r/Bitcoin • u/Ordinary_Inspector61 • Jun 05 '26

Vision for New Financial System Under Bitcoin Standard

L1 Bitcoin will be the base layer money for the new financial system. It's current phase where most of it's value for most people comes from store of value (unless you're politically targeted) does not change the fact that in the future it will be the new fedwire. In this world normal people will usually never have to interact with the base layer, the fees of which will be like 30$ per transaction (in today's prices), because that's around what fedwire costs. It will be used as final settlement for huge transfers between banks.

Normal people will use layer 2s issued by banks, which they will have the power to expand and contract as the economy requires. The key difference from our current system is that the base layer cannot expand, so this expansion and contraction will be bounded rather than ever increasing. Fractional reserve banking will still be the core of the financial system because it has a lot of economic value by turning stale funds into growth. Except it will be decentralized and community based, with all profits going back to depositors. And bank deposits will be directly redeemable for bitcoin from the bank, imposing market discipline, with no or very minimal government backstops. This network of decentralized DAO-structured community banks will focus on loans to small and medium sized firms to people they know in their community or projects they believe serve humanity, the innovation engine of the economy, rather than big bank loans to big monopolizing firms and highly unproductive inflationary real estate lending. There will also be full reserve options for people who do not want to take risk, but they will miss out on high yields.

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u/2xfun Jun 05 '26

The world would be a better place with a gold standard … unfortunately that standard is gone for a reason: widen the gap between classes and enslave the working class with debt.

Why would the people in charge change this?

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u/Ordinary_Inspector61 Jun 05 '26

The gold standard is gone because the base layer was a currency under the centralized control of the government and that inevitably leads to abuse, under a bitcoin standard there would be no centralized power that could manipulate the base layer's supply.

You're of course right that people in power will resist change, that doesn't mean change is impossible. Just look at history, many cases of the elite classes being overpowered and new power structures put in place. It just takes sufficient political will from the population, rather than doomerism. At the end of the day it's as simple as every one just voting in third party candidates and writing them in if they aren't on the ballot, if we can take sufficient control over the house and senate this way we can pretty much write any law. All it takes is for the masses to wake up and and vote third party (I'm talking about the US but applies to other democracies). Just look at the Reform Party they went from like 2 counciller's seats in a two party dominated system to now having more of those seats than the 2 main parties

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u/[deleted] Jun 05 '26

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u/Ordinary_Inspector61 Jun 05 '26

Yeah they're not supposed to, they're supposed to be outcompeted by newer decentralized versions of banks, with the help of poltical transformation which will remove the artifical government subsides like FDIC insurance and regulation mountains which entrench their power

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u/[deleted] Jun 05 '26

[deleted]

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u/Ordinary_Inspector61 Jun 05 '26

This is exactly the kind of attitude that will ensure nothing ever changes as we slip further into dystopia. You gotta have some open mindedness and creativity if you want to solve anything

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u/Salmon57-1 Jun 05 '26

That was kind of an insensitive comment on my part... somehow it didnt occur to me that the OP would see my comments but the rest of the world would. I'm clueless sometimes

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u/Zestyclose-Power-132 Jun 05 '26

I don't think it'll happen, it is more possible with some shitcoin as they have actual owners/companies behind them heavily lobbying.

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u/Ordinary_Inspector61 Jun 05 '26

I think the influence of the bitcoin community is stronger than any shitcoin. Just look at BPI does any other shitcoin have something like that which is actively lobbying in congress? Not to mention the fact that those shitcoins do not adequately meet the decentralization and security requirements of an international base layer money like bitcoin does, the fundamental properties are actually important at the end of the day

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u/Zestyclose-Power-132 Jun 05 '26

I don't think they look for decentralization at all, censor friendly centralized blockchains fits better to tradfi narrative.

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u/Ordinary_Inspector61 Jun 05 '26

well if they engage with the topic seriously they'll realize that other international power centers won't accept a reserve currency which centralizes power outside of their control, and thus a centralized project is doomed to fail, and they would have higher success by being early adopters of a decentralized network. And yes of course central banks will push for CBDCs but that will face significant political backlash, as it already has before they even exits, and smart polticians will capitalize on that

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u/Zestyclose-Power-132 Jun 05 '26

Nearly all countries use SWIFT which is based in Switzerland.

Not every country has to use same thing or 1 thing at all also, there are bridges.

I am sorry but this is not something BTC can solve as it requires proper lobbying, bribing, engaging.

BTC mainly supposed to be about storing value over inflation lately.

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u/Ordinary_Inspector61 Jun 05 '26

Just because people use something now doesn't mean they always will. Monetary regimes change all the time in history even though they still last pretty long. Before the current regime we had the bretton woods system from post war until early 70s, before that a different system. Use of SWIFT is use of the dollar, the actual company of SWIFT has no real actual power over the network, that belongs to the US treasury and federal reserve.

the dollar became the world reserve currency for a large combination of historical forces, the central one being the US was the most powerful country in the world with a dominant economy after everyone elses was destroyed by two world wars, but that does not mean it's still the optimal choice today. The US's power is eroding as central banks accumulate gold and dump treasuries. This was accelerated after the US abused its control over the network when it froze russias assets, proving to the rest of the world and especially non aligned countries that their US assets are not actually safe like they thought they were, decreasing the value proposition of the network. This abuse is inevitable when you have centralized power.

Having one international reserve currency is extremely useful and makes everything easier cheaper and efficient, there's a reason the dollars dominance is so strong.

At the end of the day I believe fundamentals will shine through one way or another, though it may take a long time.

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u/[deleted] Jun 05 '26

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u/Ordinary_Inspector61 Jun 05 '26

I think trust is built through the decentralized control structures of the banks which are organized as DAOs. You join that DAO with which you share a common vision for what projects should be funded, or it could just be based on your local community, so it's just about joining the right group of people that you already trust

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u/[deleted] Jun 05 '26

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u/Ordinary_Inspector61 Jun 05 '26

Yes its jumbled I know I don't have the time to perfect a reddit post about an incredibly complex topic. If you're confused why don't you ask me a specific question and I'll clarify. Also who gives a fuck about its vs it's? Stupid thing to zero in on

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u/RoscoRoscoMan Jun 05 '26

Fedwire? Guess you're American, in your American bubble.

There is an entire world out there. Stop worrying about Bitcoin and go travel.

And don't rely on Fedwire when you do. Just take some BTC with you

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u/Ordinary_Inspector61 Jun 05 '26

the entire world uses fedwire, everyone is inside the american bubble whether you like it or not

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u/Jimbob404error Jun 10 '26

Which layer are we on now?

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u/Ordinary_Inspector61 Jun 10 '26

on Chain BTC is layer 1 / base layer, lightning is one version of a layer 2 if that's what you're asking