Journal of a Wayward Philosopher
The Future of Banking
September 23, 2017
Hot Springs, VA
“The biggest disruption of Bitcoin is that banks are no longer needed. Every major financial institution has made this technology its focus… but they say Bitcoin is a fraud. It’s the blockchain, they proclaim. They can utilize the technology ‘behind Bitcoin’ to make themselves smarter, better, faster, bigger. But Bitcoin’s fundamental use-case is to remove the banking function entirely from the equation. When banks come to terms with this, they will contact their congressmen and spend millions… maybe billions to slander Bitcoin.” – Erik Voorhees
The S&P closed yesterday’s trading session at $2,502. Gold closed at $1,300 per ounce. Crude Oil closed at $50.66 per barrel. The 10-year Treasury rate closed at 2.26%. Bitcoin is trading around $3,780 per BTC today.
I have ventured back down to south Florida to see what Irma left behind… and maybe do a little more work in the publishing arena.
I have been flying back-and-forth between Florida and Virginia for several months now, but I do have a vehicle in Delray to get me around town… which I had left parked conveniently beside the largest palm tree I have ever seen.
I am happy to report that palm trees are quite hardy – which was a surprise to me. But the palm branches… not so much. So, my vehicle survived the hurricane. But you will find many naked and deformed palm trees hanging around south Florida now.
Speaking of naked and deformed, I spent the flight down thinking about Bitcoin, banking, and the nature of disruptive technology.
As you recall, the CEO of JP Morgan called Bitcoin a fraud last week… and we had a little fun at his expense.
In reality, the banking sector is where the fraud is. Money laundering… rigging LIBOR… robo-stamping foreclosures… ripping off “muppets”… fraud has run rampant in the banking sector for more than a decade now.
That is why Bitcoin has been so successful. It is a timely solution.
But Bitcoin is not a new idea. The Cypherpunks were working on cryptocurrencies all the way back in the 80s.
It took thirty years for the idea to stick because the world was not ready for them. People didn’t know they needed independent money yet. They still trusted the System.
Bitcoin Will Change the World
But remember, Bitcoin is not just a solution to the banking problem.
Bitcoin is a disruptive technology. Disruptive technologies change everything. There will be no going back.
Agriculture was the disruptive technology 15,000 years ago. Agriculture made us farmers. We didn’t go back to being hunter/gatherers.
Capital markets were the disruptive technology 500 years ago. Markets made us an industrial society. We didn’t go back to feudalism.
The automobile was the disruptive technology 100 years ago. The world became smaller as transportation improved. And we didn’t go back to horse and buggies.
The internet was the disruptive technology 20 years ago. The world became connected… and we didn’t go back to paper records and post offices.
And Bitcoin is the disruptive technology today. Bitcoin makes all of us custodians of our own money. We won’t go back to banking.
Jamie Dimon may not know this yet… but some banks do.
The Future of Banking
Capital One just opened a new bank branch here in Delray Beach – right on Atlantic Avenue.
“That’s just stupid,” I thought to myself. “Their rent is at least $20,000 a month… but physical bank branches are completely obsolete. Why open a new one? Their best chance of surviving the next decade is to leverage mobile banking as far as it will take them.”
It turns out they aren’t as dumb as I thought. A friend filled me in a few days after the new branch opened:
“The new Capital One is awesome… it’s the best bank I have ever been in! You walk in and they have catchy music playing. And it looks like an upscale lounge… nice décor… comfortable furniture.
You look around and there are no bankers in sight. Instead, the one guy working there is selling expensive hipster coffee. And he will give you a tablet to open a Capital One account online if you want.
He told me that they are catering to the local business community. Businesses can rent the place out for meetings… or lunches… or parties… whatever they want. And the bank will sell them all the hipster coffee they can drink!”
So, there you have it – the future of banking!
Little Maddie will never have a bank account. She will never have to wait for her check to “clear”. Or wait 2 or 3 business days for her deposit to post.
Instead, she will handle all of her financial affairs herself, within the crypto economy.
But if she’s lucky, there will still be a local bank nearby to sell her all the hipster coffee she wants…
More to come,
P.S. My new Bitcoin course teaches you everything you need to know to buy, trade, and store bitcoins securely. So far, the course boasts a 4.9 rating from active users. You can get it here.