Bitcoin Replacing Offshore Banking

For decades wealthy individuals, corporations, and institutions have had the luxury of hiding their vast sums of wealth in tax havens to avoid high tax rates, particularly in Switzerland. Since bank secrecy laws were enshrined in Switzerland’s constitution in 1934, Switzerland has become home to one-third of the world’s overall hidden wealth. However, on December 31, 2017, that ability to dodge the tax man will no longer exist. Why? The global community has forced Switzerland to participate in the Automatic Exchange of Information Program by the Organization of Economic Corporation & Development (OECD), which aims to ensure that offshore accounts are known to the appropriate authorities. Switzerland’s participation in this program, starting in 2018, is heralded as a major breakthrough to end tax avoidance, as TRILLIONS of dollars will now be known to the rest of the countries participating in the program. This will create a huge gap and demand in the market as Swiss bank account holders scramble to find a way to safely, effectively, and secretly store value. It is because of these three elements and the other elements I have highlighted below that, as of today, Bitcoin is the BEST alternative store of value one can ask for.

Opening Accounts:

To open a Swiss bank account, extensive documentation will be required by the counter-party. Your identity, employment, the source of wealth, and any other types of verification requested by the bank are needed to open an account. With Bitcoin, users can create accounts instantly. Bitcoin wallets use software that randomly creates public and private keys that can be stored digitally, on paper, online, or with a phrase of your choice. Essentially, unlimited key pairs can be created without any type of approval.

Financial Privacy:

As of the beginning of next year, Swiss bank account holders will no longer have the luxury of keeping their funds private. Swiss banks are now required to transmit account holder information to other financial institutions and authorities upon request. For Bitcoin, users can make their funds as private as they like. Since Bitcoin addresses are just a string of numbers and characters, users are able to store their funds with no connection to their actual identity or IP address.

Security of Funds:

Money held at banks are generally insured against loses, up to a certain point, by the institution. Bitcoin users have only themselves to rely on for security. Users are responsible for securing their private keys, which gives them control over their Bitcoins. However, we are beginning to see some exchanges and online wallets offer their clients insurance.

Government Seizures:

Governments can seize assets at any bank, whether its cash deposits or valuables in a safe deposit box. The government can even decide that your funds are needed for a bank bailout. For Bitcoin users, as long as their private keys are secured, their funds cannot be seized by anyone. However, if Bitcoin users transfer or store their Bitcoins on an exchange, a 3rd party can compromise the Bitcoins that are stored there.

Transaction Speed:

For Swiss banks, account holders have to worry about slow and unknown transaction times because the destination of the transfer and timing of it determine how quickly the funds will arrive. With Bitcoin, transactions are facilitated through the internet. Bitcoin transactions are sent instantly and are confirmed within 10 minutes to 2 hours.

Transaction Fees:

For Swiss banks, fees can easily run into double-digit percentages. Depending on the destination and the amount, your transaction fees can be up to 30% of the total transaction. Remittance payments would represent the higher end of this threshold, while interbank transfers are usually free of charge. For Bitcoin, users attach a small miners fee to their transaction, which will help facilitate the transfer. The fee amount attached to the Bitcoin transaction will be contingent upon how busy the Bitcoin network is, and how much data is being sent. However, it will ALWAYS be substantially lower than any financial institution.

Ease of Transfers:

For Swiss bank account holders, one can visit a bank’s branch to initiate a transfer or one can do so with mobile or online banking. For Bitcoin users, all they need is an internet connection and a compatible device to initiate a transfer.

2018 — The Year of Bitcoin:

Today, Bitcoin trades around $17,000 a coin and has an average trading volume of $2,460,983,124. It is also estimated that only 15 million of the 7.5 BILLION people in the world have or use Bitcoins. To help put these numbers in perspective, Apple stock has $5 Billion shares outstanding (impossible to know the exact count of each individual shareholder as many institutions own Apple stock for their financial derivatives) and an average trading volume of $28,806,898. With Apple’s market capitalization at $886 Billion and Bitcoin’s market capitalization at $284 Billion, this means Bitcoin is SIGNIFICANTLY UNDERVALUED!! People need to understand that like various peer to peer platforms, the value of Bitcoin is derived from user growth and utility.

2018 will undoutedly be the year of Bitcoin. With trillions of dollars being exposed in Switzerland’s offshore bank accounts, if even 1% of these funds find refugee in Bitcoin, we should see a dramatic rise in Bitcoin’s value.

Bitcoin Replacing Offshore Banking was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.