Bitcoin Forum

Bitcoin Credit Union
http://bccu.no-ip.org (http://bccu.no-ip.org)

Status: Registrations are open, approval required. Currently alpha state.
Follow on Twitter: http://twitter.com/#!/BitcoinCU (http://twitter.com/#!/BitcoinCU)


Donations are welcome and appreciated!

Hi Sentry,

You indicate that members are paid for maintaining a balance.  Can you explain how this works?

Hey matt,

keeping a balance in your savings allows dividends to be paid to your account. dividends come from bank profits on things such as transaction fees, and overdraft fees (overdrafting undecided). also you will be given the option to invest in member loans where the interest is paid to the investors.

thankyou for the question, it makes me rethink how things should work and whether or not they will at all. also, if you have any ideas or suggestions, anything at all that you thing would be a better way of doing things PLEASE feel free to voice your opinions here.

This is a pioneering idea! I love seeing things like this. The problem is you haven't established what exactly your aim is and you haven't mentioned any benefits to users.

Earning an interest rate would be great, but you haven't worked out how you'll earn income. If it's by charging users to withdrawal/send money, then you need to tell us exactly how much.

Also, not using https on your site is a huge red flag and indicates you haven't given due diligence to security. Someone mentioned you could get a free ssl certificate here at a site called http://www.startcom.org (http://www.startcom.org). I don't know if there are eligibility requirements or not. You could also self-sign.

http://bitcointalk.org/index.php?topic=2626.0 (http://bitcointalk.org/index.php?topic=2626.0)

Thanks ryan!

I appreciate your interest, my aim is simply to create a bank system that is not just a simple ewallet, those are great and I use them myself but I really wanted something that would benefit the people who use it, so with that regard I'm trying to make something I would want to use myself.
 
Right now depositing and withdrawing are free but to transfer funds between accounts will have a fee. The actual fee itself is determined by the users. I will initially set it at a .1% rate and from there the members can cast votes to increase or decrease this fee. I should mention that votes themselves will have their own fee, also determined by the members. This is meant to limit the number of votes cast by any one person. My goal is not to be any kind of president of the credit union, the very nature of credit unions are that they are ran by its members (volunteers). Your votes will be handled by the amount of weight you hold to the credit union which is based on your shares compared to the total number of shares the CU holds.

Just so you know I do not intend to keep this on my local machine, right now I just wanted to let you guys look at it and if you wanted to play around with it a bit you could. Since its not on the testnet I don't want to open registrations. Once I feel good about the functionality of the website and it gets moved to a new server I will look into ssl and getting that setup.

Again thanks for your interest and suggestion, I very much appreciate it!

Hi, you can allow members to chose who they trust by using ripplepay. Only someone you trust could default on your loan, you would only owe to people who trust you.
It's free software, so you can modify it at your will. RainDroplet (a fork) uses it for credits.

http://ripple-project.org/

http://sourceforge.net/projects/ripple/

https://raindroplet.info/

http://gitorious.org/raindroplet

I hope this is useful for you.

Good luck.

Interesting

I wish to participate in that, if you iron out the already pointed issues.

this is a great idea, in that it sets up a banking alternative to ewallet that users can trust, by participating in it's running.

Sentry, will you open source the code?

This is a great idea! It was only a little bit of time before someone made a credit union for Bitcoin...

Good luck to you!

Oh, and I second the SSL requrement - Startcom's interface is a headache sometimes, but it's well worth it - a free SSL cert that works in all modern browsers (except maybe Opera)? Yes please.

Good idea

Had this thought, could work out nice for the credit union and the bitcoin community

Make a bitcoin gift card to be sold in Brick n Mortar stores.  Similar to the Visa prepaid cards or green dot, that are sold for $5 plus the value of the card.

This could help it get some exposure, People would see it and at least wonder what is is, then BTC will start to get some recognition.

Getting very computer literate people to use BTC is hard enough, especially now that PayPal has shut down CoinPal.  Getting the common folk to use it is an even greater challenge, many of them still don't know what PP is.

Not sure how much the stores get out of the $5, but the rest would goto the Credit Union for Servers, Coders (high volume trading?), and into the interest rates.

Hope to see a pool set up with a large prize to be won for getting this setup.

I think its only the Credit card type gift cards that require an ID (when you open the thing up you get a fed law requires... of course theres ways around it, but usually the card is less useable), going against some of the intents of bitcoin.  I think the iTunes and Facebook "credits", gift cards don't require ID and have a set price.  Might need to use carrots.

Probably need to get some mom n pop type stores, and hopefully someday into larger chains/franchises. Anyone know a mom n pop shop in a geographic area with a high concentrations of BTC users?  I would think some of the already established users would go buy some just to support the store for starting to take them.

Would be nice to have the store be able to load any amount the customer wants and have the cost based on MTGox.  Probably need to just sell a set value like $20 USD worth of BTC (+$5 fee for total of $25) and then when you sign in you get the current exchange rate, around 5 BTC at todays rate.

Would be nice to get the gift card fee down to $2 (maybe, yes thats high for $20, but good if your putting $500 in, not sure where all the fees go on those cards) to keep with the low transaction fee standards of BTC.

I could see this causing a rapid increase in value of BTC if someplace like 7/11 started carrying the gift card, especially if they would start accepting, to the point where the decimal would need to be moved.

Anyone know someone in a position to make this happen.

add an OperationFabulous banner to help the intrest rates

just found bitbills  this could work.

Thanks for the suggestions, I will see what I can do. In the meantime I have opened registrations, please register so we can look for any bugs that have been hiding from me. Once you register you will have to wait for your account to be activated, even though it says verification email sent, it wont send anything. I will manually activate accounts on a first come first serve basis until I have enough for testing.

Please don't deposit too much.

The next thing I will be working on is dividends. Stand by...

I registered... waiting for approval.  Might I suggest sending an email when the user is approved?

you should open this on testnet, thats what it's there for ..... testing ;)

i like this idea.. ive always had a place in my heart for credit unions... they helped me through school   ;)
i do hope you can find a way to make this a viable CU.

I have signed up but have not yet received the confirmation email (not in junk).

Also, I don't know if you have seen this but there is a guy out there who knows CU intimately and has written about bitcoin:

http://cuhistory.blogspot.com/2011/04/bitcoin-natural-experiment-for-credit.html (http://cuhistory.blogspot.com/2011/04/bitcoin-natural-experiment-for-credit.html)

I think a number of these credit unions will be created over the next year, primarily enabling venture capital to go to new bitcoin startups. If trust can be earned by members then these resource pools will be wildly successful.

And that's why I bought BitcoinCreditUnion.com... happy to sell it for the right amount of Btc =)

psh :p right, buy up a domain to sell it... very helpful.

Just speculating as any capitalist ought   ::)   Wasn't trying to be "helpful" per se, but if someone does start a credit union I'll be happy to invest in the project.

hehe. Anyway, I'm sure there are better names for a credit union :P than bitcoin credit union...
First Coin of the Bittans!
or something....

Luckily, I have already acquired the name I wanted. BEHOLD, bitcoincu.org

Nice try though...

Your site took about 8 hours to send the registration e-mail...

I am still to figure if it work or not.

Btw: Domain name speculators are annoying. Specially when they act as squatters and end forcing more domain speculation (ie: some years ago, I usually bought only a single domain for a site I wanted... After I noticed that after buying that domain, all possibly related domains got bought too and used against me, I now get forced to buy domains in huge batches only to protect myself... And sometimes that still do not work, someone bought the .com domain with the name of my father company before he could buy, and now wants 2 times the value of the whole company to hand the domain back O.o And the site is not even for profit, it is purely informative, a collection of technical sheets...)

I'm the author of the CU History piece, and am excited to see folks are making a go of this! One suggest I'd have is that, rather than setting an interest rate up front, it might make more sense to simply distribute the surplus earnings after expenses at the end of each month/quarter/year pro-rated by how much is deposited. Thus, the organization will operate on a not-for-profit basis for its members.

Something else that's important to consider is the balance between net-borrowers and net-creditors - in a credit union, you have to be a member to borrow, and its good practice to evenly distribute the surplus between reducing or rebating the interest paid on loans and the dividend paid to savers.

In any case, I'm curious to see how this project shakes out :). Good going so far!

I'm very interested as well, and I think that any businesses that get into bitcoins will want to use a service similar to this.

And what exactly is "the right amount of btc" to you :)?

I've requested a 3 month loan of 0.1 BTC for testing purposes.  If you want to make a tiny profit for a tiny investment, please fund me.  I will maintain a balance of 1 BTC with the credit union for the duration of the loan.

You should know I found problem with my current formula for determining an investors return. This is high priority for me, I will post back once this is fixed.

I really think you should have shorter term loans than the minimum 3 months. I would like to make a test loan like above of .1 btc but wouldn't like to wait three months to see how it worked out. these are fast times man! :)

You can always pay it off early, though you do not gain much "trust" (credit) for doing so.


I believe this issue is resolved, feel free to make investments.

Probably like 50 Bitcoins. I'd like to hold it a while but I'm cash-poor and needing-groceries-rich!

Shouldn't the lenders get credit for the lent shares?  Or do you intend for me to be able to borrow all the funds and get all the dividends?

50 x $7.20 = $360

dude, you are an ass. there is a guy on this forum raising capital for his company, the whole of which (including the domain name) he has valued at $490.

you really think that domain is worth 360 dollars? I certainly don't.

build something with it or give it to the dude for a nominal fee. I hate cybersquatters.

That.

As I said elsewhere:

Evoorhees isn't a squatter of any sort. He's a troll. This discussion belongs in the thread from which I quoted myself, but I thought I should bring it up here.

Don't get your panties in a bunch. I purchased the domain, along with a dozen others, because I thought their current market price of $11 on GoDaddy was lower than their true market price. This is called speculation, or arbitrage, or investment. I had no "unfair" or corrupt advantage in acquiring the domain - anyone could purchase it as easily as I. Nor do I have intentions of "gauging" anyone who needed the domain to operate their business. It's a generic name that I thought may be valuable, so I purchased it.

If that makes me a "cyber-squatter" then I'm also a stock-equity squatter, a car-squatter, a currency squatter, a business-squatter (since I've bought a small business on the same arbitraging principle) and a squatter in precious metals. I guess I'm a Bitcoin squatter as well. Of course the crucial definition of a "squatter" is someone who uses property not belonging to them.

Before you called me an "ass" for engaging in a voluntary market-based transaction which you didn't approve of, I was going to post here that I'll offer to do the brand identity design for the domain/credit union if someone was interested. I build brands professionally and usually charge much more than what amounts to 50 btc. However, I love the Bitcoin concept and am happy to work with others to help build it. I'm still happy to build the brand if approached for such.

But please don't call me an "ass" or a "troll," if for no other reason than that it degrades these forums. And do trolls typically use their real names or hide behind pseudonyms? My name is Erik Voorhees, I'm not an ass nor a troll, and if you'd like to discuss with my why purchasing domain names is illegitimate, please do so without devolving into personal insults.

I can understand why you might feel that way about the term ass, but "troll" accurately describes your occupation, to the extent that it involves you extorting people for things you have no other use for.

Why would property-trolls hide their names? They have the authority to do what they do.

Well it seems like our social entrepreneurial friend already picked up a good domain, so this whole conversation seems OT and moot... Additionally, if anyone else is thinking of starting a coop website, the .coop domain is available for that purpose :)

+1

Found this from a while back - "Estimated Start-up and Operating Costs in Chartering a Credit Union"

Obviously, this is for a "real" credit union, but the report has lots of useful information about structure and process which could help guide a bitcoin credit union.

http://www.ncua.gov/resources/credituniondevelopment/Files/AcrobatDocument6-26-09.pdf (http://www.ncua.gov/resources/credituniondevelopment/Files/AcrobatDocument6-26-09.pdf)

The organization, NCUA.gov has many other goodies as well.

if you are going to put out loans.. (which are very risky buisness to begin with) I would suggest getting yourself setup as a financial institution in your country of choice, and abiding by those laws, and only taking loans from people who can be held to those laws.

otherwise you may find yourself in a bit of a hellish area.

as for the credit union itself.. id say give a variety of options for what people want to do with their money while its in savings.  whether they want to keep it there, put some of it in to your hands for low risk capital gains.... whatever.
as for transaction fees... what kind of transactions are you thinking about? like handling monitary transactions to other people in other currencies? or.. what?

also, what other ways do you intend to make money with the money that is being held?

The way loans work here is that the members fund the loans by investing whatever amount seems fit to them. This way it is less of a risk to everyone involved. When someone requests a loan that persons "trust" rating is displayed, giving the investor a choice of what loan they feel comfortable investing in. Based on the amount they invest and the current interest rate set by the members determines the return to the investor.

Let's be honest here, bitcoins are a great idea and I support the cause and want to provide a service to give back to the community, but since bitcoins are not recognized as legal tender I am reluctant to call this a financial institution. This credit union plays the role of one, yes, but it is within the bitcoin community that I offer my services to. We may call it money, but we do so because it is simply a virtual good that has value given to it by the community and can be sold for legal currency. This credit union will never handle any legal currency and I prefer to stay away from that grey area.

The credit union makes money from votes cast by it's members to increase or decrease other bank fees like transfer fees and loan interest, votes can also determine the dividends that are paid out to members. It is in the interest of the credit union members not to make these fees go away because then the credit union has no income, thus there would be nothing to pay out to its members.

Currently the function of the savings account is a foundation for holding of funds with the intent to invest, but for now it simply serves a purpose by paying dividends to members based on the amount in their savings account. Remember though to put funds into the account you must transfer it there with the fee.

Hey thanks for this, it's very informative.

So Sentry.... did you run off with all our funds?  I can't get to bitcoincu.org or the original url.  Hopefully you're just working on something.  Please give us a status update.

I was going to ask the same.

This is why I wasn't going to put coins into there: Sentry didn't have a good enough reputation to trust him. Additionally, I haven't seen any contact information.

-Garrett

Bitcoin is coming closer and closer to Eve Online every day.

No, everything is fine. Real world events has cause me to move to a different state. Getting the site back up has been my priority and I'm also sorry you guys had no warning but I didn't really have any warning myself. My move is still going on so the site may be up and down. I'm sorry if I've lost trust because of all this but the best I can do is tell you I would never just take your money and run, financially it makes more sense to see this through as I also have an idea for my next project which ties into the savings accounts.

Anyway, sorry for the panic.

How much was invested into this project so far, anyone know?

By me, or the users? Its not too much, the wallet is at 11.50.

I really like your project, but seemly it is not working.

What we need to do to make it work properly?

Make a successful futures market so that people can pay insure their loans against currency fluctuations...

Time. I'm doing this in my free time between work and family life, don't worry though I have no intentions of giving up on this. :)

Heres an update, earlier I fixed a bug with the account transfers and I discovered an issue loan payments. Working on that currently. Also, I've created a twitter account to let you guys know whats happening.
http://twitter.com/#!/BitcoinCU (http://twitter.com/#!/BitcoinCU)

I am just about to launch an options market which will help with some of this. I'm updating my thread daily right now, it may launch today even (! Fingers crossed!)

Finally!

It's a wonderful idea. However, Here are 2 suggestions:

1)get a domain name. This will establish more trust in the union and
2)get HTTPS certified.

judging by the site, it looks promising. It still has some ways to go.  I hope it will work out very well.

Something I have been thinking about, should the credit union have its own forums for members to communicate?

I think most people would prefer to keep communication here until the union is well established, and any reputation questions are worked out.

I think most people are thinking of the site in terms of as it is now, instead of how it will be when it goes live. Most suggestions I hear is get a domain and SSL, well I have both but I am working on the site continuouslly and have it locally for development reasons. It's much easier just to save a file and reload the page rather than having to upload to a server constantly. So yes, a domain is coming and actually already works (http://bitcoincu.org), SSL is on hold untill I move to a permanent server.

My question about the forums is meant to be for the site in general, do the members want to have any kind of community between themselves or should it be a blind system. Ignore the fact that I have no reputation, and people dont know if the union is going anywhere, to me it seems like a moot point.

How you will make people pay back the loan?

The key (which has been an underlying principle of the CU movement for over a century) is that the members are connected by a common bond. Thus, if you default on a loan from an institution that you and the peers whose respect you value cooperatively own, you will be forced to deal with the stigma of essentially stiffing your friends/co-workers/project collaborators, etc. Thus, a member of a credit union with a tight common bond can often be expected to go above and beyond in attempting to pay off their debts in order to avoid the judgment of others...

Also, loans are distributed among members who choose to invest in the loan so that it is less of a risk to everyone. This, with a trust system built into the site let others know your trust rating, giving the investors an idea of the risk they are taking when they invest in a loan.

Tried a few loans to test it, and improve my rating, just a few bitcents.

did a loan, and once I had paid enough, the ability to take out a loan opened up again.

took out a larger loan, and I think i've over paid it, but I still cant take out a new loan.

would be nice to see the loan/investment balance on that page.

so that was the last of it?  a few promises followed but the current status sounds like there were deposits made but then not returned?

"BCCU is a community driven bank that runs itself, secures your finances, pays you for keeping a balance and gives everyone the oppertunity opportunity to be the Board Director of their very own bank."

I know it's a small thing but if you want people to invest trust you cannot have spelling mistakes.