Banks position themselves as guardians of your wealth, but the reality of how money works reveals a system designed for their benefit, not yours.
Bitcoin exposes these uncomfortable truths by offering an alternative that operates on entirely different principles.
- Your Money Isn’t Actually Yours
When you deposit money in a bank, you become an unsecured creditor. The bank owns those funds and promises to pay you back. During financial crises or bank runs, they can freeze withdrawals, limit access, or simply fail. Bitcoin stored in your own wallet is actually yours, meaning no intermediary permission is required.
- Banks Create Money From Nothing
Through fractional reserve banking, banks lend out far more money than they hold in deposits. They literally create money when they issue loans, inflating the supply and diluting your purchasing power. Bitcoin has a fixed supply of 21 million coins that no bank or government can inflate.
- They Profit While Your Savings Lose Value
Banks pay you 0.5% interest while inflation runs at 3-7%. They borrow your money cheaply, lend it at higher rates, and profit while your purchasing power erodes. Bitcoin’s programmatic scarcity means no central authority can debase it to benefit insiders.
- Every Transaction Is Monitored and Controlled
Banks track every purchase, freeze accounts without warning, and block transactions they deem suspicious. Your financial privacy and freedom exist at their discretion. Bitcoin transactions are permission-less and censorship-resistant.
- They’re Too Big to Fail (You’re Not)
When banks make bad bets, governments bail them out with your tax dollars. When you make bad decisions, you face the consequences alone. Bitcoin has no bailouts—everyone operates under the same rules.
- The System Is Designed for Them, Not You
Overdraft fees, minimum balances, wire transfer charges, foreign transaction fees—banks extract wealth from customers at every opportunity. Bitcoin’s peer-to-peer system eliminates these rent-seeking intermediaries.
Understanding what’s broken is the first step toward fixing it.
If you’d like to go deeper into understanding how Bitcoin offers an alternative to the broken banking system, take Natalie Brunell’s “How Bitcoin Fixes Money” microcourse, available exclusively at Genius Academy. In bite-sized lessons, Brunell breaks down the problems with traditional money and how Bitcoin’s decentralized design solves them.
Know what banks don’t want you to know. Understand the alternative.
