wobber



Offline



Activity: 1064

Merit: 1001







LegendaryActivity: 1064Merit: 1001 Bitcoin Bank December 28, 2010, 02:10:58 PM #1 Did anyone think at this? How would a bank work? How could you loan bitcoins and get interest for them in an economy with just 21 milion BTC limit? If you hate me, you can spam me here: 19wdQNKjnATkgXvpzmSrkSYhJtuJWb8mKs

There are several different types of Bitcoin clients. Hybrid server-assisted clients like Electrum get a lot of their network information from centralized servers, but they also check the server's results using blockchain header data. This is perhaps somewhat more secure than either server-assisted clients or header-only clients. Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.

Cryptoman



Offline



Activity: 726

Merit: 500









Hero MemberActivity: 726Merit: 500 Re: Bitcoin Bank December 28, 2010, 03:45:13 PM #4 Quote from: wobber on December 28, 2010, 02:10:58 PM Did anyone think at this? How would a bank work? How could you loan bitcoins and get interest for them in an economy with just 21 milion BTC limit?

Many people seem to be worried about losing their wallets, so I could see a bank as a trusted party to store bitcoins. They could also offer escrow services for people who wanted to enter into a transaction but did not trust each other. The beauty of starting a bank is that you don't need anyone's permission. Many people seem to be worried about losing their wallets, so I could see a bank as a trusted party to store bitcoins. They could also offer escrow services for people who wanted to enter into a transaction but did not trust each other. The beauty of starting a bank is that you don't need anyone's permission. "A small body of determined spirits fired by an unquenchable faith in their mission can alter the course of history." --Gandhi

ribuck

Hero Member



Offline



Activity: 826

Merit: 1007







DonatorHero MemberActivity: 826Merit: 1007 Re: Bitcoin Bank December 28, 2010, 06:12:00 PM #7 I see people paying a small amount to a bitcoin bank in return for it guaranteeing to look after their coins safely. Something of 1% per year perhaps.



Earning interest by depositing your bitcoins in a bank is going to be unlikely while their value is rising and while there is not a big enough bitcoin economy for lending to be particularly profitable.

jgarzik



Offline



Activity: 1596

Merit: 1007







LegendaryActivity: 1596Merit: 1007 Re: Bitcoin Bank December 28, 2010, 07:40:42 PM #8 MyBitcoin.com is a de facto bitcoin bank. And it is clearly useful to many people.

Jeff Garzik, Bloq CEO, former bitcoin core dev team; opinions are my own.

Visit bloq.com / metronome.io

Donations / tip jar: 1BrufViLKnSWtuWGkryPsKsxonV2NQ7Tcj

Sjalq



Offline



Activity: 280

Merit: 250







Sr. MemberActivity: 280Merit: 250 Re: Bitcoin Bank December 30, 2010, 12:47:45 AM #9 Quote from: wobber on December 28, 2010, 02:10:58 PM Did anyone think at this? How would a bank work? How could you loan bitcoins and get interest for them in an economy with just 21 milion BTC limit?



Banks do not lend out money, they create it from nothing and back it with loan contracts. The rest is simply semantics.



Private holders of BTC would lend out their own BTC at an interest they believe the borrower could pay. They would do this totally at their own risk, if the borrower could not pay, the lender would lose his money, a simple feature missing from the current system.



Someone might attempt to hold a set of BTCs and promise interest on those and loan them out or extend credit based on a separate accounting system that they control. (This is how gold became paper money btw) Since Bitcoin is basically an accounting and payment system that is already very convenient, I don't see why anyone would want to use an external service. This would also be very unstable and risky for the operator to do in the long run if they were extending significantly more BTC credit than they had reserves for. Banks do not lend out money, they create it from nothing and back it with loan contracts. The rest is simply semantics.Private holders of BTC would lend out their own BTC at an interest they believe the borrower could pay. They would do this totally at their own risk, if the borrower could not pay, the lender would lose his money, a simple feature missing from the current system.Someone might attempt to hold a set of BTCs and promise interest on those and loan them out or extend credit based on a separate accounting system that they control. (This is how gold became paper money btw) Since Bitcoin is basically an accounting and payment system that is already very convenient, I don't see why anyone would want to use an external service. This would also be very unstable and risky for the operator to do in the long run if they were extending significantly more BTC credit than they had reserves for. mine mine mine mine mine mine mine

*Image Removed*

18WMxaHsxx6FuvbQbeA33UZud1bnmD7xY3 mine mine mine mine mine mine mine18WMxaHsxx6FuvbQbeA33UZud1bnmD7xY3

Hal

Sr. Member



Offline



Activity: 314

Merit: 1014









VIPSr. MemberActivity: 314Merit: 1014 Re: Bitcoin Bank December 30, 2010, 01:38:40 AM Merited by mindrust (10), TheNewAnon135246 (5), LoyceV (3), BitcoinFX (1), ETFbitcoin (1), wh1rlw1nd (1), DireWolfM14 (1), M-BTC (1), stortz (1), BitcoinCoreBTCC (1) #10 Actually there is a very good reason for Bitcoin-backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases.



Bitcoin backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoin backed. Interest rates may vary. Cash from some banks may trade at a discount to that from others.



George Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self-regulating.



I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash. Most Bitcoin transactions will occur between banks, to settle net transfers. Bitcoin transactions by private individuals will be as rare as... well, as Bitcoin based purchases are today. Hal Finney

MoonShadow



Offline



Activity: 1708

Merit: 1000









LegendaryActivity: 1708Merit: 1000 Re: Bitcoin Bank December 30, 2010, 02:44:52 AM #12 Quote from: Hal on December 30, 2010, 01:38:40 AM Actually there is a very good reason for Bitcoin-backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain.





It doesn't need to, as most daily transactions will be handled by sites similar to Mybitcoin.com. Everyone seems to follow this same learning curve.



Quote

There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases.







Are you serious? Have you ever bought a car from a dealer? How long did it take for your credit report to be checked and your car loan approved? Mine have always taken well over ten minutes, most about a half hour. Delays are not unusual for large ticket purchases. This is a non-issue.



It doesn't need to, as most daily transactions will be handled by sites similar to Mybitcoin.com. Everyone seems to follow this same learning curve.Are you serious? Have you ever bought a car from a dealer? How long did it take for your credit report to be checked and your car loan approved? Mine have always taken well over ten minutes, most about a half hour. Delays are not unusual for large ticket purchases. This is a non-issue. "The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."



- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'

bitcool



Offline



Activity: 1441

Merit: 1000



Live and enjoy experiments







LegendaryActivity: 1441Merit: 1000Live and enjoy experiments Re: Bitcoin Bank December 30, 2010, 05:10:56 AM #13 Quote from: Hal on December 30, 2010, 01:38:40 AM Actually there is a very good reason for Bitcoin-backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases.



Bitcoin backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoin backed. Interest rates may vary. Cash from some banks may trade at a discount to that from others.



George Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self-regulating.



I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash. Most Bitcoin transactions will occur between banks, to settle net transfers. Bitcoin transactions by private individuals will be as rare as... well, as Bitcoin based purchases are today.



sounds like a fractional reserve system, one of the fiat money pitfall bitcoin claims it can avoid. sounds like a fractional reserve system, one of the fiat money pitfall bitcoin claims it can avoid.

bitcool



Offline



Activity: 1441

Merit: 1000



Live and enjoy experiments







LegendaryActivity: 1441Merit: 1000Live and enjoy experiments Re: Bitcoin Bank December 30, 2010, 05:11:59 AM #14 Quote from: Cryptoman on December 28, 2010, 03:45:13 PM Quote from: wobber on December 28, 2010, 02:10:58 PM Did anyone think at this? How would a bank work? How could you loan bitcoins and get interest for them in an economy with just 21 milion BTC limit?

Many people seem to be worried about losing their wallets, so I could see a bank as a trusted party to store bitcoins. They could also offer escrow services for people who wanted to enter into a transaction but did not trust each other. The beauty of starting a bank is that you don't need anyone's permission.

Many people seem to be worried about losing their wallets, so I could see a bank as a trusted party to store bitcoins. They could also offer escrow services for people who wanted to enter into a transaction but did not trust each other. The beauty of starting a bank is that you don't need anyone's permission. no permission is needed, but you still need trust from your depositors, and trust is hard to come by.

MoonShadow



Offline



Activity: 1708

Merit: 1000









LegendaryActivity: 1708Merit: 1000 Re: Bitcoin Bank December 30, 2010, 05:14:06 AM #15 Quote from: marketp2p on December 30, 2010, 05:10:56 AM Quote from: Hal on December 30, 2010, 01:38:40 AM Actually there is a very good reason for Bitcoin-backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases.



Bitcoin backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoin backed. Interest rates may vary. Cash from some banks may trade at a discount to that from others.



George Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self-regulating.



I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash. Most Bitcoin transactions will occur between banks, to settle net transfers. Bitcoin transactions by private individuals will be as rare as... well, as Bitcoin based purchases are today.



sounds like a fractional reserve system, one of the fiat money pitfall bitcoin claims it can avoid.

sounds like a fractional reserve system, one of the fiat money pitfall bitcoin claims it can avoid.

Bitcoin provides for a choice, but some will still choose to keep their funds in familiar institutions. Bitcoin provides for a choice, but some will still choose to keep their funds in familiar institutions. "The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."



- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'

Anonymous Guest



Re: Bitcoin Bank December 30, 2010, 05:21:20 AM #16 There is nothing inherently wrong with banks. Its when they are centralised and become the government that the problem arises.

wobber



Offline



Activity: 1064

Merit: 1001







LegendaryActivity: 1064Merit: 1001 Re: Bitcoin Bank December 30, 2010, 09:27:18 PM #17 Can I and how can I reserve the name BitcoinBank in this community?



And how do I buy the .org or .com domain? If you hate me, you can spam me here: 19wdQNKjnATkgXvpzmSrkSYhJtuJWb8mKs

wobber



Offline



Activity: 1064

Merit: 1001







LegendaryActivity: 1064Merit: 1001 Re: Bitcoin Bank December 30, 2010, 10:33:43 PM #19 I checked my posts and it seems I didn't ask that If you hate me, you can spam me here: 19wdQNKjnATkgXvpzmSrkSYhJtuJWb8mKs