Better money than autonomy: Old financial system triumphs over Bitcoin

Bitcoin offer complete autonomy. Only the owner can access his account called Wallet, nobody else. But nobody can help if something goes wrong. Forgetful crypto millionaires in particular are now longing for more, not less, financial oversight.

The attraction of Bitcoin is a very special one. Nobody needs banks anymore to keep and forward the money for you. Everything happens transparently in the blockchain. Only the owner has access to the account called Wallet. Nobody can file claims, no central bank, no financial supervision.

Complete autonomy, complete decentralization. Great, say crypto fans. Not really, say more and more people who have already tried it. For example, those who have been there since the very beginning, bought thousands of Bitcoins cheaply ten years ago and now theoretically have a fortune. A million dollar fortune that many can no longer get at. Because they threw their hard drive in the trash or forgot their login details.

economist Philipp Sandner von the Frankfurt School of Finance and Management speaks of "bizarre things that arise because people were there early, but then threw away their interest and password or their computer when the prices did not rise". Accordingly, there are a few people who are willing to really do anything to get this old hard drive back, says the founder of the Blockchain Centers (FSBC) in the ntv podcast "Another thing learned" and adds an important insight: "Of course, a bank has certain advantages. I cannot imagine that it would have lost a password of this kind."

"Do you make your own shoes?"

Of the 18.5 million Bitcoin that exist worldwide, around a fifth are already lost forever. That's currently between $ 100 billion and $ 140 billion that is simply gone. Forever. Depending on where the extremely volatile course is.

Stefan Thomas can tell you a thing or two about it. The German programmer lives in San Francisco and would be worth the equivalent of $ 200 million. If only he could remember his Bitcoin password. He, too, is one of those who are no longer so happy that everything works decentrally with the blockchain. "This whole idea of ​​being your own bank …" he told the New York Times in early January. "Let me put it this way: Do you make your own shoes? We have banks so we don't have to worry about things that banks do all the time."

Philipp Sandner sees it similarly. He also believes that the decentralized appeal of cryptocurrencies has an expiration date. In the medium term, banks and other financial service providers will also take over the tasks for Bitcoin, Ripple, Ethereum and Co that they also perform for euros and dollars: They will keep the contents of an account safe for a fee and take care of them. Via app, website or, if necessary, at the machine.

Not popular, but important

Financial intermediaries such as banks, insurers and investment companies are not particularly popular, but they perform an important role in the global financial system. They mediate different financial instruments between private individuals and companies and regulate supply and demand. Not always perfect, and sometimes to the edge of the abyss like the 2008 financial crisis.

But in principle, their benefits cannot be denied: They are the protection in case a pin or the EC card is lost. Getting the account back is cumbersome. But the money on it or the stocks in the portfolio are not lost forever. Unlike with Bitcoin, says Philipp Sandner. There is no customer center there, no 0800 number that you can call.

The thrust for cryptocurrencies is obvious. PayPal, for example, wants to start offering Bitcoin and other cryptocurrencies for sale, purchase or payment in its app this year. Just like Square, the giant fintech from Twitter founder Jack Dorsey. In Germany, crypto fans can buy or sell Bitcoin at the Stuttgart Stock Exchange. Neobrokers such as the Frankfurt startup Justtrade or the young US role model Robinhood also support retail. But not decentrally, but according to the rules of the financial supervisory authorities, the German Bafin or the American SEC. If you buy Bitcoin through Robinhood, you have to remember your access data for the broker, not the complicated, up to 64-digit long crypto key.

Revolution through the blockchain

That goes against the "spirit of Bitcoin", but the cryptocurrency has by no means failed. Philipp Sandner and other crypto experts see this as a new type of investment. A "digital commodity" like gold that you can invest in. Plus, the technology behind Bitcoin actually has the potential to revolutionize the global financial system. Perhaps in 15 years, every electronic transaction in the world could be processed via the blockchain, says the founder of the Blockchain Center. Very fast and safe.

Because in this respect today's financial system has enormous pitfalls. Especially in payment corridors that are rather unusual. For example, when the money from the EU goes to China, there is a problem with the different characters. Different banks on different continents work with different technologies, rules and standards. That takes a lot of time.

On the Ethereum platform, on the other hand, a transaction from Germany to Santiago de Chile, for example, takes around 10 to 15 seconds, says blockchain expert Sandner. "This is currently not possible with any other technology. And that applies not only to transactions in a currency in euros or dollars or the like, but also to any valuable object – including stocks or certified gold.

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