Bitcoin Forum

I know about Bitcoin banks like Flexcoin, which does something similar to what I want.  I want a place where I can send my Bitcoins, and they will be stored in something like a bank account that would pay interest on my deposited Bitcoins. Is there anything like that?

Yes: www.flexcoin.com :P It's the only one that does that right now (they call it discount instead of interest). There are other online wallets, but none generates any interest.

That's what I thought, thanks. I suppose I could lend out my BTC at the lending forum.

"Real" banks are able to pay interest by using your deposited money to make loans to other people, paid back with interest.  I'm not sure if the Bitcoin market is deep enough to fully support such a loan system, though I'll be honest in saying that I have not checked out FlexCoin in the slightest.

Flexcoin gives 'interest' in the form of discounts on their transaction fees. Far from what I actually want.

Hum... Not exactly. Flexcoin charges a fee for withdrawals. 30% of that fee is used to keep the site running. 70% of the fee minus miner fees is distributed among the users of Flexcoin. It is interest, but it isn't a fixed amount. It depends on how many people withdrew money from Flexcoin during the past month.

So my account will (slowly) accrue BTC every month?

Yes. And you will earn more if you store more. There is a formula somewhere on their website.

Slowly or not, we are yet to see. They publicly opened on August 10th. I think there was a private testing period before that, but I don't know how much people earned.

Thanks for the help!

I'd be interested in hosting a site like this.
Wouldn't be able to pay much, maybe like 0.01% interest. ;D

I guess you could use the deposited money to buy mining equipment, just as a traditional bank uses money to make loans.

Isn't that what GLBSE is for?

I was thinking about getting a few FGPA boards to mine with.
Would need some money to start as they aren't the cheapest start.

I'd offer some capital, but I don't want to bankrupt myself. I've got 3 BTC now with another 4 coming soon.

I've got 50 in cold storage, but I'm in the same boat as you. I don't want to loose everything and gamble on one board.

I bet we could gather buy-in from other users. Not donations, mind you. Early adopters might get early access/special perks. Larger donators might get some kind of administrative privilege.

How would you tackle the fraud issue? I wouldnt let anyone touch my btc after the Mybitcoin wallet thing, and now we hear Bruce our biggest spokesperson is very likely a long time fraudster, seems like everywhere you turn someone wants to steal your coins.

Nothing new there...
Look at all the scams that have been attempted over time through all currencies.

Yeah I guess you're correct, but when we uncover fraudsters nothing is done about them, IRL there is usually a governing body you can go to for help.  Look at the Bruce issue thats forming, people are white-knighting him without looking at any of the information.  Its almost like bitcoin users have their head in the sand when it comes to anything negative about the currency.

Each person spends LOADS of time learning a specific skills.
Not everyone has the knowledge to keep their data secure, know how stocks work...etc.

With having a government, you can keep your life as simple as you want. Go to work, make money, go home.
Don't have to worry about how much money your currency is worth.

Hmm, so maybe what we need is a small tax on mined/traded bitcoins, then use those funds to hire people with investigative and/or security skills to secure bitcoin and make sure the big players arent fraudsters.

Unless you want to start a bank and charge a fee (in-case stuff gets stolen to pay people back until you figure out who did it).

I think it would be interesting to get a quote for deposit insurance form the Lloyd's of London

 http://www.lloyds.com/

If a bank provided real insurance they could charge a little higher fees to cover the cost of insurance. I bet no one would complain.
 

We tried that via lloyds,  the fees were SO high that it would effectively price out smaller deposits...

I think it is awesome that you looked into it!. Could you post the quote? I think it would be a interesting piece of information.

Even if you are contractually bound not to post exact pricing, any ballpark information that wouldn't violate any agreements would be a valuable insight.  I think in time bitcoin wallets, banks, and exchanges will offer some sort of insurance.  Even the first entity which offers partial insurance against lost, theft, embezzlement by operator (say covers 50% of lost deposits up to 1000 BTC on losses beyond 25 BTC) would be massive.

You mean like the rate my bank account offers?

Amazing, isn't it? "Loan us $1000 for a year, and we'll pay you a dollar"... As if banks don't have much confidence in the dollar holding it's value either (along with the fed offering super-cheap prime interest rates [loaning our tax dollars to the rich] as "economic stimulus").

Amazing, astonishing, and yet, disappointing.

But then again...do you have confidence in the dollar?

Dollar holding its value isn't the issue.  Inflation favors debtors (which is the bank in a deposit relationship).  The more you anticipate the dollar falling the higher interest you can accept.

Wait. Does flexcoin do loans?

You 'loan' money to flexcoin and it pays interest. Flexcoin does not loan you money, if that's what you asked.

I wanted to take out a loan :(
If they do not loan money, how are they profitable?

Because you pay a fee to send bitcoins. They re-distribute a part of those fees among the users.

Fun fact:  the economic crisis of 2008 wasn't entirely the fault of Freddie Mae and Fannie Mac.  The federal US government pretty much forced them to approve loans that could not possibly be paid back, under the idea that "higher home ownership == less crime == higher standard of living".  That same government then chastised those firms for doing exactly what they were told to do.

This isn't the place for fun facts.
HOwever, let me put it like this:
Don;t go blaming other people, if you aren't going to blame ALL the other people. the 2008 crisis was the fault of all subprime morgage lenders, the US Gov, Frannie and freddie, and people who bought homes they shouldn't have. I'm probably forgetting somebody here.

The whole U.S. mortgage lending fiasco is a wonderful study in the madness of crowds. The point where it all went off the rails was when the criteria for lending ceased to be the ability of a borrower to repay and became the ability of lenders to securitize loans off their books.

Thats a bit better than I'm getting on my personal USD savings. Hmmmm. Maybe you should set it up. :)