edited November 2, 2021 by fdsa

[Neeranam]

 Burger King is  now getting involved in crypto. 

https://www.pymnts.com/restaurant-innovation/2021/burger-king-hedges-crypto-bets-loyalty-rewards/

 

Also, McDonalds

https://adage.com/article/marketing-news-strategy/mcdonalds-gets-inito-nft-game-mcrib/2376996

[Neeranam]

1 hour ago, fdsa said:

No, it would not - I needed to pay an invoice to a company, not make a simple money transfer. Yes, Europe has SEPA (and this was an European company) but payment from south-east Asia was possible by SWIFT only, so... pay 150 EUR to receive 100 EUR.

 

if you do not need something it does not mean that nobody needs that.

I was forced to do a bank transfer because another "blast from the past" system called Paypal was not supported by that company. If I lived in Europe I would lose peanuts on fees and the transfer would come instantly, but I live in SEA and the receiver lives in Europe hence the problem of extraordinary fees and days of waiting for payment settlement.

 

The cryptocurrencies definitely solve this problem.*

 

 

* - well, not definitely: those "kind of idiots" which do not accept Paypal with high probability will not bother to accept cryptocurrencies too.

 

 

 

P.S. "what kind of idiots make a 100 EUR transfer using Bitcoin? we have Stellar, Litecoin, Dash, and a zillion of other cryptos for such a small transfers" ????

There is really no comparison between Wise and crypto for cross border remittances. 

 

I suppose for the old guys getting their pensions put into a bank in their former countries, it is easy for them to use Wise, and they don't have to learn about new technology. 

 

[Neeranam]

1 hour ago, fdsa said:

P.S. "what kind of idiots make a 100 EUR transfer using Bitcoin? we have Stellar, Litecoin, Dash, and a zillion of other cryptos for such a small transfers"

no one

 

I use XRP for small amounts, costs no more than $0.04

[lkn]

3 hours ago, fdsa said:

The cryptocurrencies definitely solve this problem

Majority of European businesses will accept your VISA/Mastercard issued by a Thai bank, and their fee for this is 0.2%.

 

With crypto, you first have to pay a Thai exchange to buy coins, and you buy at a worse rate, because there is downward pressure on THB due to capital controls, then you have to pay the miner for the transaction, then you have to exchange your crypto currency back to EUR, which is also not free, and then you have to find out how to withdraw those euros to the company’s bank account without the exchange subjecting you to AML/KYC.

 

If you add up all the costs for this, and the time it takes, you will find that crypto is a terrible solution for this, when you could just do an instant payment with your bank issued debit card.

 

You can argue that this doesn’t work, if the company refuse to accept VISA, Mastercard, PayPal, etc. But if they don’t want to do that, what on Earth makes you think they will accept crypto?

Edited November 2, 2021 by lkn

[lkn]

2 hours ago, Neeranam said:

Burger King is now getting involved in crypto […]

These are just promotional give-aways, i.e. marketing to tap into the crypto-hype, but they are not adopting crypto or doing anything useful with the technology.

 

Btw: I stumbled across this summary of Michael Saylor’s “teachings”, seriously, these are the ramblings of a mad man:

 

[Neeranam]

7 minutes ago, lkn said:

Btw: I stumbled across this summary of Michael Saylor’s “teachings”, seriously, these are the ramblings of a mad man:

I don't like that man, but you must admit, he's good at investing. 

I don't like BTC too, but 5% of my liquid assets are in it. 92% are in altcoins and 3% in gold. 

[GrandPapillon]

4 hours ago, fdsa said:

if you do not need something it does not mean that nobody needs that.

I was forced to do a bank transfer because another "blast from the past" system called Paypal was not supported by that company. If I lived in Europe I would lose peanuts on fees and the transfer would come instantly, but I live in SEA and the receiver lives in Europe hence the problem of extraordinary fees and days of waiting for payment settlement.

 

The cryptocurrencies definitely solve this problem.*

if that company didn't accept paypal and forced you with SWIFT, I find it hard to believe they would process cryptos as an alternative as it would be far more complex than a simple PayPal transaction or SWIFT

 

you are talking once again about imaginary scenarios with Cryptos, the whole process is a pain, and if you are dealing with participants that are clueless about transfers, they will definitely not engage with some silly process with cryptos ????

[GrandPapillon]

1 hour ago, lkn said:

 

You can argue that this doesn’t work, if the company refuse to accept VISA, Mastercard, PayPal, etc. But if they don’t want to do that, what on Earth makes you think they will accept crypto?

absolutely and that was my point too, but some how crypto fans keep forgetting how the real world works and they don't represent the majority of people, who are still stuck with credit cards, or worse, cash ????

 

Edited November 2, 2021 by GrandPapillon

[lkn]

1 hour ago, Neeranam said:

I don't like that man, but you must admit, he's good at investing. 

And yet you have brought up his name as an authority several times in this thread.

 

As for good at investing: Let’s wait and see how this all turns out. He has bought BTC for several billions. In my view he just has a *major* risk on his balance sheet, as I doubt the demand for his >100k bitcoins is there at their current value. And he doesn’t seem to have a long-term strategy for these coins, it’s just “buy and hold”.

 

Also, do you know that MicroStrategy has previously been fined by the S.E.C. for improper reporting of their finances (to make it look like they were profitable)? I would not trust this guy, and certainly not after I read his ramblings, he sounds like Mike Lindell on steroids.

 

2 hours ago, Neeranam said:

5% of my liquid assets are in it. 92% are in altcoins and 3% in gold

So you have nothing invested in productive assets like stocks?

 

I don’t know how much your liquid assets amount to, or if you have wealth in illiquid assets, but it sounds like you are taking an enormous amount of risk. Even if you are bullish on crypto, historically we have seen many altcoins go to zero rather quickly, and we have seen BTC drop 50% and take most altcoins with it.

[GrandPapillon]

amazing how people will take all kind of silly risks on very risk assets, and then blame it all on banks for taking a $5 fee on their low balance account ????

 

if you think "subprime" securities were toxic and nobody stopped the bank from making money, wait when cryptos face the music and start crashing in complete unison ????

 

crypto fans are acting like very toxic banks with their drug fueled addiction on profits at all costs ????

 

some might see the irony in all this, blaming banks for everything, and deciding to start something to change the financial world, yet doing the exact same things that toxic banks have been doing ????

 

from the frying pan to the fire ????

Edited November 2, 2021 by GrandPapillon

[Pmbkk]

 

People are still stupid enough to buy something any salesman will tell them - 99.99% loss on cyrpto..

 

https://www.bbc.com/news/business-59129466

 

[lkn]

6 minutes ago, GrandPapillon said:

crypto fans are acting like very toxic banks with their drug fueled addiction on profits at all costs ????

It’s not even subprime, we have unbacked “stable coins” (i.e. wildcat banking), we have somewhat legit exchanges like Coinbase being fined by the CFTC for doing wash trading, we have strong indication that Binance is running a bucket shop, forensic analysis showed that QuadrigaCX was trading against their customers (i.e. front running), etc. etc.

 

The S.E.C. chairman is literally correct when he says crypto is the wild west of banking: It is an unregulated space, so of course it attracts scammers using all the schemes from the previous century (before we had regulation and central banks) to separate a fool from his money ????

 

 

[ThailandRyan]

Yet, I guess this was OK for you crypto deniers as well.

 

https://www.investopedia.com › arti...
The Biggest Stock Scams of Recent Time - Investopedia

 

Everything and I mean everything can be manipulated and that means real estate as well....  

Edited November 2, 2021 by ThailandRyan

[Pmbkk]

2 minutes ago, ThailandRyan said:

Yet, I guess this was OK for you crypto deniers as well.

 

https://www.investopedia.com › arti...
The Biggest Stock Scams of Recent Time - Investopedia

 

Everything and I mean everything can be manipulated and that means real estate as well....  

 

People's minds are a great starting point.... Honest, honest, believe me, etc...

[Pmbkk]

 

Considering COP26 is going on - interesting that non of these cyrpto warriors are so silent...

 

I have a pair of flip-flops - I'll cut them into 50 a piece and sell them for £1 million a piece, I will not replicate the same flip-flops  - you don't have to waste energy,  I'll post them..

 

Cash by real money bank transfer - don't accept monopoly money

 

My accountant says HMRC doesn't accept anything that is not regulated - I did ask could I pay my business tax in playdo currency but unfortunately not. I blame Johnson - he's a bit of a clown so I thought he'd like fake money ????

Edited November 2, 2021 by Pmbkk

[lkn]

41 minutes ago, ThailandRyan said:

The Biggest Stock Scams of Recent Time - Investopedia

This just proves that we need regulation and agencies to oversee the market, otherwise scammers will be scamming.

 

And at least with these stock scams, the companies claimed to have a business strategy for how to create value for their shareholders. With crypto it is just, we all need to buy HEX, Safemoon, Doge, Shibu Inu, Floki, or what have you, and somehow, it will make us all rich… just totally nonsensical thinking! It’s actually identical to the business strategy of the underpants gnomes. Step one, collect underpants altcoins, step three, profit! ????

Edited November 2, 2021 by lkn

[Neeranam]

4 hours ago, lkn said:

And yet you have brought up his name as an authority several times in this thread.

 

As for good at investing: Let’s wait and see how this all turns out. He has bought BTC for several billions. In my view he just has a *major* risk on his balance sheet, as I doubt the demand for his >100k bitcoins is there at their current value. And he doesn’t seem to have a long-term strategy for these coins, it’s just “buy and hold”.

 

Also, do you know that MicroStrategy has previously been fined by the S.E.C. for improper reporting of their finances (to make it look like they were profitable)? I would not trust this guy, and certainly not after I read his ramblings, he sounds like Mike Lindell on steroids.

 

So you have nothing invested in productive assets like stocks?

 

I don’t know how much your liquid assets amount to, or if you have wealth in illiquid assets, but it sounds like you are taking an enormous amount of risk. Even if you are bullish on crypto, historically we have seen many altcoins go to zero rather quickly, and we have seen BTC drop 50% and take most altcoins with it.

He is an authority, I just don't like him or bitcoin.

 

I don't know that about Microstrategy and don't really care about them. What they allegedly did was nothing compared to for example Goldman Sachs or Morgan Stanley.

 

I sold all my stocks in 2016 and bought crypto and this decision has changed my, and my family's life in ways I could never have imagined. 

 

I am starting to sell my altcoins and buying additional property in a couple of months.  50% is nothing in crypto. Say Bitcoin goes to $200k and then drops to $100k(which is very likely), I am happy as I bought most of my BTC at $2k, and will buy again after the bear market starts.

 

 

[Neeranam]

3 hours ago, lkn said:

With crypto it is just, we all need to buy HEX, Safemoon, Doge, Shibu Inu, Floki,

These are not the same as the high cap alts. But there is money to be made on these type of things if you know what you're doing. 

 

There is still time to get into crypto, not in the smart money stage but you could still make much more than your stocks. 

 

[Neeranam]

The banks are such hypocrites. 

 

Some of the biggest banks and financial firms have added about 1,000 crypto-related roles since 2018, according to Revelio Labs, which collected the data by scraping LinkedIn. Among those hiring the most are JPMorgan Chase & Co., Wells Fargo & Co. and Goldman Sachs Group Inc., which shored up their ranks as demand for the fast-developing virtual currencies ballooned.

https://www.bloomberg.com/news/articles/2021-11-01/wall-street-is-amassing-a-crypto-army-and-paying-up-for-recruits

 

[lkn]

1 hour ago, Neeranam said:

The banks are such hypocrites. 

Banks want to make money, they have pushed Dot Com stocks on retail investors, they have pushed unsustainable mortgage loans on wanna-be house owners, they repackaged and sold this (subprime) debt to other investors, and now, they eye a possibility of selling crypto to their (for now) wealthy clients.

 

This is why regulation, consumer protection, and oversight is so important when it comes to financial markets, because people are greedy and many are financially illiterate, so it’s easy for banks to sell bad products to consumers who are lured by the advisor talking about “free money”.

 

I personally am not a fan of banks, but not all banks are the same, there are good banks out there, and there are companies that handle many of the tasks traditionally handled by banks, but at much better prices (e.g. for stock trading, currency conversion, and remittance), this is often overlooked by crypto proponents. For them, it tends to boil down to banks are bad, so crypto must be good, ignoring the fact that the traditional business of a bank is lending out money (car loan, business loan, mortgage, etc.), and crypto can’t actually do that.

[lkn]

1 hour ago, Neeranam said:

These are not the same as the high cap alts. But there is money to be made on these type of things if you know what you're doing. 

Last I checked, Shibu Inu and Doge had the 9th and 10th largest market cap, and that list included stable coins, but you think these are small cap coins? Also, what does “money to be made […] if you know what you're doing” mean? That you have a 100% sure way to make money on these? Or that everyone who did manage to make money on these “knew what they were doing” , i.e. to be determined retroactively ????

 

1 hour ago, Neeranam said:

There is still time to get into crypto, not in the smart money stage but you could still make much more than your stocks. 

At what risk? There are lots of things where you, in theory, can make more money than with stocks, but it’s not a risk I want to take — I am already wealthy, and wealth preservation with a decent predictable return is much more important than these high-risk zero-sum games.

[GrandPapillon]

6 hours ago, lkn said:

It’s not even subprime, we have unbacked “stable coins” (i.e. wildcat banking), we have somewhat legit exchanges like Coinbase being fined by the CFTC for doing wash trading, we have strong indication that Binance is running a bucket shop, forensic analysis showed that QuadrigaCX was trading against their customers (i.e. front running), etc. etc.

 

The S.E.C. chairman is literally correct when he says crypto is the wild west of banking: It is an unregulated space, so of course it attracts scammers using all the schemes from the previous century (before we had regulation and central banks) to separate a fool from his money ????

 

 

And the SEC was in my office the other day complaining I forgot a comma and a disclosure paragraph in my compliance manual. I mean W*T*F??? ????

Edited November 2, 2021 by GrandPapillon

[Neeranam]

1 hour ago, lkn said:

At what risk? There are lots of things where you, in theory, can make more money than with stocks, but it’s not a risk I want to take — I am already wealthy, and wealth preservation with a decent predictable return is much more important than these high-risk zero-sum games.

Well, if you are already wealthy, with a good return of course you don't need to invest in risky things.  

I choose to invest in some risky cryptos and some safe ones, as I'd like to retire 10 years early, which would be amazing as I never started investing in anything, apart from gold, only 7 years ago. 

 

I'm a little confused as to how you know a bit about crypto and obviously spend a great deal of time reading about an asset that you have no intention of investing in. 

 

 

It's as if you want crypto to fail, as maybe you missed the boat. Good News , for me, crypto is way too big to fail, and those who don't join in will be left behind,eg the banks and now the governments of the world. 

 

[Neeranam]

1 hour ago, lkn said:

ignoring the fact that the traditional business of a bank is lending out money (car loan, business loan, mortgage, etc.), and crypto can’t actually do that.

DeFi. Can do exactly that. 

[The Cipher]

Damn. I just read in the news that SCB bought a controlling stake in Bitbub? Wild. Didn't see that one coming.

[Neeranam]

6 hours ago, The Cipher said:

Damn. I just read in the news that SCB bought a controlling stake in Bitbub? Wild. Didn't see that one coming.

DAmn, I was thinking of buying some of the Bitkub token a few days ago. 

[lkn]

10 hours ago, The Cipher said:

Damn. I just read in the news that SCB bought a controlling stake in Bitbub? Wild. Didn't see that one coming.

The announcement (that you linked to) gives us a few interesting numbers:

 

9 month volume on the exchange (converted to THB): 1.03 trillion.

 

They charge a 0.25% trading fee, so naively that would give them revenue of 2,575 million, however, reported revenue is 3,279 million with net profit of 1,533 million.

The extra revenue could be transfer fees passed on to consumers (when withdrawing funds) or other fees. I am actually surprised how well these numbers match up, I would have thought that people get a discounts on their trading fees, sign-up bonus, etc., so net revenue *below* 2,575 million.

 

Profit margin is 46.8% and they seem to spend almost 200 million baht per month. This sounds like a lot, but programmers are probably paid close to Western salaries, and there might be a large marketing budget.

 

The deal values the exchange at 35 billion, so going by their 9 months of reported profit, their price/earnings is 20.55, which is actually fairly low for a (perceived) growth company. For comparison, Coinbase is currently trading at a P/E of 42.

 

The volume itself is not really useful for estimates, but we do get from the above, and if Bitkub has 92% marketshare, that Thai people are spending around 400 million baht per month *in fees* on trading crypto coins.

 

Although this number should be taken with a grain of salt, because fees are presumably paid in crypto, so only if Bitkub and the other exchanges cash out regularly, do these fees translate into baht.

 

Due to all the airdrops and staking schemes, the later being a gateway for unbacked stable coins (e.g. Celsius Network has a billion dollar credit with Tether), I am actually not sure how much new fiat needs to enter the system for it to continue running.

[lkn]

14 hours ago, Neeranam said:

DeFi. Can do exactly that. 

Please tell me where I can apply for my next mortgage? For comparison, I can borrow €1 million over 30 years at a fixed interest of 2% via my bank.

[lkn]

14 hours ago, Neeranam said:

I'm a little confused as to how you know a bit about crypto and obviously spend a great deal of time reading about an asset that you have no intention of investing in. 

As I said in the beginning of this thread, I was initially interested in the technology, before it blew up, and before I realized just how useless blockchain actually is (e.g. that the cost of building the chain must be higher than the value secured). But I kept watching the space because a lot of interesting things happen, starting with Mt. Gox and just escalating from there — just because I don’t want to start my own criminal empire doesn’t mean I won’t find it interesting to read about people like Paul Le Roux ????

 

14 hours ago, Neeranam said:

It's as if you want crypto to fail, as maybe you missed the boat. Good News , for me, crypto is way too big to fail, and those who don't join in will be left behind,eg the banks and now the governments of the world. 

I don’t want it to fail, but I think it is inevitable that it will fail, in the sense that a lot of people will lose a lot of money, and I want this to affect as few people as possible, which is why I am a vocal critic and try to bring up the actual problems with the technology and the unregulated operators in the space.

 

U.S. regulators and lawmakers are sounding the alarm, the IMF put crypto in their October report about financial stability, we are not there yet, where it poses a systemic risk (according to the report), but we are moving toward it!

 

And when/if crypto fails (if it grows too big), there is a good chance it *will* affect me, just like the subprime crisis affected me, even though I am not even American.

 

I realize that people like you are a lot cause, and so far it seems you have done great in the space. But hopefully people will think twice before they invest more than what they can afford to lose in magic internet money.

 

Coinbase has around 68 million verified users. That is 68 million people that has put savings in crypto! This is absolutely crazy if you actually understand what it is: It is people who have bought digital tokens that cannot be used for anything other than trade for other digital tokens. Yes, they can *currently* be sold for money, but they are sold to other investors, who buy them, only because they think that they will go up in value.

 

It is really puzzling to me that many in this thread does not understand this simple fact.

 

It’s not like buying a bitcoin entitles you to any profit whatsoever, i.e. it’s not like running an exchange, a mining rig, or other business that actually does generate perceived value, and receives payment for having done so.

Edited November 3, 2021 by lkn