How To Be Your Own Banker

Be your own Banker

“When the going gets tough, only the financially literate survive”. I don’t really remember who said this, but to start this off, I feel it is as good a quote as any..

Let me ask you this–when was the last time you thought about handling your own money? Most of us just let bankers deal with it for what we might think is an insignificant fee. Investing — we leave that to other people too, customarily because they’re better at growing wealth than us, but also because we’re not really paying attention to the details. I could say the same about myself up until about a year ago. When the pandemic hit, expenses dipped (forcefully), and I suddenly had some extra money to spare each month.

I hadnt started investing at all. I read a ton of books to try and catch up with the what, why, and how much of investing — be it in equities, mutual funds, or something I found a little more interesting — cryptocurrencies. Ben Graham’s tedious book “The Intelligent Investor” seemed the best place to start , and was the very book where I picked up, what to me is the most important rule of investing — think long term. Nothing guarantees success, but I was convinced that a long term outlook would get me as close to success as possible. Anyway, this is getting a little boring so I’m going to pick up the pace.

Over the next few months, I looked around and about at places for me to store and grow my money — banks, equities, mutual funds , an exhaustive list. . Inflation was at 5.5% and no risk free bank rate was able to match that rate (unless I were to to lock my money in for 5 years). Essentially, If I wasn’t taking a risk, and putting my money into equities or mutual funds , I was losing value on my money, which I was lending to the bank. The House always wins. I felt pretty helpless, with not much of a choice but to go with a savings account at 6% (I was fortunate I found it). Luckily for me, this isn’t 2008, and there are other means of banking where, well, contrary to popular belief, you are not “scammed”. This new means of banking revolved around one interesting fact — decentralisation. You control your own money, your transactions are “confirmed” not “verified”, you make yourself a rate of return, and your asset is an appreciating one. This is made possible because of blockchain technology, and smart contracts — immutable bits of code, that execute a result to a specific set of logical functions. It is brilliant.

To summarise, I dove right in and started exploring how I could be my own banker, and I will tell you how you can do it yourself. None of this is financial advice, so please, DYOR.

Step 1 — Learn about blockchain. This is the hardest part of the entire process, but it will allow you to be your own banker. The TLDR is that, just by holding a cryptocurrency (read: crypto-asset), and using it across various apps (or Dapps rather) — you can become a bank — no sign ups, no forms, just your private keys. (the assumption here is that by now, you are convinced fiat is worthless and risky, and you convert it into an appreciating digital asset like Bitcoin, or Ethereum, or Matic).

Step 2 — Buy some cryptocurrency, preferably some ETH to start. You could get this off a centralised exchange like WazirX or Binance. While you may think of this as the investment part of the process, it’s an incorrect way to go about things. Think of this as another form of your money, a form that grows over time, rather than shrinking in value.

Step 3- Get a Metamask Wallet — while it is a non custodial wallet that stores your crypto — Metamask will also be your car that drives you around various blockchains and allows you to interact with various applications on these blockchains. It allows you to sign transactions, deposit money, borrow money, swap held assets for others, and all of this without a middle man, and for barely any fees, in an instant.

Step 4 — Move your ETH into your metamask wallet.

Step 5 — Move your assets (ETH) onto the Polygon Network — it provides the security of Ethereum, while also providing gas fees that are a fraction of what they are on Ethereum’s blockchain. It’s paradise. Here’s how you can do so.

Step 6-Once your assets are on the Polygon Network — not only do you already own appreciating assets, but you also now have a platform where these very assets could be put to work, to make you some extra money. You can deposit on AAVE to earn an interest, you can swap and trade on Quickswap and other DEX’s, you could use CURVE for a more stable (less volatile) asset deposit. There’s loads you can do, and the best part is, there is no middle man to tell you when you can and cannot do it, there is no middle man taking away “insignificant” fees for basic banking functionality, and most importantly, you now control your own money. You are now your own banker.

It’s evident that this blog post is more centred towards those that are bullish towards cryptocurrency, and the growing blockchain space as a whole, but my aim is to highlight a blockchain’s basic use cases that hands down trump what is happening in the real world — through my own experiences and experiments, analysis and reports on how these very experiments have turned out. Stay tuned!