Bitcoin Forum

The problems the bitcoin community has been having trying to exchange bitcoin for other currencies makes me think of this question -

What if the internet had its own bank ? Why are all these central bankers controlling everything when banking could be as decentralized and open source as bitcoin?

Imagine taking this idea to kickstarter for example and crowdfunding the worlds first open source bank which anyone could buy a share of. Those shares could be bought with bitcoin  :D

The entire internet would be monitoring the banks processes and procedures so greed and excessive fees charged by normal banks would be discouraged by massive attention. Loans could be decided the same way Kiva does them with person to person loans - why should the bank decide who to lend your deposited funds too without any choice?  The internet has the most eyeballs :) .

One of the banks here made $4 billion profit last year on the back of huge fees and charges while providing less and less service.


Does anyone think this idea has legs?

An open bank is a fabulous idea, but banking is so heavily regulated that I can't see how it could be done. I'd love to be proven wrong though.

With bitcoin, everyone is his own bank.  Therefore I doubt the idea of an iternet open bank would be much different than the bitcoin system.

Even with bitcoin, banks will be a necessary evil in the longer run. Storing all of your money in your own PC or somewhere else in your house is not a good idea.

Then again, storing an encrypted wallet is much easier and cheaper than storing tons of gold and valuables, so the competition for banks would certainly change.

By definition a "bank" accepts deposits and makes loans at interest.

If an institute does not write loans, it's not a bank, it's a financial services business (FSB).

On the internet we call those services "exchangers" and there are already dozens of them.

If you only want to save your money somewhere safe, we have several trusted bullion banks that are designed to work on-line.

I think this thread is another example of how the language has been warped by the propagandists to hide the truth.

From what I remember from history, banks started as simple storage places where people could put their valuables. Pooling the resources and investing/giving out loans started later, and sure, that has now become the defacto meaning of bank..

People will provide information about keeping your savings wallet encrypted and with you, and stored in a cloud. Banks are dying. Bankers will go down with buggy whip makers in the annals of history.

Banks, as we know it.

See my recent post on Ripple open decentralized finance here:

http://bitcointalk.org/index.php?topic=1923.0

+1 for p2p lending with Ripple.

http://www.lendingclub.com/ (http://www.lendingclub.com/) is another means of doing p2p loans, but it uses a third party to help verify creditworthiness.  They also have a secondary bond market where you can resell your bonds.

But member banks in central banking cartels get deposit insurance and implicit bailout guarantee subsidies, not to mention all the regulatory barriers to entry against their competition, so the deck is pretty stacked against honest challengers at this point.  The obvious way to combat this is to establish a money that is impossible for governments to control, and which doesn't need to be stored in banks (lending institutions) for security and convenience, but I'm sure you all know this already  ;) 

Dumb question: Why I should lend bitcoins to somebody who I don't know, when price of bitcoins itself rises due to its deflationary principle? I'm pressed to lend (and invest) when money lose its value by lying on my account, which is not an issue in bitcoin.

It can be profitable only when I lend on high percent (% deflation + % interest). In case of inflation, lending is everytime better than leave money on my account (even if interest < inflation). Am I right?

Your 1% interest rate become more valuable in a deflationary environment. Your bitcoins will purchase more. So 200 + 1% is more like 215 BTC rather than 202 BTC for example.

Lending any currency (deflationary or inflationary) at any positive rate of interest is better than simply holding onto it, given zero risk of default.

But you are indeed less pressed to lend a deflationary currency over an inflationary one.  For a bunch of reasons, I don't think this is a problem for overall economic growth and stability, though.

Yes, and it did when it was a crowdsourced short term Internet savings & loan operation called Prosper.com.  It was a great thing up until it got the attention of the regulators, who then promptly forced the company to become a "real" bank.

+1 for this. eliminate the bank altogether - route credit through web of trust.

Centralisation is deadly.  :)

When I say bank I mean those institutions that offer financial services. Those could just as easily be dealt with by a decentralized marketplace with a built in web of trust and the ability to match financial experts with those seeking advice or services.

Together with decentralised credit such a ripple and decentralised currency such as bitcoin and decentralized third party ratings and certification it would be pretty resilient to interference.

Why just a bank..we need our very own country..  ;D

Countries are so 19th century. Also see Wirtland - http://www.wirtland.com/ (http://www.wirtland.com/)

Now what we need to do is carve up some physical space as enclaves like Lee's Greater Hong Kong.

We could buy a piece of the sahara desert Im sure the land is going cheaply.  :)

Perhaps Hutt River Province (http://www.principality-hutt-river.com/) in West Australia would be interested.

Come to think of it, they're inviting nominations for their New Years Honours List (http://www.principality-hutt-river.com/rch/PHR_EM%27s_Invitation_for_Honours_Nominations.htm):


Nominations close December 17. Are we going to put Satoshi's name forward?

Of course, the Australian Govt considers Hutt River Province to be part of Australia, so you can't get out of paying tax by living there.

How many people does it need to nominate someone? I say go ahead and do it.