The comparison and contrast between Banks and Bitcoin is a pretty good one.
Banking computers sit around adding and subtracting numbers to keep track of people's money:
- Who made their car payment?
- Who received a paycheck?
- Who is spending more money than they have, and what are the consequences?
Is any of this useful to the human race?
At the end of the day, no one has any more food or lives a longer life because of a banker's math. But we all know this is important basic element of infrastructure to keep society running smoothly.
Bitcoin miners do the same thing, they keep detailed accounting of people's money. They don't directly feed anyone, but providing an accounting and a means to exchange money is important to the functioning of society.
Mining makes tradeoffs that are different from banks.
On one hand, they use a lot more electricity than banks, but on the other hand, they break the reliance and necessary trust that banks are acting responsibly.
This is especially important when we saw during the 2008 Financial crisis that banks were not trustworthy. They intentionally made bad loans, took huge risks, and damaged the economy to enrich themselves.
Because of bankers actions then, bad things did happen to society. Rates of bankruptcy increased, and that is not an abstract financial situation. Financial stressors are closely correlated with increased rates of suicide, divorce, alcoholism, spouse and child abuse, etc. These bankers literally ruined lives with their irresponsible decisions to enrich themselves.
Bitcoin (probably) won't ever do that.
Is that good for society? Is it worth the increased electricity and computing costs? Maybe or maybe not. No one is entirely sure. But it is certainly a worthwhile experiment to investigate.
how banks solve people problems? – Alexan – 2017-12-20T19:47:45.740
I'm not minimizing the value of bitcoin. I just don't understand how it work and why it is valuable. i'm not trying to be disrespectful toward the bitcoin community. The comment "How banks solve people problems" is like comparing apples to oranges You still haven't answered my question. – Kimberly – 2017-12-20T19:52:32.047
Possible duplicate of https://bitcoin.stackexchange.com/q/331/5406
– Murch – 2017-12-23T19:14:52.377