Banking Is a Scam

Bitcoin Is the Exit

Banking promises safety, liquidity, and convenience, yet the fine print tells a different story. The modern system extracts value through hidden dilution and explicit fees, it privatizes gains in the boom, it socializes losses in the bust, and it leaves savers holding the bag when policy goals change. If that sounds harsh, good, because the incentives are harsher. There is a way out, and it starts with understanding how the game is played, then moving part of your savings to assets you control directly, with Bitcoin at the top of that list.

How the scam works

Fractional reserves and maturity transformation
Banks take your demand deposits, money you can ask for today, and lend most of them into long dated assets. This maturity mismatch creates profit in good times, and sudden insolvency risk in bad times. Your “cash” is an IOU, not a reserved pile with your name on it.

Opacity and rehypothecation
The same collateral gets pledged again and again through the system. You see a tidy mobile app balance, the bank sees a funding source it can reuse. In stress, everyone tries to claim the same dollars at once, and the illusion breaks.

Deposit insurance as theater
Insurance calms nerves, but it is ultimately backstopped by taxpayers or by money creation. Either way, the cost is socialized. When confidence wobbles, guarantees expand, rules change, and the bill arrives later through inflation or future taxes.

Financial repression
When debt loads get heavy, policy makers prefer inflation that runs above deposit rates. You earn a low nominal yield, prices rise faster, your real savings shrink quietly. No vote is required for this, it is automatic.

Moral hazard
If large institutions expect rescue, they take more risk. The gains are private, the tail losses are public. That incentive structure is not a bug, it is the business model.

Why this keeps hurting savers and growth

A system built on leverage and political discretion needs constant confidence, it needs ever cheaper credit to roll yesterday’s promises. Savers are pushed out the risk curve to try to keep up. Productivity takes a back seat to asset price management. The result is weak real returns for workers and retirees, and periodic crises that reset the scoreboard at your expense.

History repeats this cycle, credit booms create paper wealth, policy leans in to protect it, then inflation or default does the cleanup. You are told this is stability, it is not, it is managed erosion.

Bitcoin as the exit

Bitcoin changes the property rights of money. It replaces promise based money with bearer money that settles on a public ledger you can verify yourself.

Fixed supply
Twenty one million, known issuance, no committee. Scarcity is programmatic, not political.

Self custody
You can hold your own keys. No bank, no broker, no gatekeeper. If you control the keys, you control the asset.

Final settlement
On chain settlement is not someone else’s liability. There is no maturity mismatch, there is no queue at a teller window.

Open and neutral
Anyone can participate, validate, and build, there is no permission slip, there is code and consensus. That neutrality is the point.

Portable and divisible
You can move value across borders quickly, you can split it into tiny units for everyday use, you can store large amounts in a small space.

Common objections, straight answers

Volatility
Yes, price swings are real. Volatility is the market discovering a new monetary asset. Time in the asset, not timing the asset, has historically reduced that risk for long horizon savers.

Energy use
Proof of work converts energy into monetary finality. It anchors the system in the physical world, which is precisely why it cannot be printed away.

Regulation
Rules can slow adoption, rules cannot change math. The network is antifragile because it is distributed, open source, and globally owned.

A practical playbook for savers

1. Decide on an allocation you can hold through drawdowns
   Start small, build over time, focus on a multi year horizon.

2. Buy cleanly, withdraw promptly
   Acquire from reputable venues, then move coins into self custody. Do not leave long term savings on exchanges.

3. Set up proper custody
   Use a hardware wallet, write your seed phrase on durable media, test a small send and restore, then scale up. For larger balances, consider multisignature with geographically separated keys.

4. Avoid leverage and yield schemes
   The point is to escape counterparty risk, not to recreate it for a few extra points of yield.

5. Stay liquid in fiat for expenses
   Keep a cash buffer for bills and emergencies, use Bitcoin for savings, not for rent money.

6. Complement, do not concentrate
   Gold and fully allocated precious metals still have a role. They share the key property, nobody else’s liability.

The bottom line

Banking as practiced today is a confidence game, it works until it does not, it pays insiders handsomely, it dilutes savers quietly, and it calls the result stability. Bitcoin offers a different social contract, transparent rules, hard limits, personal control. You will not fix the system overnight, you can fix your balance sheet today. Hold some money that cannot be printed, cannot be frozen easily, and does not depend on a promise. That is not cynicism, that is basic risk management.