Bitcoin Banking in 2050 with Eric Yakes – What Bitcoin Did

Eric Yakes is the author of “The 7th Property”. In this interview, we discuss possible bitcoin banking systems that may emerge when bitcoin reaches maturity. We consider the forms of banking that have developed in the past, and the new forms of banking that Bitcoin and the Lightning Network could spawn.

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One of the major changes Bitcoin brings is that it encourages those who discover it to study and question money. It is an awareness, which changes the conception of finance, and the balance of power between the State and individuals. Not only does this upset confidence in state-controlled monetary systems, but it also causes people to question state-regulated banking systems.

The idea that there are alternatives gives optimism to those who have opposed fractional reserve banking. The expansion of the money supply beyond that covered by reserves has been seen by some as one of the main drivers of the global financial crisis. Moreover, it has spawned a generation of central bankers more comfortable printing money.

The promise of Bitcoin is the return to a full bank reserve: a balance between deposits and loans. However, while this alleviates the chaos of deleveraging unsustainable debt, it can also hamper long-term investments. These are the outlines of the main economic arguments that separated the Austrians from the Keynsians, who defined the push and pull of Western monetary policies in the post-war period.

Regardless of the merits of either side of debt around the utility of credit, one would expect Bitcoin to work across an array of societal approaches to credit. So the question is, which banking systems will Bitcoin and the Lightning Network facilitate?

Will the nature of banking remain similar to that of today, will there be a revival of old forms of banking or will the market develop new forms of banking? Each scenario is complemented by a set of trade-offs. But Bitcoin’s scarcity, combined with its utility as a permissionless, censorship-free digital global currency system, opens up a world of possibilities.

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